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India's Leading Source for Broadcasting & Broadband Information - CableQuest Magazine
HomeArticlesBroadbandBharatNet, the backbone of Digital India
Thursday, 07 January 2016 05:18

BharatNet, the backbone of Digital India

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Telecom Regulatory Authority of India (TRAI) held an Open House Discussion (OHD) on implementing BharatNet for making high speed broadband reach 250000 gram panchayats in the country at the Manekshaw Centre, Delhi Cantt on 18 December 2015.

BharatNet is the new name for National Optical Fiber Network kept by the NDA government to implement the network as a part of Digital India initiative to connect whole of India including rural India with high speed (20 mbps) broadband to provide internet, voice, e-governess, e-commerce and television entertainment on the network to people of India. 

Building the knowledge economy is the key to solving many of our social and economic challenges as it will help in creating new growth opportunities for the masses in general. A recent study by Deloitte found that the Internet is already an important driver of economic growth in many developing countries.

 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. However the project literally failed to take off due to faults in its implementation strategies.

The network was supposed to be commissioned in 2 years at a cost tentatively estimated at Rs. 20,000 crores. However, till date only 3700 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.

TRAI on 17 November 2015 issued a Consultation Paper on Implementation Model for BharatNet. The objective of this Consultation Paper (CP) is to discuss strategies to find best model for implementation of BharatNet. After receiving the comments from stakeholders, TRAI held this Open House Discussion. Stake holders who attended the OHD included representatives from Telcos like Reliance, Airtel Bharti, Vodafone, Tata Communications, VSNL etc, representatives from associations like COAI, AUSPI, Broadband India Forum and COFI and telecom equipment manufacturers. TRAI chairperson, Sh R S Sharma chaired the discussion.

Stakeholders had many doubts about the funding of the project, type of subsidy/ incentives given by the government and last mile connectivity. Many felt that the policy is not yet properly shaped up. Issues concerning RoW, Monopoly of the private partner and tariffs also cropped up in the discussion. Retailing of services was also discussed and problem of Viability Gap Funding both at wholesale and retail level were discussed. Even question of operational viability also was brought up.

VSNL brought out that it has already reached its fiber to 50000 GPs laying a 7000 KM of OFC and could be utilized rather than build a new network all over again.  However, TRAI Chairperson did not agree to the proposal as he said that the Government had a different concept of the project that would not fit with this network.

Col K K Sharma of cable Quest brought out that it was the right time to initiate action to integrate Cable networks with the BharatNet to resolve the last mile issue as cable operators have connected 35-40 million households in rural India with broadband enabled network. As rural India falls in the Phase IV of Digitisation that will end on 31 December 2016, integrating cable networks with BharatNet will help these networks to digitize apart from providing broadband services. He also listed out a strategy for this integration as below:-

1.District/Block level state officials could be asked to collect details of Cable Operators working in the Gram Panchayats and extent of OFC already laid by them. 

2.Above Data to be saved by BBNL and provided to Telcos who have got the contracts to build the networks.

3.Technical and Financial help to be given to these operators whose networks are earmarked for integration.

4.Utilise their trained manpower for last mile operation, maintenance and marketing. 

5.Technology for integration could be any including Wi-Fi, FTTH, Ethernet or Docsis.

It was informed that these networks were best suited for the purpose as the manpower belonged to the area with thorough knowledge of the market, people and the geography. These networks are already in operation since many years providing 50- 100 TV channels and making profits whereas new telcos will have to incur heavy expenditure and employ a large number of manpower to service and operate these networks.

A Committee was also constituted by DOT to find out the causes of slow progress of the NOFN project and suggest remedial measures.

However, TRAI suggested BOOT Model for thye project for which it has asked for the commects from the stake holders.

BOOT Model proposed by TRAI

Build-Own-Operate-Transfer (BOOT) model is a form of concession in which a public authority makes an agreement with a private company (concessionaire) to Design, Build, Own and Operate a specific piece of an infrastructure such as a power plant, road, a bridge, a telecom network etc. along with the right to earn income from the facility for a pre-decided period of time (concession period approximately 15-25 years), and later transferring it back into public ownership.

 In the BOOT model, the Government is not directly involved in the day to day implementation issues of the projects, but subsidizes one market actor to upgrade its own infrastructure or build new one. Government only provides the Viability Gap Funding (VGF) to make it commercially viable to the operator. 

The advantages of BOOT model in the delivery of technically and economically efficient infrastructure is buttressed by the following perceived advantages:

 (a)The model is perceived as an institutional arrangement as it is believed to remedy the lack of dynamism in traditional public service delivery. This perception is centred on efficiency in public savings as well as reduction of the burden on strained public resources.

(b) The model enables the inflow of private financing for expanding public services. The involvement of the private sector involves clearer objectives, innovation, flexibility, better planning and improved incentives for competitive tendering and greater value for money for public services. Further, private sector participation leads to the lowering of cost and the risk for the public sector. 

(c)The model enables both public and private sector to synergise their strengths in building/developing the infrastructure to the mutual advantage of both. For the public sector, there is improvement on the programme performance, cost efficiencies, better service provision and the appropriate allocation of risks and responsibilities. For the private sector, because of a better investment potential, it provides them an opportunity to make a reasonable profit and expand their business.

 (d)The model brings out the best of both the public and private sector. Whereas it reduces the burden on public budget for infrastructure 24 development, it mitigates risks through the involvement of multiple agencies; it encourages private investment and transfer of technology and know-how. Under the right conditions such a model can leverage relative strength of public and private sector to achieve the goal.

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