The Department of Telecommunications (DoT) has shortlisted three business models based on which a national broadband network can be built. The broad outline of these plans include funding operators to expand their data networks to rural India, creating a government-supported special purpose vehicle to roll out this initiative and providing Bharat Sanchar Nigam Limited (BSNL) with a subsidy to build this infrastructure.
The support of the Universal Service Obligation Fund (USOF) is required to successfully implement all three business models.
In December 2010, the Telecom Regulatory Authority of India (TRAI) had said an investment of Rs 600 billion (which would include support from the Centre) is required to build a national broadband network, and proposed that a state-run agency create and run this infrastructure that will connect connect every village with more than 500 people by 2013.
The first model envisages extending support to operators via a bidding process. Here operators that get support to extend their fibre networks must mandatorily share them with other service providers. Under the special purpose vehicle model, incumbents will hold a 49 per cent stake, while the remaining will be held by private operators, where the maximum holding by a single firm is limited to 26 per cent.
With regard to ensuring BSNL carry out the task, the DoT feels that this option is the most optimal in terms of new fibre needed, as BSNL already has a very extensive network. However, BSNL?s past record with respect to carrying out projects is not very encouraging.
