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OFC Focus: Government initiatives to expedite roll-out

July 01, 2013

The government’s initiatives aimed at bridging the digital divide and bringing broadband connectivity to the country’s hinterland have played a key role in driving the demand for optic fibre cable (OFC) in India. Several state-wide area network (SWAN) projects are being operated by state governments, which deploy OFC to provide bandwidth-intensive e-governance services. These networks provide fibre connectivity between the state headquarters and the block level via the district headquarters to facilitate digital governance. The Gujarat SWAN, which was established in 2001, was among the country’s first SWAN projects and is the state’s most efficient network for delivering government-to-government and government-to-consumer services electronically. Currently, SWANs are operated and maintained by 28 states in India.

The country’s biggest OFC project is the National Optical Fibre Network (NOFN), which aims to provide fibre connectivity to all the 250,000 gram panchayats in India by 2015. The Rs 200 billion project is estimated to have an OFC requirement of 1.8-2 million route km. Of the total requirement, Bharat Broadband Network Limited (BBNL) – the company incorporated to oversee project implementation – is planning to deploy 50,000-1 millon route km of fibre. The remaining will be leased from telecom operators which already have fibre networks in these areas. Bharat Sanchar Nigam Limited (BSNL), which is one of the companies responsible for establishing the NOFN, has a total pan-Indian fibre network of around 65,000 route km, a major part of which is present in rural areas. RailTel (which has a pan-Indian OFC network of 45,000 route km) and Powergrid Corporation of Indian Limited (25,000 route km) are the other two entities responsible for NOFN implementation and they have a large OFC network in rural areas. As compared to these players, fibre connectivity offered by private players in these areas is limited.

So far, BBNL has undertaken three pilot projects, through which fibre connectivity was provided to 30 gram panchayats in Arain, Ajmer, Rajasthan; 17 gram panchayats in Parvada, Visakhapatnam, Andhra Pradesh, and 11 gram panchayats in Panisagar, North Tripura. The government plans to provide fibre connectivity to around 10,000 gram panchayats by end-2013 and to 250,000 gram panchayats by 2015, which provides a major opportunity for OFC vendors.

Further, meeting the ambitious broadband targets set under the National Telecom Policy (NTP), 2012 and the government’s aim to ensure “broadband for all” will necessitate OFC network roll-out across the country. Through the NTP, 2012, the government plans to increase the broadband subscriber base from the current 15 million to 175 million by 2017 and to 600 million by 2020. While the majority of connections will be based on the wireless medium, limited spectrum availability will be a key issue in providing bandwidth-intensive services in the long run. In addition, there will be a high fibre requirement for backhaul to support broadband growth.

The Universal Service Obligation (USO) Fund, which provides financial assistance for rural telecom infrastructure development, has also made a significant contribution. Besides funding the NOFN project, the USO Fund has undertaken OFC implementation in the Assam and Northeast circles on a bandwidth sharing basis to meet the backhaul requirements of operators.

Industry expectations

While the government is taking several initiatives towards OFC installation, the telecom industry feels that certain areas need immediate regulatory intervention to drive fibre deployment by operators. The primary area of concern is the high cost of right of way (RoW), which has made laying OFC, specifically in metros and Category A circles, financially unviable for operators. For instance, Bharti Airtel states that only 50 per cent of the total sanctioned fibre networks for a given year in metro circles are installed due to high RoW costs. The RoW charges usually range from Rs 4 million to Rs 6.5 million per km, and may be as high as Rs 10 million per km in some metros and Category A circles. Fibre cuts are another challenge for operators. As per BSNL, fibre is damaged by road widening projects, thereby resulting in connectivity loss. While the operator has now started laying cable in ring formation to avoid service discontinuation during fibre cuts, areas such as the Northeast have linear roads and, therefore, there are no alternative routes. Airtel maintains five alternative routes in metros, but providing high bandwidth on each of these routes is very expensive.

To address these challenges, the industry expects the government to provide dedicated OFC ducts along the roads. This will allow multiple operators to share these ducts for laying fibre. Entities such as the National Highways Authority of India may consider creating ducts for laying cables while designing road plans.

Another key expectation is the establishment of a single-window clearance mechanism for RoW and related approvals. As per Idea Cellular, seeking multiple clearances and approvals is a major hurdle and there have been instances where the operator had to wait for over three years for rolling out a small optic fibre network.

 The way forward

The Indian telecom sector will witness a data revolution in the near future and the government should ensure that the rural population is an integral part of it. The NOFN and state-level initiatives will go a long way in benefiting rural consumers while providing a major fillip to the OFC industry, given the huge fibre requirements of these projects.


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