BharatNet Phase III: Landmark initiative narrowing the digital gap between urban and rural India

Delhi Aug 15, 2024

The past decade in India has been transformative for internet penetration, witnessing an extraordinary increase in the number of broadband users, which reached 850 million by July 2023. This represents a staggering 250% growth since 2015, marking India as the fastest-growing country in terms of internet users globally. Projections suggest that this trend will continue, with data consumption expected to quadruple by 2025, positioning India as the global leader in data consumption within the next five years. A significant driver of this growth has been the Indian government’s “Digital India” program, launched in 2015, which has played a pivotal role in reducing the digital divide between urban and rural areas.

A key component of this initiative is the BharatNet project, aimed at providing high-speed internet connectivity to every gram panchayat across India and enabling millions of rural Indians to access essential online services related to communication, education, and livelihoods. Upon completion, BharatNet will connect over 630,000 inhabited villages, significantly narrowing the digital gap between urban and rural communities and fostering greater inclusivity in India’s digital economy.

Brief about BharatNet Project

The BharatNet Project is a landmark initiative by the Indian government designed to bring high-speed broadband connectivity to rural India. Originally approved by the Union Cabinet on October 25, 2011, as the National Optical Fibre Network (NOFN), the project was rebranded as BharatNet in 2015. Its primary aim is to link all Gram Panchayats (GPs) by connecting block headquarters to these GPs using optical fiber, thus ensuring that broadband access is available to all on a non-discriminatory basis.

BharatNet is crucial in enabling the delivery of digital services such as e-health, e-education, and e-governance in rural and remote areas. To ensure widespread accessibility, the project provides last mile connectivity through public Wi-Fi or other suitable broadband technologies, including FTTH at government institutions like schools, hospitals, post offices, police stations etc.

BharatNet Project phases:

Phase-I: Targeted the connection of 100,000 Gram Panchayats using the existing fibre of Central Public Sector Undertakings (CPSUs) such as BSNL, RailTel and Power Grid and laying incremental fibre to bridge the connectivity gap up to the GPs. The government owns the incremental Optical Fibre Cable and the ownership of the existing fibre vested with the current ownership of respective CPSU’s.

Phase-II: Aimed to extend the network to an additional 150,000 Gram Panchayats, further expanding its reach to more remote regions using multiple implementing models like State- led Model, Private Sector Model and CPSU Model, along with last mile connectivity in GPs through Wi-Fi or any other suitable broadband technology. Certain States like Chhattisgarh, Gujarat, Jharkhand, Andhra Pradesh, Maharashtra, Odisha and Telangana have opted for state led model under which centre provided them a fixed amount for implementation whereas states like Madhya Pradesh, Uttar Pradesh and Sikkim were CPSU led model, which is in the hands of BSNL.

Private led Model States were Punjab and Bihar which have been implemented under private sector model by BBNL which is now a part of BSNL. The satellite component of Phase II is implemented by BBNL and BSNL. BSNL has implemented 1,408 GPs and BBNL 3.753 GPs.

Merger of BBNL with BSNL

The Union Cabinet in the meeting held on 27.07.2022 approved the merger of Bharat Broadband Network Limited (BBNL) with Bharat Sanchar Nigam Limited (BSNL) for expediting the roll-out of BharatNet network across about 6 lakhs villages. BharatNet would continue to be funded by Universal Service Obligation Fund (USOF) and its infrastructure will remain a National asset owned by USOF and accessible on a non-discriminatory basis to all Service Providers. The merger of BBNL with BSNL will provide end-to-end connectivity leading to better uptime and utilization of BharatNet.

The total funding for BharatNet (Phase-I and Phase-II), as approved by the Cabinet, stands at ₹42,068 crores excluding tax. By December 31, 2023, ₹39,825 crores had been disbursed since the project’s inception.

BharatNet Phase-III

BharatNet is expected to progress into its third phase, often referred to as BharatNet Phase III. This phase is anticipated to focus on expanding and strengthening the existing network infrastructure established in Phases I and II. In BharatNet Phase III, the GPs are to be connected on ring network of 8 to 10 GP’s in IP- MPLS network. For this, the government on August 4. 2023 has approved Rs 1.39 lakh crore. The project implementation agency is required to connect all GPs in a ring topology with IP-MPLS aggregation/ access routers with each ring having 8 to 10 GPs. Wherever, the OFC in the existing made- over network is damaged, the PIA will be paid replacement charges at the predefined rates in the bid as per PO for which a separate work order will be issued by BSNL.

New consortiums and game changers

Bharatnet Phase III bid received response from 21 bidders and total 187 bids were received for all 16 packages. The solo bidders include Polycab, HFCL and Sterlite whereas consortium’s formed for the Bharatnet Phase III bid submissions include

The bidders are highly optimistic about the BharatNet-III project opportunity, and believe themselves to be well-positioned to address the tender scope.

The Phase III of Bharatnet project is set to significantly enhance rural broadband infrastructure, providing opportunities for both established telecom service providers and new ISP’s to expand their network in Rural India. The involvement of private players in middle-mile connectivity and local entrepreneurs in last-mile connectivity giving boost to local entrepreneurship in rural areas across the country.