The Government will set up a Special Purpose Vehicle called Bharat Broadband Network Ltd for implementing the Rs 20,000-crore national optical fibre cable network project. The SPV will be initially funded by the Government and then private players may be allowed to pick stake.
The National Optical Fibre Network (NOFN) aims to connect 2.5 lakh gram panchayats across the country.
According to an internal Government document, the network will be operational by November 2013. Public sector companies, which have optical fibre cable infrastructure, including Bharat Sanchar Nigam Ltd, RailTel and Power Grid, will play a crucial role in this project.
The existing cable network owned by these players will be pooled in for the project in addition to the new links that will be rolled out by the SPV.
The idea of setting up an SPV was mooted by Finance Ministry. The DoT was earlier insisting on appointing Bharat Sanchar Nigam Ltd as the agency for executing the project because the PSU has over 6 lakh route km of optical fibre, the largest among all operators.
The telecom regulator had also cautioned the DoT against giving the mandate to BSNL on grounds that it could disturb the level-playing field.
A committee headed by Mr Sam Pitroda, Advisor to the Prime Minister, had also suggested setting up an SPV comprising Central public sector undertakings, which already own optical fibre cable. The SPV will have the option to raise money from public. The DoT will decide on these issues once the cable is rolled out.
The SPV will carry out mapping of the present cable infrastructure and fix the project cost. All of the project cost will be met through the USO fund, which has Rs 18,000 crore and is expected to grow up to Rs 36,000 crore in three years