BBNL-BSNL merger to make BharatNet project effective

The delay in the Bharatnet project, aimed at connecting gram panchayats through broadband, has resulted in a cost escalation from Rs 20,100 crore to Rs 61,109 crore. This is partly due to the ineffectiveness of Bharat Broadband Network (BBNL), the entity set up to implement the project to connect 250,000 gram panchayats with optic fibre, for high-speed broadband connectivity.

With BBNL not delivering the desired results, the government now plans to merge BBNL with BSNL. The merger is expected to yield better synergies and coordination.

The government will also come out with a revised public private partnership (PPP) model for Bharatnet. No company participated in the tender floated in July last year to provide optical fibre connectivity to cover 361,000 villages across 16 states with a total cost of Rs 29,430 crore. The government provided Rs 19,041 crore as viability gap funding. Prospective bidders had pointed out the terms and conditions were too onerous and the revenue sharing model was not viable.

BBNL was incorporated in February 2012 as a special purpose vehicle for implementing the national optical fibre network (now renamed Bharatnet). But ostensibly due to poor coordination between multiple agencies, BBNL has failed to meet targets.

The delay around Bharatnet can be gauged from the fact that the Union Cabinet had approved the project on October 25, 2011 and it was to be completed in three years. But even after 11 years, only around 172,000 gram panchayats have been made service-ready.

In 2011, when there was not even 4G in the country, plans to provide a speed of 100 mega bit per second (mbps) to rural areas were truly ambitious. But while the country moved from 3G to 4G and soon 5G, many rural areas are still waiting for the promised high-speed broadband. The government now has set a revised target to connect all the 600,000 villages in the country by 2025.

According to an official in the Department of Telecommunications (DoT), Bharatnet was delayed due to several reasons, including the unprecedented scale, scope and geographical spread of the project, poor coordination between multiple agencies, difficulties in obtaining right of way (RoW) permissions and delay in the procurement of equipment.

Currently the end-to-end network starting from the core network to he gram panchayat and village level is managed in parts by different players. Due to the involvement of multiple agencies over different segments, restoration of faults often gets delayed, resulting in poor uptime. Further, officials said, BBNL has limited experience and manpower to ensure operations and maintenance of telecom networks or in marketing and commercial utilisation.

BBNL just has 15-16 permanent employees on its rolls while the remaining staff is on deputation; in all, it has around 240-250 people. BBNL, to a large extent, depends upon BSNL to provide the connectivity and bandwidth at the block or village level. There have been many occasions when BSNL failed to deliver on commitments to Bharatnet, officials said.

A few years ago, BBNL started to cut down on Bharatnet work to BSNL because the telecom firm was not utilising the funds and using some of it to pay salaries. The operations and maintenance of fibre for around 1.20 lakh gram panchayats was also taken away from BSNL and given to CSC SPV.

Further, BBNL was created as a project management entity and has no apparatus for marketing, which makes in unviable as a stand-alone entity, experts point out. The government now feels that BSNL has the capacity to take up all the responsibilities currently being managed by BBNL including operations and maintenance of the already laid network and its utilisation. “Management of Bharatnet, including O&M and utilisation of existing network, with a single agency will bring synergy and greater accountability, resulting in better outcomes.

When the tender or the PPP was floated, around 50 companies, including telecom operators, internet service providers (ISPs), over-the-top (OTT) players and original equipment manufacturers (OEMs) engaged with the government during two rounds of bid interactions. The government issued clarifications for around 3,000 queries from the prospective bidders but despite that no bid was received. Financial Express