Bharat Broadband Network Limited (BBNL) saw a profit of only ₹1.46 crore in 2020-2021, according to the Department of Telecom’s Annual Report 2021-2022 released this week.
The profit for the project, in fact, decreased by 54 per cent as compared to 2019-2020, where the public sector unit reported a profit of ₹3.23 crore. As per the latest TRAI data, BBNL reported an adjusted gross revenue of ₹32.47 crore only between December 2020 and December 2021.
‘Low network usage’
BBNL oversees a Government of India undertaking to connect the entire rural India with high speed internet through optic fiber called BharatNet. Launched in 2011 as the National Optical Fiber Network, the project is expected to be completed by 2025. business Line The Ministry had earlier pointed out that its timely completion appears doubtful as the insurmountable timelines appear, especially due to the lack of coordination between the states.
Experts also told business LineAs per the DoT’s annual report, currently 1.67 lakh gram panchayats are ready for service and 5.5 lakh km of optic fiber cable has been laid. However, experts pointed out business Line That the financial position of BBNL shows that the existing network is also not being utilized.
a recap
To put BBNL’s disappointing profits in context, so far the PSU has invested ₹42,000 crore in the project, while generating ₹1.5 crore of annual profit. BBNL also floated a tender to allow private companies to take over the existing network and provide broadband services. The tender has a financial outlay of another ₹19,000 crore, however, it was canceled in February as there were no bidders.
sources told business LineWhile telecom operators avoided the bidding process, a participating private vendor told business Line That they want the BharatNet project to be audited by third parties so that they can assess its usefulness before they are willing to work on the network.
BBNL has gone back to the drawing board to possibly re-evaluate the viability gap funding to make the project more attractive to private players. Experts believe that the possibility exists that BharatNet becomes a dead network that remains incomplete and is wasting taxpayers’ money.
privatization of road
“It all depends,” said Dr. Jaijit Bhattacharya, president of the Center for Digital Economy Policy Research. “The network can be significantly strengthened. At present, there will be parts of the network that can be used (good network) and that need repair (bad network). The network can be connected to two or more different organizations. who will each dedicatedly take charge of the network, depending on whether they are self-sufficient or not,” he explained.
According to Bhattacharya, those sub-networks that are revenue-generating and self-sustaining can potentially be privatized through an asset recycling route, thereby increasing revenue for the government. The funds can be used to fund OPEX of non-self-perpetuating networks.
Former BSNL executive RK Upadhyay said the onus is on state departments for health and education as well as corporations to use the existing optic fiber. However, experts are of the view that the rural economy does not allow private companies to provide broadband services on the existing network due to weak rural purchasing power.
Published on
18 March 2022