What’s preventing private players from entering BhartNet fray in India?

What’s preventing telecoms from entering BharatNet fray in India?

By Nandita Singh

BENGALURU: Competition is strong in India.  But perceptions of low or no rural demand are partly responsible for low traction on connectivity.  If demand is low, revenues are likely to be low.  The business case gets further weakened, if costs in currently unconnected areas are high. It is reasonable to assume that the connectivity to all of India’s villages, towns and cities through broadband will be achieved by competition among private operators.

LIRNEasia, an ICT think tank active in Asia Pacific region, in 2016 conducted a first of its kind study to assess the institutional users with respect to BharatNet. Methodology involved selecting 24 Gram Panchayats using systematic random sampling in Arian (16) and Paravda, Vizag (8) and respondents were from state government, central government, private and non-governmental and semi-governmental organizations. Computer assisted in-depth interviews were conducted in person. 1,329 decision makers were interviewed in Jan-Feb 2016. The questionnaire covered organization profile, Internet usage, triggers and barriers towards Internet usage, and awareness of technologies and BharatNet. The field-work was undertaken by Nielsen India during Oct 2016 – Jan 2017.

According to Rohan Samarajiva, founding CEO & Chair, LIRNEasia, Internet connectivity has to be thought of as a chain.  The chain is as strong as the weakest link. One high-cost, and therefore weak, element is the “middle-mile,” or the link between the village and the metro center.  The middle mile to some rural areas is simply missing for some or all private operators do not see a business case for investing in it.  The original design of BharatNet, earlier known as NOFN, sought to fill this gap.

Samarajiva  elaborates, “All the government’s energy was absorbed by just the laying of the fiber cables through the possibly dysfunctional special purpose vehicle made up of government organizations.  Little effort was put into providing clarity and assurances about the terms of access to the BharatNet cables.  Without certainty about terms of access including prices and reliability, no private operators expressed any interest in using the government-built cables.  LIRNEasia research conducted in pilot localities in Rajasthan and Andhra showed forlorn cable termination points in Gram Panchayat premises.”

Samarajiva, further states that so far, the response of Delhi-based officials was to stay within their comfort zone and seek to persuade government entities to use the capacity.  LIRNEasia surveys of government officials in the pilot areas where awareness should have been highest showed that most were unaware of the potential of BharatNet.

The solution is to focus on the private sector and on competition in the last mile.  First, the terms and conditions of access to the BharatNet middle mile must be worked up in the form of legal documents in consultation with potential users.  “Answers to questions such as: Who do we talk to when the link breaks? What priority do our maintenance requests receive? And what assurance of service quality is offered? must be given,”  he says.  The prices should cover only operational costs since the capital costs have been borne by Universal Service Obligation Fund.  Surveys should be conducted in the villages to document the existing demand at various price points and the results made available to private operators.

Even after all this, if the existing operators drag their feet, specialized entities should be invited to bid to provide last-mile services in non- or under-served rural areas as resellers, with the door kept open for full licenses based on performance.

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