Universal Services Obligation Fund (USOF) that funds the National Optic Fibre Network (NOFN) project, has informed telecom minister Ravi Shankar Prasad that the broadband coverage target for 2014-15 “will be halved”, reports The Economic Times.

A senior official from USOF told the publication that BSNL, RailTel and PowerGrid had bagged the contracts for cable laying and trenching had informed the fund that the project. They will only be able to cover 50,000 villages by next year, as opposed to the targeted 100,000 villages. Interestingly, in an agreement (pdf) made with Bharat Broadband Network Limited earlier this year, USOF says that the target was to reach 250,000 gram panchayats by 2013. This could however be a part of the government’s plans to set up WiFi hotspots in those many villages.


Annual collection of Universal Access Levy(UAL) vis-a-vis Allocation of subsidy by USOF (Rupees in Crores)

USOF was set up to finance the operation and maintenance of village public telephones, to provision household telephones in rural and remote areas, to create infrastructure to popularise use of mobile services in remote areas and to create broadband connectivity in rural areas. In 12 years, it has allocated Rs 17947.85 crore for various projects and still has Rs 33682.85 crore that can be allocated for future projects and for fulfilment of existing plans in the future.

It is not clear as to how much the project cost go up by, following this delay. It is not clear by how much the costs of the project will go up following the current delay. Telecom Commission, had approved the Rs 20,000 crore for creating NOFN in 2011, to provide broadband services across the villages in India in three years. Under this scheme, the existing optical fiber network would be extended to the Gram Panchayat level. It had set up a High Level Committee (HLC) for creation and implementation of NOFN. A Special Purpose Vehicle (SPV) owned by the Government/USOF, was also set up to carry out the execution of the project. An advisory body was also established to advise on the implementation issues and non-discriminatory access of NOFN to service providers.

USOF now expects the three-phase broadband coverage plan to be concluded only by March 2017. Further delays in the over Rs 2o,000-crore NOFN rollout will derail the government’s pan-India broadband penetration target of 175 million and 600 million subscribers by 2017 and 2020, respectively. At present, India has only 15 million broadband customers. This news comes at a time when the Department of Telecom is trying to make Broadband Internet a basic right for everyone living in India.

When the project was launched, the government had expected the scheme to reduce the migration of rural people to urban areas. It was expected to boost employment, while facilitating online initiatives such as e-health, e-banking, e-education, e-health, and e-agriculture among others. Remember that common service centers have been introduced in rural areas, with connectivity from BSNL, but it isn’t just connectivity that is required to ensure that CSCs work: availability of power is a significant consideration as well. The lack of reliable power supply is the reason why most cellular towers in India work on diesel.