A new set of recommendations on the implementation scheme for the ambitious BharatNet project may provide a fillip to the much delayed nationwide broadband connectivity programme.
While the Telecom Regulatory Authority of India’s recommendation aim at a public private partnership (PPP) push for the project, the glitch, however, continues to be the lack of clarity on the need to iron out the hurdles in acquiring the right-of-way (RoW) and building in adequate incentives for the private sector.
“One of the most critical requirements for private sector to invest in the project will be right-of-way. They have recommended safeguards, but details on how and when will be crucial. It is a critical enabler for the rollout of the optical fibre network. Details will be awaited by project participants about how timely clearances will be obtained for right-of-way,” Arpita Pal Agrawal, leader, telecom, PwC India said.
In its recommendations released on Monday, the Trai said, “RoW is perceived as a major risk factor by the private sector, safeguards recognising such a possibility and outlining the steps to be taken must be put in place under the agreement to attenuate such risk and encourage participation. Guaranteed provision of RoW is a necessary and non-negotiable precondition to successful deployment of BharatNet, subject to the reinstatement of public property to its original condition.”
“Beyond RoW, another important aspect of the project is the need to have an administrative and governance framework that will assure access to the fibre to operators in non-discriminatory, time bound, cost efficient through a single window. This would be a critical enabler towards journey of being a Digital India,” Agrawal added.
The BharatNet project, earlier known as National Optical Fibre Network (NOFN), was initiated in 2011 and has already missed several deadlines. The project was to be funded by Universal Service Obligation Fund with the aim of providing broadband connectivity to over 2 lakh gram panchayats (GPs).
It aimed to leverage the existing fibre optical network of Central utilities — BSNL, RailTel and Power Grid — and laying incremental fibre wherever necessary to bridge the connectivity gap between panchayats and blocks. Bharat Broadband Network
Ltd (BBNL), a special purpose vehicle was created under the Companies Act of 1956 for execution of the NOFN project.
Once implemented, the project is intended to enable the Centre to provide e-services and e-applications nationally and a minimum of 100 Mbps bandwidth is to be made available at each GP with non-discriminatory access to the network for all categories of service providers.
The project, having missed several deadlines, is unlikely to be completed by its deadline of December 2016.
While in 2014-15, plans were afoot to execute work for 1 lakh GPs, which was later scaled down to 50,000 GPs, data up to March 2015 showed that only about 20,000 GPs had been covered under the NOFN — just about 40 per cent of the planned target. As on December 6, 2015, optical fibre cable (OFC) laying in 32,272 GPs had been completed and 76,624 kilometer fibre laid, according to latest government data.
With respect to the funding requirements, as against an indicative cost of about Rs 20,100 crore for the NOFN project, an amount of Rs 3,054.43 crore has been released till October 31, 2015, by the Universal Service Obligation Fund to BBNL.
A review done by the DoT in mid-2015 showed that the biggest hurdle dogging the project is the right-of-way issue.
Despite the Centre having agreements with the state governments for getting the right-of-way available free of cost, officers involved in the implementation have reported back that “whenever they go to lay the optical fibre, they run into construction and population issues…even in the fields, the farmers have objections”.
States such as Andhra Pradesh have come up with a model under which it proposed to float its own corporation that will take up the work of laying the optical fibre cable network, asking the Centre that the funds earmarked to be spent for this project in AP should be handed over directly to it as support. Andhra Pradesh’s proposal was accorded a go-ahead by the Telecom Commission, following which Tamil Nadu and Gujarat have also come up with a similar proposal for the implementation of the NOFN project.
“Trai has flagged the risk of RoW and suggested putting in place safeguards. RoW requires streamlining of rules across different agencies and states. RoW involves a wide number of agencies including state governments, forest departments with the infrastructure requirement of digging land for laying the cable. Trai has flagged those issues and the solutions are not easy as it requires a lot of streamlining of policy. Being an executive authority, Trai can only recommend coordination for RoW among the various agencies,” Mahesh Uppal, director, ComFirst India said.
Other incentives for private sector Experts say the telecom regulator has attempted to involve the private sector keeping their profitability in mind in the latest set of recommendations, with the most important one of them being to allow concessionaires or private companies to utilise the extra capacity.
“One critical recommendation has been the one to allow private sector to generate revenue from extra capacity. For instance, if the private company builds up the fibre network and 50 per cent of it is used by BharatNet, it can make money the way it wants from the remaining unutilised 50 per cent,” Hemant Joshi, telecom leader, Deloitte India said.
The telecom regulator in its recommendations has said that the scope of the concessionaire’s work should include both the deployment and the implementation of the OFC and other network infrastructure as well as operating the network for the concession period.
“Concessionaires shall be entitled to proceeds of revenue from dark fibre and/or bandwidth,” it said. “Private sector cannot be deployed in this project without giving them incentives first. Private sector needs to be involved in investment, in infrastructure and then in running the project,” Uppal said.
Experts said among the other suggestions by Trai that are beneficial for the private sector, include selection of concessionaires through a reverse bidding process to determine minimum viability gap funding (VGF) sought for the concession. The use of reverse bid process to determine the lowest VGF sought can ensure that amount of support from public funds in rational, the regulator had said.
To keep a check monopolistic behaviour on the part of the concessionaire as well as lowering the perceived risks and cost of obtaining private finances for the project, Trai had suggested that central and state government should become minority partner of the concessionaire with 26 per cent stake.
The regulator has also suggested that period of concession should be of 25 years which can be further extended in block of 10, 20 or 30 years.
Progress in numbers
> 1,00,000: Number of gram panchayats (GPs) that were initially targeted for implementation
> 50,000: Number of GPs the plan was scaled down to.
> 20,000: Number of GPs that have been covered under NOFN which is just 40% of the planned target.
> Rs 3,054.43 crore has been released till October 31, 2015, by the Universal Service Obligation Fund to BBNL
> Rs 20,100 crore is the indicative cost of the project