Why NOFN failed to take off

The new government has to ensure that BBNL tightens its belt in meeting deadlines and building credibility

pravin

Pravin Prashant | June 2, 2014



The UPA government had an  ambition of connecting all gram panchayats with optical fibre. On October 25, 2011, it approved setting up of the national optical fiber network (NOFN) to provide connectivity to all 2,50,000 gram panchayats in the country by ensuring broadband connectivity with adequate bandwidth. This was to be achieved by utilising the existing optical fibre cable and extending the existing ones to gram panchayats. Till now, however, only pilot projects in Rajasthan, Andhra Pradesh and Tripura have been completed.

Bharat Broadband Network Limited (BBNL), the nodal wing for NOFN, has completed projects in three blocks covering 58 gram panchayats in Arain in Ajmer district, Parvada in Visakhapatnam and Panisagar in North Tripura district. BBNL’s failure can be judged from the fact that none of the existing operators have shown any interest to work on any applications in these pilot projects.

BBNL has now come up with the new dates for NOFN completion: phase one completion of 1,00,000 villages by December 2014, 1,00,000 additional villages by December 2015 in phase two and 50,000 villages by March 2016 in phase three. Even the new dates of completion of NOFN project by BBNL looks highly impossible since tenders have still not been finalised.

Why did NOFN fail to take off even after five years?

Sustainability is a key issue
The business model of NOFN shifted from being the rural broadband backbone to one that would will help provide services to government departments, thereby mandating that BBNL should itself become the operator.

At present optical fiber cable connectivity is available in all state capitals, districts headquarters and up to the block level. The plan to connect 2,50,000 gram panchayats was to be achieved by utilising these existing fibres of PSUs (BSNL, Railtel and PowerGrid) and laying incremental fibre to connect wherever necessary. The plan was to invest over '20,000 crores from universal service obligation (USO) fund.

A changing business model, however, put a question mark on making BBNL a profitable business as the fund requirement kept on increasing as the project moved forward. This shows the planning failure of the government in making a sustainable business model for rural broadband.       

A changing timeline
The NOFN was initially planned to be completed by December 2012. However, till date, majority of tenders have not been finalised and the project completion date has been postponed by over three years. None of the BBNL officials are willing to give a commitment on the new dates for completion that has been fixed for March 2016. With BBNL not sure about its completion, operators are also making their own plans for providing rural coverage through 3G and 4G towers, including various services in rural areas. Once operators firm up their plan for providing broadband in large villages, it is possible that NOFN becomes redundant as it would remain unutilised in villages.  

So, if BBNL is really serious about the project they have to stick to the new timetable as this will give confidence to existing operators to use NOFN network.
Despite claims by authorities that various ministries – food and civil supplies, education, health, rural development – have come on board, not much seems to have happened on the ground. These ministries are yet to launch any applications within the framework of the pilot projects. Such a step would have helped build operators’ confidence for delivering G2C, B2B, P2P, B2C services. BBNL has to work with these departments and show a set of applications that can be cost-effective and deployed on a large scale.
 

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