BSNL and others to build Rs 20k cr broadband network

The telecom ministry has accepted the finance ministry's stance that state-owned BSNL must not be entrusted with the 20,000-crore project to build a national broadband network to take high-speed internet to the hinterlands.

A special purpose vehicle (SPV) with equity participation from state-owned telcos BSNL and MTNL and other public sector units such asRailTel, Gail and PowerGrid, among others, will now undertake this project as demanded by the finance ministry. This initiative involves laying 11 lakh km of optic fibre network connecting over 2.5 lakh panchayats across the country.

The Department of Telecom (DoT) in its proposal to the Cabinet has said that private players would be 'inducted' into the SPV by equity expansion at a later date. "This stage could be considered at any point when it is felt that it would add value to the objectives of the programme," the Cabinet note seeking approval for this project added.

In July, communications and IT minister Kapil Sibal had said that the telecom commission, the apex decision making body of the department, had approved the project to build this network that would connect all the gram panchayats utilising the Universal Service Obligation Fund (USOF). Sibal said that the initial phase of this project would cost about Rs 20,000 crore and added that a similar amount of investment was likely from the private sector towards this.

Telecom companies contribute 5% of their annual revenues towards this fund, which is used to support rural telephony, and the unutilised amount in this kitty is estimated to be about Rs 20,000 crore and this is expected to increase to Rs 36,000 crore within the next 36 months. But the proposal was delayed after the finance ministry raised concerns on the agency that would implement it.

The DoT shared the view that an SPV should only be created for managing the fibre network after it is built by BSNL. The finance ministry, on the other hand, had demanded that the SPV be entrusted with both the rollout and managing the network. The DoT in its Cabinet note has also added that it had already formed a high-level committee (HLC) and an advisory body to oversee the project.

"The project implementation team consisting of members of BSNL, PowerGrid, RailTel, National Informatics Centre and C-DoT is presently looking after various preparatory activities such as geographic information systems mapping, finalisation of network design etc.