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Tuesday, February 18, 2020

Private telecom firms look to cut capex, approach BBNL to lease ‘dark fibre’

The hitherto unused infrastructure will be used by these companies to expand their presence in rural India and offer 4G as well as other long-term evolution (LTE) mobile telephony services, according to official documents accessed by The Indian Express.

Written by Aashish Aryan | New Delhi | Updated: February 10, 2020 12:30:41 am
telecom service providers, Bharti Airtel, Vodafone, Reliance, Reliance Jio, Business news, Indian Express The bandwidth requested by all the telecom service providers is a part of the dark fibre laid out by BBNL while working on the BharatNet project.

In a bid to cut down on capital expenditure, the three major telecom service providers — Reliance Jio Infocomm, Bharti Airtel and Vodafone Idea — have reached out to state-run Bharat Broadband Network Limited (BBNL) to use the dark fibre laid by the latter.

The hitherto unused infrastructure will be used by these companies to expand their presence in rural India and offer 4G as well as other long-term evolution (LTE) mobile telephony services, according to official documents accessed by The Indian Express.

Explained

Will help in savings, expansion for telcos

The telcos’ plan to lease hitherto unused dark fibre from BBNL is likely to lead to savings for them on capital expenditure for the next 10 years. These telcos, which most often have connectivity till block level, will find it easy to expand into villages and offer services such as 4G to new customers. It could also lead to BBNL finding it easier to carry out maintenance work as the presence of a user at the end of the fibre would keep it updated about the status of the optical fibre laid.

The bandwidth requested by all the telecom service providers is a part of the dark fibre laid out by BBNL while working on the BharatNet project.

Dark fibre is the extra optical fibre laid by companies in order to avoid cost repetition when more bandwidth is needed.

Reliance Jio, Bharti Airtel and Vodafone Idea did not respond to emailed queries on how much money they were willing to invest in the project and whether they had been handed over any service ready gram panchayat so far.

The move by telcos to use BBNL’s infrastructure is likely to result in savings on capital expenditure for them.

The telcos have so far deposited a small amount of Rs 17.86 crore in total as advance for BBNL to start work on handing over the dark fibre to them.

Of this, while Bharti Airtel has deposited an advance of Rs 4.5 crore, Reliance Jio has submitted nearly Rs 13.2 crore with BBNL for the work.

Vodafone Idea has submitted a total of Rs 16 lakh to gain access to 205 gram panchayats.

Apart from the advance, the telcos will also be paying nominal quarterly rent to BBNL for using the optical fibre laid out by it.

Incidentally, the three telcos had in 2017 refused to participate in a BBNL tender to participate in the BharatNet programme.

BBNL — which is the implementing agency for BharatNet — had then come out with a Rs 10,000-crore tender, “to provide Broadband services through WiFi Hot Spots”, for a period of five years.

The implementing agency, BBNL had then said, was also to undertake end-to-end maintenance and marketing to “enhance use of BharatNet network”. The 2017 tender also failed as “the rules then mandated that telcos mandatorily provide WiFi services” if they bid for the project, sources in the Department of Telecommunications told The Indian Express.

“So we had at that time offered that we will give around Rs 80,000 per WiFi they set up. For the telecom service providers, the cost of setting a base transceiver station was coming to around Rs 1.3 crore. That was not viable for them,” a Ministry source said.

This time around, the cost for telcos will be significantly lower as they are looking only to lease the unused fibre, the source said, adding that the costs involved were spread over 10 years, so it would not be very significant.

Reliance Jio — which is now the biggest telecom service provider by subscriber base — has submitted a list of 35,561 gram panchayats that it wants to reach by using the optical fibre laid out by BBNL. To gain access to these gram panchayats, Reliance Jio deposited an advance of Rs 13.2 crore.

“Out of the 35,561 GP (gram panchayat), the feasibility at 28,341 GP was provided to them. Further, Reliance Jio was given one month’s free trial or services,” according to the official documents.

The number of gram panchayats Reliance Jio has requested access to is more than ten times the number of gram panchayats Bharti Airtel and Vodafone Idea have requested access to, the documents show.

While Bharti Airtel has requested access to 3,096 gram panchayats, the combined entity of Vodafone Idea had requested to use BBNL’s fibre network for 205 gram panchayats.

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