Bharat Broadband Network Limited (BBNL) saw a profit of merely ₹1.46 crore in 2020-2021, according to the Department of Telecommunications annual report 2021-2022, released this week.
Profits for the project, in fact, reduced by 54 per cent in comparison to 2019-2020, where the public sector unit reported a profit of ₹3.23 crore. According to TRAI’s latest data, BBNL reported adjusted gross revenue of merely ₹32.47 crore between December 2020 and December 2021.
‘Network under-utilised’
BBNL oversees the Government of India’s undertaking to connect all of rural India with high speed internet through optic fibre called BharatNet. Launched in 2011 as National Optical Fibre Network, the project is expected to be complete by 2025. BusinessLine had reported earlier that its completion on time appears doubtful as insurmountable deadlines appear, especially due to lack of coordination between States.
Experts also told BusinessLineAccording to the DoT’s annual report, at present, 1.67 lakh gram panchayats are service-ready and 5.5 lakh km of optic fibre cable has been laid. However, experts told BusinessLine that BBNL’s financials indicate even the existing network is not being utilised.
A recap
To put BBNL’s dismal profits in context, so far the PSU has invested ₹42,000 crore into the project, while producing ₹1.5 crore of annual profits. BBNL also floated a tender to allow private players to take on the existing network and provide broadband services. The tender has an expected financial outlay of another ₹19,000 crore, however, it was rescinded in February after it saw no bidders.
Sources told BusinessLineWhile telecom operators abstained from the bidding process, a private vendor that participated told BusinessLine that they want a third party audit of the BharatNet project to assess its usability before they are willing to take on the network.
BBNL has gone back to the drawing board, to potentially reassess the viability gap funding to make the project more enticing for private players. Experts believe that the possibility exists wherein BharatNet becomes a dead network that remains incomplete and under-utilised in perpetuity, wasting taxpayer money.
Privatisation route
“It all depends,” said Dr. Jaijit Bhattacharya, President, Centre for Digital Economy Policy Research. “The network can be significantly strengthened. Currently, there will be parts of the network which can be used (good network) and those that need to be repaired (bad network). The network can be put under two or more different organisations, which will each dedicatedly take charge of the networks, based on whether or not they are self-sustaining,” he explained.
According to Bhattacharya, those sub-networks that are revenue generating and self-sustaining can potentially be privatised through an asset recycling route, thus leading to enhanced revenues for the government. The money can be used to fund the opex of the non-self-sustaining networks.
Former BSNL executive, RK Upadhyay, said the onus is also on the State departments for healthcare and education as well as corporations to utilise the existing optic fibre. Experts, however, believe rural economics do not allow for private players to provide broadband services on the existing network due to poor rural purchasing capacity.
Published on
March 18, 2022
