Trai shows the expressway to broadbanding India

By: |
March 2, 2016 12:25 AM

BharatNet as the prime engine of Digital India can be a potential GDP multiplier—it can add between $36 billion and $72 billion to India’s GDP in the coming years

We have two excellent sets of detailed recommendations by Trai in 2015 and 2016, and clear guidelines for implementing them efficiently and delivering broadband expeditiously.We have two excellent sets of detailed recommendations by Trai in 2015 and 2016, and clear guidelines for implementing them efficiently and delivering broadband expeditiously.

It is pertinent to remind ourselves that “like electricity a century ago, broadband will be the foundation of economic growth, job creation, global competitiveness and a better way of life,” (Trai, April 17, 2015). Unfortunately, despite years of discussion, we are only slipping compared to other nations. In the ITU 2014 State of Broadband Report, India is ranked 142 out of 166 nations with respect to internet usage, way below even Sri Lanka and Bhutan. We are placed in the distinctive class of 42 least connected countries, with 11 countries from Africa ranked higher than us. The need to improve data usage and broadband is, obviously, urgent. Understanding Trai’s recommendations on the matter is, therefore, of paramount importance to all of us.

Fibre, a fundamental need: Despite the importance of wireless and notwithstanding the availability of adequate and robust mobile networks, sustainability in broadband and telecom is not possible without enough optic fibre all over the country. India is at tremendous disadvantage compared to modern digital regimes of the US, Europe, China, etc.

If not remedied quickly, this handicap could become an increasingly formidable challenge for the achievement of Broadband for All and Digital India, initiatives since these demand tremendous data back-haul capacity, far beyond the limits of most microwave solutions. Only E-Band spectrum or ‘wireless fibre’ can serve some important niche applications.

NOFN is a non-starter: In 2011, the government had sanctioned the National Optical Fibre Network (NOFN) project and a budget of Rs 20,000 crore to achieve it. However, NOFN was dogged by bad luck as well as ineffective design and poor implementation, right from the start. After four years of little progress against relaxed deadlines, instead of burying the basic fibre in the ground, NOFN was ironically given a quiet burial around mid-2015. This had been preceded by an excellent set of Trai recommendations in April 2015 for Delivering Broadband Quickly through much revamping and a more holistic approach. Trai now has launched a comprehensive Consultation Process for Implementation of BharatNet, the new name of NOFN.

Comprehensive consultations and recommendations, 2015-16: Against the background of its own recommendations of April 2015 and the DoT Expert Committee Review of NOFN, Trai launched its next exercise and innovated an effective methodology for implementation consultations. It first had a couple of rounds of in-depth consultations with subject matter experts from academia, research institutions, industry and specialist consultancies, followed by an exhaustive open house discussion, before coming out, on February 1, 2016, with its final set of recommendations for implementation of BharatNet. It is rare that regulatory recommendations are equally acceptable to all stakeholders. However, this time, there is all-round acceptance that the measures suggested by Trai would give Project BharatNet a boost and help achieve Broadband for All.

Huge revenue upside: If Trai recommendations are implemented, the revenue potential from broadband services by 2020 could be in the range of R1 lakh crore. The revenue potential could even breach these estimates given the huge potential that these services have to offer for India.

Broadband revenue will depend on availability of content (especially vernacular), availability of affordable handsets, and friendly government regulations and policies. In fact, BharatNet as the prime engine of Digital India can be a potential GDP multiplier, equivalent to up to 2-4 times the $18 billion that is proposed to be invested in Digital India—it can add between $36 billion and $72 billion to India’s GDP in the coming years.

Government ownership, a strategic essential: The key to success would be the Trai-recommended BOOT model with involvement of the private sector for deployment and operations. But experts are of the view that, for strategic reasons, ownership/funding must remain predominantly with the government. Such an ownership structure is essential to ensure open, non-discriminatory access to all operators. Moreover, given the size and complexity of the project along with associated capital risks, it may not be prudent to consider handing over the ownership to private sector.

Key recommendations: Trai has rightly stressed that RoW (Right of Way) must be provided free of cost by all states to the executing agency. This is the most fundamental requirement not only for this project, but also for OFC-laying anywhere.

Many (as many as 14) Trai recommendations are in complete congruence with stakeholders’ suggestions.
* Concessionaire period of operation/agreement be kept as 25 years, co-terminus with the life of the optical fibre. This would give the operator sufficient incentive to recover the costs sunk into the project. Also, extension of lease/agreement for a further period in blocks of 10/20/30 years, subject to mutual agreement;
* Involvement of government (Centre/states) as an equity partner in the consortium, as it will help in getting faster government clearances, resolve the risk of monopolistic behaviour while also automatically solving the risks associated with windfall profits;
* Flexibility in terms of route for laying optical fibre, and the choice of construction, topology and technology to be allowed to the bidder/executing agency;
* Selection of bidder based on the minimum viability gap funding (VGF) sought and to align the service area as the licensed service area or the state/circle itself;
* Incentives to private operators for early achievements against pre-defined milestones;
* Inbuilt measures to ensure access is provided to all service providers in a non-discriminatory and transparent manner;
* Regulation of wholesale pricing by Trai to safeguard against anti-competitive behaviour and to ensure affordability;
* Liberal eligibility criteria to allow maximum participation of bidders.

Trai is to be commended for seriously considering stakeholders’ suggestions regarding alternate technology options, such as satellite communication for expediting the rollout of the project. However, keeping in view NOFN expert committee suggestions and that the prevailing regulatory environment does not encourage for smooth and efficient deployment of latest Satcom technologies, the choice of alternate technologies was left to the implementing agency.

It is heartening to hear that DoT is now considering connecting 6,000 remote and difficult-to-access gram panchayats of the Northeast and Jammu & Kashmir. If this comes true, it would be a historic step towards the achievement of inclusive broadband.

In the digital world of today, as Bernard Shaw might have put it, “the greatest of evils and the worst of crimes is poverty of bandwidth and broadband.” We are potentially at the cusp of a great transformation. We not only have two excellent sets of detailed recommendations by Trai in 2015 and 2016, but also clear guidelines for implementing them efficiently and delivering broadband expeditiously. What more could one ask for?

There is a tide in our broadband affairs, which, if taken at the flood, will surely lead to fortune, but if we miss it again, all possible inclusive growth could be mired in shallows and miseries.

The author is president, Broadband India Forum, and chairman, Telecom Council of the European Business Group. Views are personal

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