New Delhi: The department of telecommunications (DoT) plans to monetize fibre assets built by the government under its flagship mission BharatNet through outright sale to private players or by leasing these assets for a 20-year period after a bidding process. This comes against the backdrop of concerns over poor utilization of digital infrastructure that has been created across more than 100,000 gram panchayats in the country.
The telecom commission on Thursday gave an in-principle approval to hand over these assets to private players. DoT will now work on the modalities of execution of this proposal and submit a report to the commission.
“We have not been able to ensure effective utilization of these assets. The commission decided that DoT must pursue this in all seriousness, as this is a costly asset that has been created. The DoT should also look at outright sale of the fibre as well as a different models of leasing," a senior DoT official present in the meeting said, requesting anonymity.
The Telecom Regulatory Authority of India (Trai) had also urged the government to sell off these fibre assets to private players, Mint had reported on 29 January.
The regulator’s recommendations to auction BharatNet infrastructure on an ‘as is where is’ basis came after a meeting held in December at the prime minister’s office to take stock of the mission.
BharatNet is a flagship mission to connect 250,000 gram panchayats with broadband being implemented by Bharat Broadband Network Ltd (BBNL), a special purpose vehicle set up under DoT in February 2012.
The government has completed laying optical fibre cables across more than 100,000 gram panchayats in the first phase and had aimed to complete connecting the remaining 150,000 councils by March.
However, there have been several delays.
As of 18 February 2018, 313,793km of fibre optic cable had been laid and 117,110 gram panchayats have been connected with fibre and equipment. As such, the target under the second phase is nowhere near completion.
In January, the government removed senior DoT official Sanjay Singh who was the administrator of the Universal Service Obligation Fund (USOF) and chairman-cum-managing director of BBNL. Indian Railway Service officer Sarvesh Singh was appointed chairman and managing director of BBNL in his place. On 14 January, IAS officer Ansuli Arya was appointed USOF administrator.
The administrative changes reflect the government’s concern over the programme’s progress and under-utilization of network, especially ahead of the forthcoming general elections, given that digital connectivity was a key election promise of the government.
Private players would have the appetite to invest in fibre assets, but very few have the finances to buy these assets. Vodafone Idea Ltd, which has announced that it would monetize its fibre assets, incurred a loss of ₹5,004 crore in the December quarter. Bharti Airtel plans to roll out high-speed internet through fibre only in the top 100 cities.
However, Reliance Jio Infocomm Ltd has announced ambitious plans to connect 1,110 cities through fibre. Reliance Jio also proposes to transfer its own fibre and tower businesses to separate companies and enter into arrangements for long-term use of these assets.
The Cellular Operators Association of India (COAI) believes the best scenario would be to create a single entity that holds all network assets and leases it to interested parties.