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Rural Reach: Progress in key telecom infrastructure projects

March 18, 2016
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Establishing telecom infrastructure in rural areas continues to be the responsibility of the government, especially as private telecom players encounter several entry barriers. The rough terrain and limited road connectivity of such areas also makes private participation difficult. Thus, the mandate of providing connectivity to rural areas remains with the government. While there has been a lot of growth in the past few years in terms of telecom penetration, a significant amount of potential is still lying untapped in rural areas. Such regions are characterised by low-income populations scattered across vast terrains with limited grid connectivity. According to government data, rural teledensity stood at 50.04 per cent as of November 2015, while urban teledensity was 152.25 per cent. Steady progress is being made through several projects, with the overall intention of connecting 55,669 unconnected villages that are currently without mobile connectivity by March 2019. Under the Digital India initiative, the government is aiming to provide affordable access to broadband and establish information highways.

tele.net takes stock of the government’s various efforts and the progress recorded in the past year for improving connectivity in rural areas… 

BharatNet project

The government’s flagship rural broadband project, the National Optical Fibre Network (NOFN) project, was being minutely assessed over the past year on account of its slow execution. Funded by the Universal Service Obligation (USO) Fund, it aims to provide affordable broadband connectivity with a minimum speed of 100 Mbps to 250,000 gram panchayats across India. It is being implemented by Bharat Broadband Network Limited, while the optical fibre cable (OFC) is being laid by Bharat Sanchar Nigam Limited (BSNL), RailTel and the Power Grid Corporation of India. While the NOFN was to be completed by December 2016, it has faced recurrent delays on account of significant cost revisions and delays in procuring clearances and equipment. Only 50,000 panchayats are likely to be reached by March 2016. As per estimates, the project has had an over threefold cost escalation to Rs 740 billion in the past three years.

In early 2015, the Department of Telecommunications (DoT) constituted an NOFN committee that looked at its shortcomings and challenges while suggesting possible mechanisms under which it could be executed in a time-bound manner. The committee mandated revamping the NOFN as BharatNet, encompassing more rural broadband projects with a broader scope and more private sector involvement. Recently, the Telecom Regulatory Authority of India (TRAI) provided its own set of recommendations on the matter and suggested the implementation of BharatNet under a build-own-operate-transfer (BOOT) model in a public-private partnership. The regulator has recommended that the private company’s role in implementing BharatNet should include the deployment of OFC infrastructure as well as the network’s operations. Under this framework, private entities will be selected through a reverse bidding process to determine the minimum viability gap funding sought for the concession. Meanwhile, the central and state governments will act as anchor clients to purchase a minimum amount of bandwidth (100 Mbps) at market prices for the provision of services. TRAI feels that the BOOT model can remedy the lack of dynamism in traditional public service delivery and enable the inflow of private financing for expanding services.

Within the current framework, the government does not expect the project to meet its deadline. According to a report tabled by the Standing Committee on Information Technology, OFC had been laid in only 32,272 gram panchayats, comprising 76,624 km of fibre, as of December 6, 2015. The government had spent about Rs 30.54 billion towards the project as of October 2015. The involvement of the private sector will reduce the capex burden and encourage innovation, flexibility and better planning for delivering public services.

Progress in the Northeast

The north-eastern region (NER) poses several barriers to setting up telecom infrastructure, limiting the reach of operators. These hurdles include limited access to power, frequent landslides and insurgency-related activity. They lead to frequent service disruptions and delays in carrying out the operations and maintenance essential for telecom services. Keeping this in mind, the government is executing telecom infrastructure projects in the region to serve the twin purposes of extending connectivity and meeting the objectives of Digital India.

In September 2014, the union cabinet had cleared the proposal for implementing a comprehensive telecom development plan for the NER at an estimated cost of Rs 53.36 billion. Under this project, 2G mobile connectivity will be provided to 8,621 unconnected villages and on national highways. While 6,673 towers will be established to cover unconnected villages, 321 telecom towers will be set up on national highways. At present, BSNL is finalising equipment vendors, for which it has opened several tenders. Tower designs under this project will be first approved by organisations like the Structural Engineering Research Centre and the Telecommunication Engineering Centre to ensure their fitness, safety, load-bearing capacity and ability to withstand high wind speeds. According to DoT, this USO Fund-financed project is likely to be completed by September 2017.

Another crucial project in the NER, which was completed in January 2016, is the Agartala international gateway. It was initiated by the government to establish structural links for bandwidth transmission from Bangladesh to meet the NER’s broadband requirements. This project establishes an alternative OFC link in light of the OFC damages that had occurred in Agartala and Guwahati during natural calamities. According to the government, creating an alternative path through Bangladesh will help route traffic from the entire NER to the rest of India. It will also substantially enhance the connectivity as well as reliability of telecom services in the NER.

Under this project, BSNL had signed an MoU with Bangladesh Submarine Cable Company Limited (BSCCL) in June 2015, entailing bandwidth transmission from Cox’s Bazar in Bangladesh to Agartala in India. BSNL will rent internet bandwidth from BSCCL, allowing the latter to earn revenues of up to Rs 82.7 million annually. The required equipment and infrastructure has been set up at an estimated capex of about Rs 191.4 million. The project is currently at the trial and testing stage and the security of the link is being assessed.

Other key projects

Infrastructure for left-wing extremism (LWE)-affected areas: To provide connectivity in LWE-affected areas, BSNL, as per the government’s mandate, is setting up mobile towers across Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Maharashtra, Madhya Pradesh, Odisha, Telangana, Uttar Pradesh and West Bengal. The project’s estimated implementation cost is Rs 35.67 billion. It entails setting up telecom towers at 2,199 locations in LWE-affected areas in the given states. BSNL is procuring the required equipment from VNL Limited and Himachal Futuristic Communications Limited, which had emerged as the lowest bidders in 2014. The project is also being financed by the USO Fund; as of September 2015, 956 towers had been set up. Once completed, the telecom infrastructure will improve connectivity for security agencies and enable them to conduct surveillance operations in LWE-affected regions.

Connectivity to islands: In the past year, the government approved a comprehensive telecom development plan for the Andaman & Nicobar Islands and the Lakshadweep islands, covering a population of about 380,000 people. Telecom connectivity in the region is currently provided through satellite infrastructure, which is not sufficient for meeting the demand for mobile services. The project entails the establishment of OFC connectivity in the islands with a total outlay of Rs 2.21 billion. The first phase will target the laying of submarine OFC from Chennai to Port Blair and to two other islands, Car Nicobar and Little Andaman. In the second phase, submarine OFC will be extended to Havelock and Kamorta. BSNL has been mandated to enhance the region’s satellite network capacity during the project’s execution. Once submarine OFC is in place, satellite infrastructure will be used as a backup medium for communication services.

The way forward

A key realisation gained through the implementation of such projects is of the need for innovations and regular assessments to ensure the timely completion of projects. For instance, TRAI’s BharatNet recommendations suggest increased private sector involvement, coupled with support from state governments. Meanwhile, an international gateway with collaboration from Bangladesh was set up within a record time of six months. Similar innovations are required for wireless services projects as well as they are currently being executed at a slow pace.

Another important aspect in setting up rural telecom infrastructure is the timely disbursement of finances from the USO Fund. According to USO Fund data, a total of Rs 213.3 billion has been allocated, while the total collection stands at Rs 701.2 billion. The efficient utilisation of unallocated funds and regular monitoring of the physical progress of government projects will enable the establishment of rural telecom infrastructure in a time-bound manner. This will help bridge the mobile and digital divide between rural and urban areas.


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