India Earmarks US$400 million for Rural Broadband

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Mar. 4 – The Indian Government is to spend US$400 million over the next three years to enable broadband to reach more than 265,000 rural Indian villages, making the country one of the most densely interconnected populations on the planet.

The formation of a Group of Ministers (GoM) to monitor and review the implementation of this broadband initiative is also being considered. Whether the GoM will invite the private sector to participate in the planning of this initiative and focus on wireless as a means of delivery remains to be seen.

An infrastructure company will be carved out of BSNL to implement the project and work with other PSUs like Power Grid Corporation of India (PGCIL) and RailTel. The venture will be supported financially by the Universal Services Obligations Fund (USOF), which holds a large amount of unutilized resources.

The committee is tasked with creating a roadmap for extending affordable broadband connectivity to all villages by leveraging existing infrastructure and augmenting optical fiber wherever necessary. It is also mandated to pull financial resources from various ministries, including finding ways to subsidize consumer premise equipment using the USOF.

While the plan seems ambitious, the two parts that are missing are private sector participation and using wireless broadband for such connectivity. The work of the committee has been focused on government or government resources despite the fact that the telecom revolution is almost entirely led by the private sector, at least where mobile telephony is concerned. And, despite its limitations, wireless broadband connectivity is a faster and cheaper way to reach unconnected areas.

With 3G spectrum auctions being scheduled this year, the Committee might consider it important to include wireless as an equally important, if not superior, mode for connecting rural India.