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Government initiatives to promote broadband growth

August 31, 2012

While the Indian wireless space has registered overwhelming growth, the broadband segment still has miles to go. At the end of May 2012, the total wireless user base in the country stood at 929.37 million while the number of broadband users was only 14.31 million.

The government has, in recent years, been taking various initiatives to provide a fillip to the broadband segment. In December 2010, the Telecom Regulatory Authority of India (TRAI) released the National Broadband Plan (NBP), with the objective of creating a robust broadband infrastructure and providing an institutional framework for promoting broadband. The plan charted out an ambitious broadband network roll-out strategy.

Further, the recently approved National Telecom Policy (NTP), 2012 is expected to promote service uptake. It envisages providing “broadband for all” at a minimum download speed of 2 Mbps and improving rural teledensity from the current level of around 39 per cent to 70 per cent by 2017, and further to 100 per cent by 2020.

The following are the initiatives taken by the government to promote the uptake of broadband services...


The NBP envisages the provision of 75 million broadband connections (17 million DSL, 30 million cable and 28 million wireless broadband) by 2012 and 160 million broadband connections (22 million DSL, 78 million cable and 60 million wireless broadband) by 2014. This network will be established at an investment of Rs 600 billion, and will be financed by the Universal Service Obligation (USO) Fund as well as the loan sanctioned by the central government.

The connections will be based on an open access optic fibre cable (OFC) network connecting all habitations with a population of 500 and above, and will be established in two phases. The first phase, covering all cities, urban areas and gram panchayats, will be completed by 2012. Under Phase II, the network will be extended to areas with a population of more than 500 by 2013. The OFC network would support backhaul bandwidth requirements for the provision of broadband and facilitate its growth.

The OFC network would support the following bandwidths: 10 Mbps download speed per household in 63 metros and large cities covered under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), for every wireline connection by 2014; 4 Mbps download speed per household in 352 cities for every wireline connection by 2014; and 2 Mbps download speed per household in towns and villages for every wireline connection by 2014. The upload speed would be half the download speed.

A national optical fibre agency (NOFA) will be set up to establish this broadband network. The NOFA is proposed to be a 100 per cent central government-owned company. It will establish networks in all the 63 cities covered under the JNNURM.  A state optical fibre agency (SOFA) would be formed in every state, with 51 per cent equity held by the NOFA and 49 per cent by the respective state governments. The NOFA would be the holding company for all the SOFAs. Under the guidance of NOFA, the SOFAs will establish networks and backhaul in rural and urban areas other than the cities covered under the JNNURM. Work related to the national broadband network will be taken up in the states only after signing an undertaking to this effect.


The most important initiative under the NBP is the National Optical Fibre Network (NOFN) project, which aims to connect 250,000 gram panchayats by 2012. This project was approved in October 2011 and will be completed by October 2013. It is being undertaken by the Department of Information Technology in collaboration with Bharat Sanchar Nigam Limited (BSNL), and will be implemented by Bharat Broadband Network Limited (BBNL).

The project has been envisaged as a joint effort of the state and central governments. It is being funded by the government via the USO Fund. A tripartite MoU has been signed between the state and central governments and BBNL.

The state governments are expected to not levy any right-of-way charges (including reinstatement charges), which are to be paid by BSNL. BBNL will function as the bandwidth provider for the project. The NOFN will be used by operators, internet service providers and cable TV operators in a non-discriminatory manner and will be a business-to-business set-up.

The project is expected to ensure that broadband connectivity of at least 100 Mbps is available at each gram panchayat, and applications such as e-health, e-education, e-governance, e-commerce and videoconferencing are supported. It is also likely to enable effective and speedy implementation of various mission mode e-governance projects initiated by the Department of Information Technology as well as deliver a range of electronic services by the private sector in rural areas.

Besides, the panchayats will be connected and thus be able to monitor various government schemes including the allotment of Aadhar cards. These applications will use the NOFN to connect rural areas with educational institutions and health and central government services.

USO Fund schemes

The government has taken several initiatives to promote rural broadband services through the USO Fund. Under the wireline broadband scheme, the USO Fund administration signed an agreement with BSNL in January 2009 to provide 861,459 wireline broadband connections to individual users and government institutions, from the 27,789 DSL access multiplexers installed at existing rural and remote exchanges, by 2014. The scheme aims to provide broadband services at all the 28,672 rural wireline exchanges of BSNL. Further, the operator is required to set up at least one kiosk or broadband centre for public access from each designated exchange.

Another initiative taken by the USO Fund is the augmentation, creation and management of intra-district OFC network for transport of rural/remote area traffic on a bandwidth sharing basis in the Assam circle.

This OFC scheme has been undertaken on a build-own-operate basis. BSNL has built the network and is responsible for operating and managing all the equipment/infrastructure for the provisioned intra-district OFC transport network. All the locations have been connected on physical OFC ring routes with the district headquarters’ nodes, ensuring cable route diversity and a ring capacity of at least 2.5 Gbps, with the capability to efficiently transport various protocols, including time-division multiplexing, internet protocol, frame relay, etc., for integrated voice, data and video signals. At least 70 per cent of the subsidised bandwidth capacity created under the scheme has to be shared with the licensed service providers in Assam at a rate not more than 26.22 per cent of the current TRAI ceiling tariffs.

After Assam, the north-eastern circles (comprising Meghalaya, Manipur, Tripura, Mizoram, Arunachal Pradesh and Nagaland) will be taken up for implementation. In this regard, bids were invited and RailTel emerged as the L1 bidder. The USO Fund administration has recently signed an agreement for the same.

In addition, the wireless broadband scheme aims at providing mobile wireless broadband coverage to about 550,000 villages by utilising the existing telecom infrastructure. Under this, subsidy support will be offered to two service providers for network creation and coverage. The broadband services will be technology neutral with a minimum speed of 512 kbps and special USO Fund tariff plans will be introduced. The draft tender is currently available for examination by various stakeholders.

Other government initiatives

The government, in collaboration with IIT Bombay, unveiled an upgraded version of the Aakash ultra-low-cost tablet in June 2012. Priced at Rs 2,263, the Aakash 2 tablet has an 800 MHz processor, a capacitive touchscreen and a 2000 mAh battery. It will initially be available to all engineering students by December 2012.

To support broadband infrastructure roll-out in rural areas, the Department of Telecommunications has proposed to offer a slew of concessions at the panchayat level. These include providing three broadband connections to every gram panchayat for three years, along with free installation of a computer and printer, three telephone connections and one cable TV connection. The initiative will cost about Rs 20 billion, which will be financed through the USO Fund.

In sum, factors like the launch of 4G and various ambitious projects undertaken by the government will ensure better broadband uptake in the country


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