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BW Businessworld

Connecting The DoTs

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The Telecom Commission on Friday approved Rs 30,000-crore National Optical Fibre Network (NOFN) for broadband connectivity to 2,500 Panchayats in the country.

A meeting that was held a few hours ago has approved the proposal that was initiated early this year. A study by the Confederation of Indian Industry (CII), says India will need more than Rs 40,000 crore investments to build a broadband infrastructure to provide 214 million broadband connections by 2014, which is likely to touch 700 million.

The Department of Telecommunication (DoT) had identified three business models to build a national broadband network to take high-speed Internet to rural areas.

According to sources, the government is likely to fund existing operators to expand their data networks to rural India. A special purpose vehicle is to be set up by the government. Under the special purpose vehicle model, BSNL and MTNL are likely to hold 49 per cent private companies holding 51 per cent. Within this 51 per cent holding, a private company (individually) can hold a maximum of 26 per cent stake.

As per the proposal discussed at the meeting, Bharat Sanchar Nigam Ltd will build NOFN. The Rs 30,000 crore is to be funded through the Universal Service Obligation Fund. The Universal Service Obligation Fund was created to fund those operators who go into the rural and non-remunerative areas to offer telecom network. Private telecom companies contribute 5 per cent of their annual revenues towards this fund.

Sam Pitroda, Adviser to the Prime Minister of India on Public Information Infrastructure and Innovations, said: "This kind of broadband network can add 1-2 per cent to our GDP."

This would also help in connecting the innovation that happen in institutes situated in far flung corners of the country. Describing the building of this network as a complex task, Pitroda said, "It is now achievable."

The government is also likely to involve the Centre for Development of Telematics, RailTel, PGCIL Tel and GailTel in building this NOFN. The 2,500 Panchayats will be connected to monitor the various government schemes including the allotment of ‘Aadhar' the UID numbers.

Sources in DoT said, 33 new major applications will be built using the open source code. These applications will use NOFN to connect rural areas with educational institutions, health service and central government services.

R. Chandrashekhar, secretary DoT told BW, "We see these kinds of services, expanding, the demand for broadband; they become the chief drivers of demand for fixed line."