NOFN financially unviable, operators tell Govt

NOFN, India's most ambitious ICT project, is facing stiff challenges and appearing to be financially unviable for the operators. The operators who are using the USOF to roll out the National Optic Fibre Network have told the government that low population density and difficult location conditions makes service provision financial unviable for NOFN. In a written reply in the Rajya Sabha, telecom minister Kapil Sibal admitted that the operators are facing multiple issues in rolling out various USOF funded projects including NOFN.

In a cover story in Voice&Data in November issue we had said the project is financially unviable as it has many flaws in the planning level as well as in terms of execution. The government has sanctioned Rs 20,000 crore for the NOFN project alone, which will be funded by USOF. NOFN is being executed by three telecom PSUS - BSNL, Powergrid and Railtel. The operators who are using the USO fund for rolling out government schemes have told that they are facing multiple hurdles in rolling out those schemes. Besides financial unviability, the service providers have also said that the CAPEX (Capital Expenditure) and OPEX (Operational Expenditure) for development of telecom infrastructure in remote areas is very high. They have also cited lack of adequate backhaul coonectivity, difficulties in getting Right of Way (RoW) and lack of proper supporting infrastructure like road, electricity as the other hurdles in rolling out the USOF funded government schemes.

At present there are six different schemes being funded by Universal Services Obligation Fund to build telecom infrastructure in the country. They are NOFN to connect all Gram Panchayats through Optical Fibre Cabl; Optical Fibre Network Augmentation, Creation and Management of Intra-District Sub-Divisional Headquarter-District Headquarter (SDHQ-DHQ) OFC Network in North Eastern Region; Rural Broadband Scheme for expanding provision of Wireline Broadband Connectivity upto village level; Shared Mobile Infrastructure Scheme; Public Access: Village Public Telephones in all villages and Scheme for Mobile Communication Services in Left Wing Extremism (LWE) affected Areas. For the record USOF has been established w.e.f. 01.04.2002 with the objective of providing access to telecom services to people in the rural and remote areas through viability gap funding. The resources for implementation of USO are raised through USOF a Universal Service Levy (USL), which is 5% of the Adjusted Gross Revenue (AGR) of all Telecom Service Providers except the pure value added service providers like Internet, Voice Mail, E-Mail service providers etc.

(First published in Voice & Data)