Trai recommends PPP model to roll out rural broadband network

Telecom regulator Trai today recommended public private partnership (PPP) model for rolling out broadband network in rural India which has missed various deadlines of completion.

A PPP model that aligns private incentives with long term service delivery in the vein of the Build-Own-OperateTransfer/ Build-Operate-Transfer models of implementation be the preferred means of implementation, said the regulator.

The concessionaire's should be handed over task of deployment and implementation of the optical fibre cable and other network infrastructure as well as operating the network during the period of contract.

The regulator has also suggested that contract period should be of 25 years which can be further extended in block of 10,20 or 30 years.

At present, a special purpose vehicle Bharat Broadband Network limited (BBNl) under telecom ministry is handling roll out of optical fibre network. The project is being executed by BSNl, Railtel and Power Grid.

The UPA government had approved Rs 20,000 crore for laying optical fibre network in 2011 but the project has missed all deadlines.

The present NDA government had fixed this deadline for completing the roll out of optical fibre in a phased manner by December 2016. In January, then telecom secretary Rakesh Garg said that it will be completed by 2018.

The Telecom Regulatory Authority of India has maintained that the national optical fibre network (NOFN) project has failed in achieving its original objectives on increasing broadband subscription in the country.

Trai has also said that the task of rolling out broadband network should be given to a concessionaire selected through reverse bidding process to arrive at fund to be provided for provided by government. The funding should be done to bridge the loss incurred due to higher operational expenses and lower commercial accruals, known as viability gap fund.

Trai has recommended that central and state government should become anchor client of this project to purchase minimum bandwidth of 100 megabit per second at market rate.

To ensure that the concessionaire does not discriminate between service provider in granting access of optical fibres to service providers, Trai has recommended arm's length relationship between concessionaire and service providers, adding that 50 per cent of the optical fibre should be reserved for telecom and cable service providers.

Trai has suggested that government become minority partner of the concessionaire with 26 per cent stake as it will lower cost of obtaining finances for the project as well as solve the risks associated with windfall profits.

"In addition, this can help the Government check monopolistic behaviour on the part of the concessionaire," Trai said.