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Construction of the pan-India Digital Highway of Optic Fibre

BharatNet -Great Progress despite Formidable Challenges
It is often considered to be unsophisticated and unfashionable to appreciate actions or initiatives of a government agency or the regulator. So has it been with BharatNet – the world’s biggest and most ambitious Optic Fibre Cable (OFC) based Project for digital connectivity, conceived and initiated by the Government of India, Department of Telecommunications several years ago but not appreciated enough by the stakeholders. In size, scale, complexity and targeted reach, other international projects pale in comparison.

Sample this: Brazil’s PNBL (Programa Nacional de Banda Larga) provides broadband access to approximately 68.2 million users in 2930 cities across the country, which has a total population of 212,559,417. Australia, with a population of 25,821,398, has the NBN – a wholesale broadband access network which supplies services and infrastructure to phone and internet providers, that eventually serves almost 8.2 million homes and businesses in both urban and rural setups. The USA’s Rural Digital Opportunity Fund (RDOF) launched in 2019, is an FCC program designed to close the digital divide amongst the country’s 331,002,651 strong population, by bringing broadband to over 5 million homes – specifically in the rural, unserved and underserved regions. Malaysia setup the National Broadband Initiative (NBI) in 2010, as a national strategy to bring broadband to the entire nation of 32,365,999 people. Indonesia’s National Broadband Plan (2014-2019) expects to cover 49% of households, and also provide mobile internet access to 52% of their total population of 273,523,615 nationals.

In comparison, BharatNet is committed to connect the 2.5 lakh Gram Panchayats or GPs (Local Self Government centres at the main villages or small towns) in our country, governing an incredible 6,40,000 villages (approximately) in total. Our Hon’ble Prime Minister has recently exhorted that we must connect with fibre, not just the GPs, but all the 640000 villages! One can only imagine the humungous outreach implied in terms of the geography and users to be served!

However, it is of utmost criticality for India to have ubiquitous fibre connectivity if it is to have high quality broadband for all, achieve digitalization, improved healthcare and Industry 4.0 or even have an effective 5G. Without the backhaul and carriage capacity of optic fibre cable, it would simply be impossible to cope with the enormous data generated by our billion users.

Resource Availability: The goal of rolling out a vast network of OFC for a country of India’s size, vast expanse of rural and remote stretches, islands, undulated and hilly terrains, etc.entails very large capital outlays and extremely long gestation periods for payback to cover investments. Accomplishment of such a goal is therefore heavily influenced by the financial and resources status of the nation concerned. Here, when we compare the GDP per capita indicator which represents the country’s standard of living, India, with GDP per capita of USD 1900.70; is in a far more difficult position as compared to the earlier-mentioned countries; USA with US$ 63,543; Australia with US$ 51,812.2; Malaysia with US$ 10,401.8; Brazil with US$ 6,796.8 and Indonesia having US$ 3869.6. This clearly indicates that the implementation of such a large-scale nationwide project like BharatNet is much more challenging for India, in terms of the economic resources available to us.

It’s no surprise then, that such a massive project focused on connecting the rural topography with inherent roll-out and feasibility constraints, will be replete with challenges. It is extremely creditable that almost 2/3rd (1.75 Lakh) of the total GPs in the country have already been connected, despite the odds.

A recent media report states that data consumption in rural areas has increased by 400% in the past one year, indicating the huge appetite for internet connectivity in India’s hinterlands. As per the government’s common service centres (CSCs), data consumption through BharatNet in nearly 1,00,000 GPs has surpassed 13,000 terabytes (TB) by June 2021 – an increase of more than 2x from 6,000 TB in 2020; and a giant leap from the 300-400 TB in July 2019. Despite the pandemic’s impact since March 2020, more than 450,000 subscribers have registered for BharatNet, including more than 325,000 users comprising government institutions such as remote police stations, GP offices, post offices, Anganwadi and primary health centres. The CSC Wi-Fi Choupal service also has more than 1.3 million subscribers now. Further, 2 million+ household subscribers are set to benefit from high-speed broadband connections by December this year. The steady progress being achieved in the digitalisation of our rural communities is most commendable!

Sure, there have been some teething problems in the implementation of the previous two phases of the project! The Public-Private-Partnership route introduced for the critical third phase of BharatNet most appropriately should help the project gain more traction and be more equitable to all the stakeholders. The private sector, with its technological capacity and capable project management skills would help achieve speedy execution of the project. Active Government and public sector involvement for funding, policy facilitations and expeditious clearances for timely and efficient execution is also critical.

Several of the challenges of the earlier phases of the project are sought to be overcome through the new provisions introduced in the Phase III-PPP model, viz.:

  • Permits the successful Bidder to Operate, Maintain and Utilise the network for a period of 30 years – This will enable the Bidder to earn revenues from three primary sources, viz. bandwidth sale to users, leasing dark fiber to business entities, and sale of broadband connections. This will essentially provide business viability and attract private entrepreneurs.
  • The period and formula for Revenue Sharing with the Government has been staggered to suit the bidder with ZERO revenue share from Years 1-10, 4% from Years 11 to 20 (except in the North-East where it will remain 1%) and 6% from Years 21 to 30.
  • The Project involves O&M of not just the new roll-out part, but also of the existing and deployed network in the given area. This resolves one critical Ease of doing Business (EoDB) issue of the past, and bidders are now expected to come forward to lease bandwidth.
  • The project also addresses the critical issue of network redundancy which was a gap in Phase I, by upgrading the existing network from Linear to Ring Topology.

We believe the following additional measures may also help ensure success for the programme:

  • Since the selected bidder is required to obtain RoW, it could lead to delays affecting the project roll-out and completion deadlines, and also affect revenue potential of the overall network. The Government/BBNL may help facilitate the bidder by providing free and timely RoW.
  • A choice of Wireless Technologies maybe permitted for use viz. Satellite/E&V bands/Wi-Fi to enable faster roll-outs, circumvent the RoW issues and connect remote areas.
  • Successful Bidders may be sufficiently incentivised and should not be penalised for delays beyond their control.
  • The Government may introduce incentives for Fixed Line Broadband to go hand-in-hand with implementation of this project, to help provide the demand pull in rural areas as the supply of Broadband reaches their doorstep.
  • Reliability and Quality of Service would be a key driver of demand for end consumers. The Project Monitoring Team should ensure that this is maintained 24×7.
  • High Network Uptime is key to High Service Quality Delivery. Some important facilitators for this would include availability of uninterrupted power, safeguards from theft/damage, time to detect and restore faults, etc.
  • Since the Model Concession Agreements include active Government involvement by way of Viability Gap Funding (VGF), clear institutional mechanisms for timely and committed Government contribution may be provided. This is extremely crucial to the successful rollout of the project. Besides, this will help attract private investments into the project.
  • An element of Competition must be infused into the Project to help drive efficiencies in financing, implementation service delivery and operations.

It is indeed highly creditable that India has sculpted an appropriate PPP Model for the execution of the third critical phase of BharatNet. This promises to be yet another globally unique achievement like Aadhaar, UPI and JAM, and we eagerly look forward to its fruition. Private Sector players had also been in favour of a PPP model for BharatNet for quite some time, and it is earnestly hoped that they will come forward strongly to ensure the success of this prestigious project which would help lay the foundation of a Digital Future for entire India.

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