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HomeArticlesBroadbandIn Search of a Workable Model for NOFN
Tuesday, 08 December 2015 12:18

In Search of a Workable Model for NOFN

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The Telecom Regulatory Authority of India (TRAI) has issued a Consultation Paper on ‘Implementation Model for BharatNet’.

Digital India was conceived by weaving various strands of communication and information technology for digital empowerment of citizens and delivering better governance. Establishment of broadband highways forms the first pillar of Digital India. The implementation of NOFN was not moving as per plans to achive this objective. TRAI had given certain recommendations on ‘Delivering Broadband Quickly: What do we need to do?’ on 17th April, 2015. In addition, DoT had appointed an expert Committee which submitted its detailed report recommending rechristening of the project as Bharat Net with three implementation models.

Considering some views regarding the implementation raised by stakeholders the Authority looked into one more possible alternate model “Build-Own-Operate-Transfer” (BOOT) model. The Authority has come out with this Consultation Paper (CP) to discuss issues related to strategies to find best model of implementation for Bharat Net.

Historically, the Universal Access and Service (UAS) concept was developed to specifically meet the needs of people in urban and remote areas for communication services recognized and required to be universal at the national level. Establishment or adoption of existing UAS programmes for broadband delivery is one way to support the universality of broadband services. One of the principal objectives of broadband UAS is to minimize the digital divide between urban and rural and between affluent and poor areas; which also happens to be the most important prerequisite to realize the Digital India vision.

ITU defines universal access as the situation where “everyone can access the service somewhere at a public place, also called public, community or shared access”. In India the concept of providing universal access was modified to democratize information and make it freely and easily available to the people at large in order to improve transparency, accountability, collaboration, cooperation, productivity and efficiency. Considering that at the core of governance structure in rural India are the 2,50,000 Gram Panchayats (GPs) which are the foundational nodes of information collection and dissemination and the service delivery points for Government administration, the National Optical Fibre Network (NOFN) project was approved on October 25, 2011.The main objective of the NOFN project was to extend the existing Optical Fibre Network to Panchayats by utilizing Universal Service Obligation Funds (USOF) and creating an institutional mechanism for management and operation of NOFN. Bharat Broadband Network Limited (BBNL) a Special Purpose Vehicle (SPV), was set up by the Government of India in 2011, for the establishment, management and operation of NOFN.

The salient features of the envisaged NOFN

(a)2.4 km cable per GP. Under NOFN it was planned to lay Optical Fibre Cable (OFC) connecting all the 2, 50,000 GPs of the country. The project was to use the existing OFC of BSNL, which is ready upto 6,500 odd Blocks. Only the incremental fibre averaging around 2.4 km per GP was planned to be laid.

(b) Users. Using the fibre, bandwidth of 100 Mbps was planned to be provided to each GP for the use of local administration, panchayat, schools, colleges, hospitals, Primary Health Centres (PHCs), residents of the area and private parties etc.

(c)Implementation. The project was to be implemented by BBNL which was to procure the equipment such as Gigabit Passive Optical Network (GPON) and the OFC. The laying of the cable was planned to be done by three CPSUs – BSNL, RailTel and PGCIL who were assigned the work in the ratio of 70:15:15 respectively. BBNL was to act as a wholesale bandwidth provider and was granted NLDO license. Non-discriminatory access to the NOFN was to be provided to all Service Providers. The connectivity at the GP was proposed to be augmented in Government User Network (GUN) where backhaul from the block to the district, as well as last mile access to three Government institutions were proposed to be provided at Government cost.

Review of NOFN

The network was supposed to be commissioned in 2 years at a cost tentatively estimated at Rs. 20,000 crores. As per BBNL website, as on 02nd November 2015 only 3384 GPs have been connected. In the meanwhile, the Government of India has launched the Digital India programme with the vision of transforming India into a digitally empowered society and knowledge economy. Establishment of broadband highways forms the first pillar of Digital India which will depend on timely commissioning of NOFN.

