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Closing the Digital Distance: USO Fund helps extend rural coverage

June 13, 2014
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The Universal Service Obligation (USO) Fund, established over a decade ago, has been instrumental in facilitating the provision of telecom services in rural and remote areas in India. In the telecom infrastructure space, the USO Fund’s mobile shared infrastructure scheme is a key project, which has resulted in the installation of telecom towers even in the remotest parts of the country. The scheme required operators to set up tower infrastructure in rural areas and encouraged sharing of a single tower site by up to three operators. So far, a total of 7,350 towers and over 16,000 base transceiver stations have been installed under the scheme.

Further, some critical projects to enhance mobile coverage in left-wing extremist (LWE) areas and the north-eastern region are also on the anvil. The USO Fund is undertaking a project in LWE areas that entails rolling out 2,200 towers, of which about 1,600 will be greenfield and the remaining will be provided by Bharat Sanchar Nigam Limited (BSNL). Further, the USO Fund, along with Telecom Consultants of India Limited, has prepared a detailed project report (DPR) to extend mobile coverage in inhospitable areas in the north-eastern region. A similar project for far-flung areas in the rest of the country has also been proposed and the Centre for Development of Telematics has been entrusted with the task of preparing the DPRs.

Evolving broadband ecosystem

As urban markets record a growing adoption of data services, the USO Fund is committed to bringing about the same transformation in rural areas. Five “Cs” have been identified as crucial to driving the uptake of data services in rural areas. These are connectivity; content, in terms of relevance and localisation; competitive tariffs; cost of devices, in terms of affordability and suitability; and computer literacy. Further, addressing challenges related to low power availability and high energy consumption at tower sites, low private investments in rural broadband infrastructure and limited channels to access broadband services is imperative. To this end, the government is undertaking the National Optical Fibre Network (NOFN) project to provide broadband connectivity to all gram panchayats in the country. Announced in 2011, it is a landmark project as its implementation will open up a host of opportunities for rural users in the fields of e-health, e-education, e-governance and e-commerce.

NOFN update and progress

The $4 billion NOFN project is being funded through the USO Fund and is being implemented by Bharat Broadband Network Limited, a special purpose vehicle of the Government of India. The primary objective of the project is to bridge the connectivity gap up to the aggregation layer across 250,000 village councils. In order to avoid duplication, the existing fibres and core network will be leveraged by leasing these from operators while an incremental cable of about 500,000 km will be rolled out. Further, gigabit passive optical network technology will be used to offer 100 Mbps connectivity at each gram panchayat.

Three pilot projects covering 60 gram panchayats across Rajasthan, Tripura and Andhra Pradesh were completed in October 2012 to understand implementation issues and derive key learnings for scalability. However, the project, originally envisaged to conclude by December 2013, is still under implementation. The companies entrusted with the task of laying fibre – BSNL, Power Grid Corporation of India Limited (Powergrid) and RailTel – have faced significant execution challenges in rolling out such a huge quantity of fibre cable within the stipulated time. For instance, BSNL, which has the largest fibre network in the country, has an execution capacity of laying up to 60,000 km of fibre per annum. However, the NOFN requires it to roll out about 300,000 km of incremental cable within two years.

As a result, the government has revised the timelines for project completion and plans to do so in three phases. Under Phase I, the roll-out will be completed in 100,000 gram panchayats by end-March 2015. Another 100,000 gram panchayats will be covered by end-March 2016 and the remaining by end-December 2016.

To further enhance the scope of the NOFN project, an overlay in the form of a government user network has been proposed, to provide community Wi-Fi service, 10 Mbps connectivity to deliver e-panchayat services and 10 Mbps connectivity to a school and a dispensary (or anganwadi) to promote e-education and e-health in every gram panchayat.

The NOFN is making steady progress. Right-of-way (RoW) agreements have been signed with all the states and union territories (UTs) except Tamil Nadu and Lakshadweep. Surveys have been completed in about 70 per cent of gram panchayats and tenders are in the process of being issued and finalised.

While private participation in the pilot projects was limited, the NOFN offers opportunities in the areas of dark fibre leasing (between districts and blocks), equipment supply, internet bandwidth provisioning as well as operations and maintenance of networks post-implementation.

The way forward

The USO Fund’s contribution in extending the telecom success witnessed in urban India to the country’s hinterlands has been noteworthy. Going forward, the successful and timely implementation of the NOFN project will help significantly in bridging the digital divide in the country.

Based on an address by Ravi Shankar, Administrator, USO Fund, and a presentation by A.K. Bhargava, Director, Operations, BBNL at tele.net’s Eighth Annual Conference on Telecom Infrastructure in India on April 29-30, 2014 at The Leela Ambience, Gurgaon

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