Cabinet gives nod to set up special purpose vehicle for broadband network roll-out

Our Bureau New Delhi | Updated on March 12, 2018


Mr R. Chandrashekhar, Secretary, Department of Telecom.

The Union Cabinet today approved a scheme to set up a National Optical Fibre Network (NOFN), which will be used to provide broadband connectivity to village-level bodies — Panchayats.

The project cost is expected to be “of the order of Rs 20,000 crore”. A special purpose vehicle (SPV) will be formed to execute the network.

“Immediately, the equity in SPV will be from the Government,” Mr R. Chandrashekhar, Secretary, Department of Telecom (DoT), said. Subsequently, he said, BSNL, Railtel, PGCIL and GAIL are likely to be roped in as equity partners.

“The details are being worked out. The funding for the project will be done through Universal Service Obligation (USO) fund. The USO fund accruals over the next two-three years will cover the finances,” he said.

“At present, the optical fibre cables reach the block headquarters mostly. Now they will reach the Panchayat level…. The incremental layout will be done through the SPV.”

The Government has set a target to complete the roll-out in about two years. The SPV will get revenues by charging its customers access charges according to the TRAI guidelines.

The key requirement is to get the right of way (RoW) from the State Governments as they have varying rules and charges for providing it. “We will have tripartite agreements between the executing agency, State Government and the Department of Telecom. The State Governments are expected to contribute by providing free RoW,” Mr Chandrashekhar said.

Published on October 25, 2011

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