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BSNL to install 25K WiFi hotspots in rural areas with USOF subsidy

State-owned telco BSNL will install 25,000 new WiFi hotspots across rural areas in the country through financial support from Universal Services Obligation Fund (USOF)—a government owned fund that that is exclusively meant for subsidizing telecom services, reports Economic Times. The entire project is expected to go live within the next six months.

BSNL is eligible to secure funds of up to Rs 940 crore, which will be disbursed over a three-year period. In the first year, USOF will cover 100% cost incurred by BSNL for its WiFi project; in the second year USOF will cover 75% cost and another 50% in the third year. Note that BSNL had received Rs 1250 crore in subsidy funds from USOF in September last year for its rural broadband service.

However, the new funds from USOF are in contravention of the Cabinet’s stance: it had said last year that the Rs 1,250 crore subsidy would be “the last and final payment and no further request from BSNL for financial/subsidy support from USOF on this count shall be considered.” USOF had disbursed a total of Rs 8,629 crore as subsidy to BSNL for providing cheap rural wireline and broadband connection since April 1, 2002. These funds were released between April 2002 to July 2012, based on TRAI’s recommendations.

BSNL has also found other ways to make WiFi rollout cheaper for itself.  It outsourced a Rs 1,000 crore WiFi deployment contract to a consortium of companies led by Larsen & Toubro in February. The contract was for installing 35,000 WiFi hotspots in the country by March 2018. BSNL is also making money by leasing bandwidth to Facebook’s Express WiFi project.

Other BSNL WiFi projects

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In India, BSNL has been installing its own WiFi hotspots in various locations, including at tourist destinations, and more hotspots in 40,000 locations around the country to make up for the lack of its own 4G services. It recently deployed 3,000 WiFi hotspots in Assam, and in October last year, it had signed a deal with the Union Tourism Ministry to equip 100 tourist destinations with high-speed public hotspots. In the same month, the telco said that it would install WiFi at 10,000 government owned schools in Kerala. Apart from this BSNL tied up with Tata Communications to allow BSNL users travelling abroad to connect with over 44 million WiFi hotspots around the world, managed by Tata.

Note that BSNL is also part of BharatNet, a government-owned fiber project that aims to connect 1 lakh gram panchayats by 2018. BSNL will use its own fiber backhaul and tap on BharatNet’s cable network reach for its WiFi hotspots.

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