In this backdrop, the Telecom Regulatory Authority of India (TRAI) came out with a Consultation Paper (CP) on 24th September 2014 on ‘Delivering Broadband Quickly: What do we need to do?’ 

The TRAI in its Recommendations on ‘Delivering Broadband Quickly: What do we need to do?’ dated 17th April, 2015 covered various aspects on delivery of broadband. It Recommended that-

  • BBNL should award turnkey contracts to private parties through international competitive bidding. Such contracts can be given region-wise with clear requirements for interconnection with other networks, as well as infrastructure sharing with other operators who would like to utilize this network.

  • NOFN involves laying of incremental OFC only. However, at various places, the problem of existing OFC being in an unusable condition is being encountered which renders the OFC being laid of no use. Therefore, there is a need to cater for connecting the NOFN OFC directly to the PoP at District level in such cases.

DoT constituted a Committee to review the strategy and approach towards speedy implementation of NOFN and the ‘Report of the Committee on National Optical Fibre Network (NOFN)’ is available on the DoT’s website.

Encourage and Attract Private Sector Investment

It is generally accepted that the private sector should be the primary driver of broadband development in most cases. Particularly when Government resources are limited, sufficient public money may not be available for broadband infrastructure spending. Encouraging private investments will require Government to conduct an honest evaluation of the extent to which it can make a profitable market opportunity for private sector investors.

BharatNet Implementation Strategy

Multiple model approach that spreads risks and builds on available capacities would be the most appropriate way of working out an implementation strategy. The three models suggested are:


(b)State Government-led

(c)Private sector-led (EPC/Consortia)

CPSU-Led Model

The CPSU would be required to complete the entire network segment on a turnkey basis. Post commissioning of the network, necessary monitoring operations would be carried out through a centralized Network Operation Centre (NOC) facility under the management and control of BBNL.

State Government-Led Model

In the State Government-led implementation model, the State Government shall design, customize according to its requirements, implement, commission, manage and operate the network. For the purpose the State Government shall create or assign a State Special Purpose Vehicle (SPV) for carrying out all project activities.

Private Sector-Led Model (EPC/Consortia)

In the Private Sector-Led model bids will be invited from a consortium on a ‘Build and Maintain’ basis with the lead bidder for single window clearance. The consortium should include Engineering Procurement and Construction (EPC), Network Original Equipment Manufacturer (OEM) or System integrator and managed services provider.

The TRAI has suggested Buildown-Operate-Transfer (BOOT) in addition to the three models proposed by a telecom department (DoT) panel for implementing BharatNet

BharatNet- BOOT Model

The BOOT (Build, Own, Operate and Transfer) model is outcome oriented and the selected agency is required to deliver desired outcome in a given time frame. The executing agency may require flexibility to survey the route plan for laying optical fibre to minimize its cost. The existing agency may also like to use technology of its own choice and like to upgrade the technology with time. The topology of BharatNet has been explained in detail in the report of the Committee on NOFN. However, the selected executing agency may not consider it as a most appropriate and efficient way for completing the project in a time bound manner. There may be a need to give flexibility to the executing agency in terms of selection of route of laying optical fibre, construction, topology and deployment of technology.

One apprehension raised in the BOOT Model is that, if executing agency which is also providing retail services is selected for the project, it may like to vertically integrate its services and monopolize the market which may defeat the basic purpose of affordable broadband in rural areas. Therefore, there is a need to put in place certain conditions so that conflict of interest can be avoided. In this context, the eligibility criteria and selection process for the executing agency becomes very important.

The cost for setting up the massive broadband network is now estimated to be Rs. 72,000-74,000 crore as against the initial estimate of Rs. 20,000 crore. Among other issues, it has also sought views on the funding of the project and in case it is viability gap funding, it has asked for stakeholder views on the method required to determine the maximum value of funding for each state or service area.

The authority has also asked for responses on the measures required that broadband services remain affordable to the public at large and has also asked for suggestions on imposing fiscal incentive on the agency for completing the project in time or disincentive in case of delay.

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