The Union Cabinet has recently announced the approval of a Viability Gap Funding amounting to Rs. 19,041 crore for the implementation of the BharatNet project under the Public-Private Partnership model.
Understanding the Public-Private Partnership Model
A Public-Private Partnership (PPP) involves cooperation between a government agency and a private-sector company to finance, construct, and operate projects. This collaborative approach in telecom infrastructure is a new initiative. The Viability Gap Funding (VGF) refers to a one-time or deferred grant offered to back infrastructure projects that are economically justified but not financially viable.
About the BharatNet Project
BharatNet stands as the world’s largest rural broadband connectivity program that employs Optical fibre. Additionally, it’s a flagship mission executed by Bharat Broadband Network Ltd. (BBNL). BBNL is recognized as a Special Purpose Vehicle created by the Indian Government under the Companies Act, 1956, with an authorized capital of Rs 1000 crore.
The project aims to provide affordable broadband connectivity ranging from 2 Mbps to 20 Mbps to all households while offering on-demand capacity to all institutions. The vision moving forward is to realize Digital India in partnership with States and the private sector. The Department of Telecommunication under the Ministry of Communications leads its execution.
National Optical Fibre Network (NOFN), launched in October 2011, was rebranded as the Bharat Net Project in 2015. Initially, NOFN was imagined as an information superhighway creating a robust middle-mile infrastructure enabling broadband connectivity to Gram Panchayats. The Ministry of Communications introduced the ‘National Broadband Mission’ in 2019 to facilitate universal and equitable access to broadband services across India.
Funding for the BharatNet Project
The entire project gets financial support from the Universal Service Obligation Fund (USOF), which aims to enhance telecom services in rural and remote areas of the country. The main objective is to enable delivery of e-governance, e-health, e-education, e-banking, Internet and other services to rural India.
Phases of BharatNet Project
The project is divided into three phases:
1. First Phase: Providing broadband connectivity to one lakh gram panchayats by laying underground Optic Fibre Cable (OFC) lines by December 2017.
2. Second Phase: Ensuring connectivity to all gram panchayats in India using a combination of underground fibre, fibre over power lines, radio and satellite media by March 2019.
3. Third Phase: From 2019 to 2023, building a state-of-the-art network, including fibre between districts and blocks, with ring topology for redundancy.
Expansion of BharatNet
The project will expand to cover all inhabited villages beyond the gram panchayats in 16 States including Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Meghalaya, Manipur, Mizoram, Tripura, Nagaland and Arunachal Pradesh.
The revised strategy will involve creation, upgrading, operation, maintenance and use of BharatNet by a private sector partner, selected via an international competitive bidding process. This partner will ensure reliable, high-speed broadband services according to a predefined Services Level Agreement (SLA).
The Significance of Public-Private Partnership in BharatNet
The PPP model in BharatNet brings numerous advantages:
1. Faster Roll Out: The model leverages private sector efficiency for operation, maintenance, revenue generation and is expected to expedite the roll-out of BharatNet.
2. Increased Investment: The private sector partner is expected to bring an equity investment and raise resources for capital expenditure and the operation and maintenance of the network.
3. Better Access: Extension of BharatNet will facilitate better access to e-services offered by various governments, enable online education, telemedicine, skill development, e-commerce, and other broadband applications.