Broadband-internet-solutions

The Telecom Regulatory Authority of India (TRAI) consultation paper (pdf) for the implementation of BharatNet is looking for participation from the private sector where companies can build, own, generate income from the optical fibre network for some time before transferring it back into public ownership.

This is in addition to the three implementation models proposed by the DoT in April (pdf), after noting that the implementation of NOFN was not moving as per plans. At the time, the DoT also recommended rechristening the project to BharatNet.

The TRAI’s consultation paper takes a look at some of the issues with DoT’s implementation models and outlines the Build-Own-Operate-Transfer (BOOT) model, wherein the Government will make an agreement with a private companies and provide it with the right to earn income from the facility for ~10 years. In the BOOT model the Government is not directly involved in the day to day implementation issues of the projects, but subsidizes a company to upgrade its own infrastructure or build new one.

The consultation paper can be downloaded here and comments can be submitted by December 7, 2015 via email to tokapilhanda@trai.gov.in.

 

Advantages of BOOT: This model lessens the risk for the government and makes the contracts simpler since the entire project and its costs are handled by a single agency. It also means that the agency deploying the project is incentivized via the right to earn income to promote the project and keep it running smoothly.

This method also has certain shortcomings such as lack of interest in investing in rural areas by private firms and the risk of network monopolization by private companies. However, the paper mentions that an appropriate regulatory framework towards access control, price control and transparency can be put in place to address these issues.

Also read: BSNL ups broadband speed to 2 mbps

Other models: In contrast, three models suggested in the DoT report suggest that networks are to be built/owned/operated by different entities and once the infrastructure is created, the Government will auction dark fibres to TSPs/MSOs/ISPs. These three models are:

– CPSU (Central Public Sector Undertaking) led, where agencies like BSNL would be responsible for the project.

– State Government led, where the state government would manage and operate the network.

– Private Sector led, where private companies would build and maintain the project while the Government would auction the infrastructure.

The major shortcomings of these methods of implementation are that since the network is built by different parties and auctioned off to others, the agency laying the fibre will have no incentive to complete the project in time. Additionally, since this agency will neither provide the service directly or market it, there is no incentive to ensure quality.

Consultation paper on broadband penetration: In September last year, the TRAI had released a consultation paper to discuss the reasons for the poor broadband penetration in India. The issues covered included whether PSUs like BSNL, RailTel and PowerGrid were ideal choices to implement the ambitious National Optical Fibre Network (NOFN) project that was already lagging behind schedule. Other issues addressed the Right of Way (RoW) as a major constraint, uneven broadband rollout and promoting broadband through cable TV networks.

MediaNama’s take: The NOFN project has pretty much been in limbo. Since its launch in 2011, the ambitious project which aimed to cover 250,000 villages in 3 years, only managed to pilot in Idukki in January this year. The BOOT model does seem better than the other models suggested by the DoT, but that the Government is still deciding on implementation shows that just how far behind the project is. We feel like close to 5 years should have been more than enough to have decided on issues like these, “The sizing of Optical Fibre i.e. 24/48/96 core needs to be finalized based on requirement and carrying out a cost-benefit analysis.”

Update: Post updated for brevity.