Editorial: BOOTing up broadband

By: |
Published: November 20, 2015 12:23:59 AM

Trai looks to tweak the BharatNet plan

The Telecom Regulatory Authority of India (Trai), in a consultation paper released on Tuesday, has added the Build-Own-Operate-Transfer (BOOT) model for implementing BharatNet—earlier called the National Optic Fibre Network (NOFN)—that is expected to provide broadband connectivity to 2.5 lakh gram panchayats across the country. The NOFN network, supposed to be completed by 2013 at a cost of R20,000 crore, has connected only 3,384 gram panchayats so far. Trai is looking to change that lethargy with the BOOT model, over and above the three models—central PSU, state government and private sector-led—proposed earlier by the DoT. The advantage that BOOT offers is that a private company will design, build, own and operate the infrastructure, along with the right to earn from it for a period of 15-20 years. This model enables private financing for expanding public services and brings in a degree of dynamism to such delivery. In the BOOT model, apart from building the network, the company will look for means to monetise it. Only after the concession period would ownership be transferred to the government, by which time it should be a viable operation. The company that seeks the lowest viability gap funding would implement the project.

While BOOT is a better model than those suggested by DoT, there is one area of worry. If the private party that executes the contract also provides content on the network, it may vertically integrate services and monopolise the market. That could defeat the purpose of providing affordable broadband in rural areas. One way out would be to bring in net neutrality to ensure the network creator offers services from a suite of providers. The government should also insert clauses that ensure the service-provider cannot legally restrict other providers. Now, that the NOFN has failed to take off, BOOT success is critical for the success of the Digital India plan. According to the Broadband Commission set up by the ITU and Unesco, the adoption of a broadband plan, which India already has, could lead to a 2.5% higher fixed broadband penetration and 7.4% higher mobile broadband penetration per year on an average. Broadband expansion is critical for the next phase of India’s growth.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition