What is the distinct factor that is causing delay in implementation of the NOFN project? It may be zeroed in to the bureaucratic entanglement, with rampant red tapeism, India's Achilles' heel, in this case, Right of Way (RoW).

Cost estimates skyrocketed, in response the government sanctioned additional funds. The expert panel of Telecom Regulatory Authority of India was invited to mastermind the project. BBNL, a special purpose vehicle, was set up. The three PSUs - BSNL, RailTel, and PGCIL - armed with their respective vast optical fiber network, were invited to pitch in and entrusted with the task of laying incremental fiber. States that desired to float their own corporations, and lay their own OFC network were given permission. The government on its part mobilized its vast machinery to set up an enviable, highly scalable, network infrastructure, accessible on a nondiscriminatory basis, to provide on-demand, affordable broadband connectivity of 2 to 20 Mbps for all households and on-demand capacity to all institutions. No effort has been spared for BharatNet, a network, bridging the connectivity gap between gram panchayats (GPs) and blocks, thus connecting all the people of this vast country, Bharat.

 

Yet recently, when reporting progress of the project in the Rajya Sabha, the minister of communications and IT, Ravi Shankar Prasad, admitted that by March 2016, optical fiber pipes had been laid only in 53,584 GPs and cables in 42,892 GPs. Around 57,000 GPs remain where OFC is still to be laid in less than 10 months to meet the target of connecting 1 lakh GPs by December 2016.

In December 2015, the situation had been worse. BSNL had laid 37,822 km of OFC accounting for 22 percent of its target, PGCIL laid 3110 km of fiber cable accounting for 14 percent of its target. RailTel on the other hand had laid only 1717 km of OFC accounting for just 8 percent of its target. Railtel raised it to 6152 km at a pace of around 500 km per month by March 2016. To meet the target, it will need to lay 8000 km of duct over the next eight months, which means 1000 km per month and 400 km of OFC per week.

Moving forward, the three PSUs are confident of meeting the December 2016 deadline. The consensus is that hurdles have been streamlined and it is an exercise of mere logistics now.

The biggest relief is in the recently formulated Indian Telegraph Right of Way Rules, 2016, which promise a single-window clearance system in a transparent and time-bound manner and also assure levy of only reinstatement charges in case of underground telecom infrastructure and deemed permission, if the application is neither accepted nor rejected within 60 days.

Progress So Far

BSNL. The project is to use the existing OFC of BSNL, which is ready up to 6500 odd blocks. Only the incremental fiber, averaging around 2.4 km per GP, is planned to be laid. Recently, BSNL has launched the special unlimited fiber broadband (FTTH) plan - Fibro ULD 7225_GP-NOFN - exclusive for all GPs under the BharatNet project. BSNL will be offering 10 Mbps true unlimited fiber broadband without any FUP limit to all GPs. Customers will get flat 10 Mbps download speed all the time irrespective of their usage.

Presently, under Phase-I, all GPs in the states of Kerala, Puducherry, Chandigarh, and three-fourth of Karnataka have been connected electronically and optically.

The optical line termination (OLT) of BBNL has been installed at BSNL premises. A fiber distribution management system (FDMS) has been installed by BBNL at each location to terminate fiber coming from the GPs and service providers from the core/backbone sides. Further, core fiber will be connected to NOFN fiber or OLTs to access and bandwidth created under NOFN. Access to OLT is available to all interested SPs on a non-discriminatory basis. There is no charge for termination of OFCs to FDMS.

BSNL has initiated the process to leverage the NOFN by offering services in the GPs. It has further strengthened core network capabilities and bandwidth by installing 400/120 Gbps DWDM or 2.5 Gbps SDH systems connecting to respective districts and beyond. These core building works are also available to interested service providers on competitive tariff and on commercial basis.

BSNL is encouraging participation of other service providers, by offering core bandwidth from NOFN upwards in any part of the country, so that NOFN can be utilized with bouquet of all possible services under Digital India program.

Three pilot projects have also been completed to cover 59 GPs of Arain block in Ajmer district (Rajasthan), Panisagar block in North Tripura District (Tripura), and Paravada block in Vishakhapatnam district (Andhra Pradesh).

RailTel. The scope of work for RailTel includes 120 districts, 959 blocks and 36,047 GPs in 11 states, including Gujarat, Daman and Diu, Dadra and Nagar Haveli in the West, Tamil Nadu and Puducherry in the South, and Meghalaya, Mizoram, Tripura, Arunachal Pradesh, Manipur, and Nagaland in the North-East. RailTel is implementing Phase-I of the project in Gujarat to connect 5315 GPs of 11 districts, by laying approximately 10071 km of OFC.

RailTel is connecting block headquarters with GPs, by utilizing the already laid existing OFC of PSUs (BSNL, PGCIL, and RailTel) and then laying incremental OFC, where PSU OFC does not exist. The block-wise survey work for NOFN project has been approved by BBNL to ensure best possible utilization of existing OFC of PSUs and minimum laying of incremental OFC.

PGCIL. Powergrid was allotted four states, Andhra Pradesh, Himachal Pradesh, Jharkhand, and Orissa, covering about 35,791 GPs on deposit-work basis. The work is to be carried out in about 89 districts covering 1769 blocks across these four states. In Phase-I, Powergrid has to connect about 15,000 GPs in 630 blocks in 43 districts across the four states.


 Industry Speak

Digitalization of Fiber Maintenance

Major challenge to reduce the number of fiber cuts and MTTR are huge. Infra development is happening all across India and frequent cuts are there. Restoration is slow, Right of Way is very difficult to obtain, coordination between agencies deploying underground infrastructure is missing and finally resultant life of the OFC asset isvery low.

Compared with developed nations, which have about 0.2 cuts per 1000 kms per year, India has over 9 cuts per 1000 kms per month, which are 450 percent on higher side.

This high cuts mandates huge investment in terms of money and time for protection and causes huge disturbance during re-convergence and increase of latency.

There is, therefore, a need for very effective maintenance methods or digitalization of optical fiber . Accurate knowledge of OFC assets is essential in terms of geographical location as well as utilization of dark and live fiber pairs.

Some of the methods that can be adopted for faster restoration of cuts are:

GIS / OSS. Specified and high accuracy tools to accurately locate the cables including joint locations.

RFID. Accurate methods of identification of cables belonging to different operators such as pre-defined RFID tags, embedded LC tank circuits.

Simplified splicing. Simplified splicing methods such as bulk splicing of ribbon cables.

Additional electronics. Deployment of electronic equipment like Optical MUX equipment with inbuilt OTDR functionality to maintain the extra /unused fiber pair, which is an asset and needs to be maintained in a manner equal to used pairs. These pairs are going to be revenue generating assets and also assets to be used for use in emergencies.

Customized/robotized FMS/ODF. Deployment of customized FMS for easy and hassle free fiber maintenance and digitization of assets will also help the network managers to get database of un-used assets at a click of button Digitization can help to control opex and increase operational efficiency.

Long-term strategy. Fiber maintenance team has to have long term view while deciding fibre ops strategy. One has to invest in tools and automation to develop a database of faults and manpower skills and field condition.

In short, operational efficiency can be achieved with digitalization andwill help in cost reduction in long term. Quality control and reducing wastage can happen with proper investment over a period of time. Equipment and tools pilferage and wastage can be reduced by digitalization of fiber maintenance.

Prabhat Kumar
Chief Operating Officer,
Savitri Telecom Services


PPP Model Expected to Give a Major Push

The Telecom Regulatory Authority of India has recommended that a public private? partnership (PPP) model that aligns private incentives with long-term service delivery in the vein of the build-own-operate-transfer/build-operate-transfer models of implementation be the preferred means of implementation.

Its detailed recommendations are:

  • The scope of the concessionaire's work should include both deployment and implementation of OFC and other network infrastructure as well as operating the network for the concession period. Concessionaires shall be entitled to proceeds of revenue from dark fiber and/or bandwidth.
  • Concessionaires should be selected by way of a reverse bidding process to determine minimum viability gap funding (VGF) sought for concession. The area of implementation may be analogous with the licensed service areas (LSAs) or the state/UT. The use of a reverse bid process to determine lowest VGF sought can ensure that the amount of support from public funds is rational.
  • The contracting agency may, in the first phase, explore the appetite and response of the potential BOOT participants through a bidding process. This can either be done in one go for the entire country (by having states/LSA or packages as schedules) or beginning with certain states with larger potential of bidders' response.
  • In the second phase (after excluding those areas where BOOT model can be implemented), an EPC contractor may be selected. The EPC contractor should be responsible for building the network and will have a defect-liability period of two years after completing the network. When the network is about to be completed, the contracting agency should engage a third party (through a bidding process) who should be responsible for managing and marketing the network as per the broad principles laid down by the government.
  • The overlapping defect-liability period of two years should be used to ensure smooth transition from construction to maintenance phase.
  • The VGF payments should be divided into two components - an initial capital expenditure amount to allow the concessionaire adequate funds to meet initial capital costs and to be able to raise complementary finance from financial institutions at reasonable rates, and the rest should be annualized over the concession period and be paid out on the achievement of predefined milestones. Early achievement of these milestones would merit early payments, incentivizing speedy delivery. The two components must be carefully balanced over the concession period - while excess payment at the initiation stage can result in the risk of poor quality delivery, not providing concessionaires with sufficient funding in the beginning will necessitate the deployment of more expensive private finance (the additional costs of which will end up being reflected in the VGF bidding process and thus come from public funds).
  • The period of concession should be coterminous with the technical life of the fiber; at present, the consensus on this is 25 years. Such a period should be sufficient to align the concessionaire's incentives with high-quality installation for service delivery, while also providing a large enough window to make a reasonable profit.
  • The period may be further extended in blocks of 10/20/30 years after concession period with the mutual agreement of the government and the concessionaire.
  • Exceptionally high windfall profits may be dealt with by way of a one-time windfall tax and the suspension of further VGF support.
  • However, such measures must be clearly outlined at the outset prior to the bidding stage, in order to ensure necessary stability and predictability to encourage private sector involvement in this manner of long-term infrastructure project. A clear definition of what shall be considered a windfall profit must thus be provided a priori to bidders in order to allow this to be factored into their financial and outlay plans.
  • Care must be taken to ensure that the concessionaire provides access to all service providers in a non-discriminatory and transparent manner. Such competition is essential given that all manner of content (including entertainment, entitlements, and government services) will be delivered on the network.
  • In addition, the relationship between the concessionaire and the service provider should be at arm's length. This can be ensured by mandating a legal separation of the businesses of infrastructure provision and service provision in case of overlapping interests to preclude the possibility of a vertically integrated entity abusing its position.
  • Conditions requiring concessionaires to adhere to a maximum set price can ?ensure service provision at an affordable level and prevent anti-competitive conduct. Such a requirement can be included within the terms of the concession agreement as well as be a prerequisite for the provision of VGF. The maximum price ceiling for wholesale of bandwidth and its evolution over time can be set by the Authority and revised from time to time (or left under forbearance), while retail pricing can be left to market forces subject to the usual competitive safeguards.
  • Liberal eligibility criteria that allows for broad participation is necessary to ensure the participation of a large number of bidders and guarantee a strong and competitive auction process to enable optimal price discovery.
  • There is no need to place a cap on participation in the bidding process - however, a cap should be set on the number of implementation areas that are allocated. This can ensure that the bidders' capacity and resources are not stretched thin due to winning bids for too many areas.
  • Any bidding agency/consortium with winning bids in more than the maximum number of implementation areas permitted for allocation can be allowed to choose the areas it wishes to be allocated.
  • As winning bidders maximize allocation slots available to them, they will be removed from consideration. In the remaining areas, the agency/consortium with the second-best bid may be offered the implementation contract on the same terms as under the winning bid. However where areas remain but the winning L1 bidders no longer have allocation slots available, the L2 bidder may be engaged.
  • Concessionaires be provided with flexibility in terms of route for laying optical fiber, choice of construction, topology, and technology in order to ensure technical as well as economic efficiency. This flexibility is subject to the same standards of redundancy and quality as outlined for BharatNet by the Committee on NOFN.
  • Concessionaires be encouraged to and have the flexibility to deploy large amounts of dark fiber in order to ensure that the network remains future-proof and easy to upgrade.
  • The central and state governments act as anchor clients to purchase a minimum amount of bandwidth (100 Mbps) to be purchased at market prices for the provision of services. Additionally, the mandating of a minimum amount of fiber (e.g., 50 percent) to be set aside for use by other service providers in order to encourage competition may be considered.
  • RoW is perceived as a major risk factor by the private sector; safeguards recognizing such a possibility and outlining the steps to be taken must be put in place under the agreement to attenuate such risk and encourage participation. Guaranteed provision of free RoW is a necessary and non-negotiable precondition to successful deployment of BharatNet, subject to the reinstatement of public property to its original condition.
  • Involvement of state governments is essential for success of the project, irrespective of the strategy chosen for implementing it.
  • States/UTs should be made an integral part of project implementation and an institutional mechanism both at the state and district levels should be created to effectively coordinate and sort out the implementation issues.
  • The central and state governments should additionally consider becoming involved with the concessionaire by becoming a minority equity partner (~26 percent) in the selected consortium - this can reduce the perceived risks and thus lower the costs of obtaining private finance while also automatically solving the risks associated with windfall profits. In addition, this can help the government check monopoly.
  • Last but not the least, capacity enhancement at BBNL is essential. A structural rehaul to bring in professional management (perhaps by way of secondment of experts from the private sector) as well as to restructure the organization along the lines of the Delhi Metro Rail Corporation may be considered.

A digital India, a connected India, an empowered India - is the vision being finally realized? 

 


 

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