BSNL won’t get sole responsibility for rural broadband rollout

The telecom ministry has reportedly accepted a finance ministry suggestion that state-owned Bharatiya Sanchar Nigam Ltd must not be solely entrusted with the Rs20,000-crore project to build a national broadband network to take high-speed internet to the hinterland, where internet connectivity is still a far cry.

Instead, a special purpose vehicle (SPV) with equity participation from BSNL and fellow-concern Mahahangar Telephone Nigam Ltd – which services Mumbai and Delhi – as well as other public sector companies such as RailTel, gas supplier GAIL Ltd, and PowerGrid Corp, among others, will now undertake this project, which involves laying 1100,000 km of optic fibre network connecting over 250,000 panchayats across the country.

According to The Economic Times, the department of telecommunications (DoT) in its proposal to the cabinet has said that private players would later be inducted into the SPV through equity expansion. "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 information technology 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 using the Universal Service Obligation Fund (USOF). Telecom companies contribute 5 per cent of their annual revenues towards this fund, which is meant to support rural telephony. The unused amount in this kitty is estimated to be about Rs20,000 crore, and this is expected to increase to Rs36,000 crore in the next 36 months.

Sibal said that the initial phase of this project would cost about Rs20,000 crore and a similar amount of investment was likely from the private sector towards this.