BSNL clicks on rural broadband project

India’s plan to cover all its six lakh villages with broadband connectivity in the next three years has kick-started with public sector Bharat Sanchar Nigam (BSNL) shortlisting equipment vendors for the first phase of its share in the Rs 4,000-crore project, official sources said.

Siemens, Ericsson and ZTE have been shortlisted for the BSNL contract that involves providing high-speed Internet connection to 20,000 villages, the sources said. This phase of the BSNL project has already got a funding of Rs 170 crore from the Department of Information Technology (DIT).

For the second phase, BSNL will get Rs 160 crore assistance to cover 40,000 villages. “These villages are part of 1,000 blocks where BSNL is the only service provider and the rollout is expected to be completed by June next year,” department of telecom (DoT) sources added.

DoT has finalised a five-phase strategy to provide broadband to all the villages using the Universal Service Obligation Fund (UFOs). BSNL will cover about a tenth of the project, around 60,000 villages.

Private telecom operators will be chosen to cover the rest of the villages, DoT sources added. The winner will be decided on the basis of the least subsidy sought through a bidding process. The government is dipping into the UFOS to subsidise the projects.

UFOS is working out a scheme for providing assistance to private operators. “The financial assistance will be by way of subsidy for broadband active infrastructure like base stations. Operators will also be expected to utilise their existing passive infrastructure for the purpose,” said sources.

DoT is looking at providing broadband, with a minimum speed of 512 KBEs, within a 10-km radius of all block headquarters. It will connect community centres, health centres, primary schools, panchayats and police stations to block headquarters.

Subscriptions will be provided free to the villagers. The move is aimed at utilising the huge amount of USO Fund, which stood at Rs 9,194.12 crore at March end. Telecom operators pay 5% of their adjusted gross revenues towards the UFOS, used to provide telecom services in rural areas.

India aims to have 6.5 million broadband connections this year and 20 million by 2010. Rural rollout will be crucial in meeting these targets.

The third phase of the project will cover two lakh villages by June 2008 while the fourth phase will cover three lakh villages with wireless broadband the next year. The remaining 40,000 villages will have broadband in the last phase in 2010.

UFOS has initiated preliminary discussions with operators and technology providers to formalise the modalities of tender procedures, technology selection and benchmark settings.

However, internet service providers (ISPs) have been kept out of these discussions. “This is despite the fact that many small ISPs currently provide broadband and internet connections in villages. It is unfair to ISPs,” said an official at the Internet Service Providers Association of India (ISPAI).

Last year, the communications ministry received the Cabinet nod for extending the UFOS for the provision of mobile services. It had earlier been used only for basic telephony. The government has already awarded contracts to service providers for setting up about 8,000 telecom towers across India.