BBNL-BSNL merger planned for this fiscal year; telco can complete the work of BharatNet

In an effort to consolidate all of its telecommunications operations under one roof, the government is likely to merge the operations and assets of Bharat Broadband Network Limited (BBNL) with Bharat Sanchar Nigam Limited (BSNL), sources told the Sunday Express. aware of the development. .

The planned merger is expected to be completed by March 31 of this year. A Cabinet note on the proposed merger is being prepared and is expected to be submitted to Cabinet for approval shortly, the sources said.

Responding to questions asking for details on the merger, Department of Telecommunications (DoT) secretary K Rajaraman said there was “no such decision at the moment”, while a BBNL said the organization “was not aware of such a development and was unwilling to comment” on the matter. Emails to the CEO of BSNL did not elicit a response .

BBNL, a Special Purpose Vehicle (SPV) of the Ministry of Communications, was incorporated in 2012 as a public sector unit. He was given the task of implementing the BharatNet project, until then known as the National Optical Fiber Network (NOFN).

The SPV is funded by the Universal Service Obligation Fund (USOF), which is raised from a universal access charge (UAL) applicable to all telecommunications licensees. It came into effect on April 1, 2002 and required all telecommunications service providers to contribute a percentage of their income to USOF funds.


Possible obstacles ahead

The merger, once approved, could pose problems using the Universal Service Obligation Fund (USOF), as BSNL competes directly with other private telecommunications service providers who contribute to the fund. The merger could also result in job cuts for some of BBNL’s contract workers.

Of the 8 percent of adjusted gross receipts, 5 percent goes to the USOF, while the rest goes to the treasury. With the merger of BBNL and BSNL, this fund – which currently stands at nearly Rs 60,000 crore – is likely to go to BSNL and help the state-owned telecommunications company out of its crisis.

Sources also said that the ongoing work on BharatNet, which aims to connect the country’s six Lakh villages to high-speed internet, will now be completed by BSNL by creating a separate division within the state-owned telecommunications company. .

The initial goal of BharatNet, which started as NOFN, was to connect 2.5 lakh gram panchayats (GP) to broadband internet by 2014. The first phase was supposed to connect 1.5 lakh GP , while phase two was supposed to connect the remaining 1 lakh of GPs.

In 2020, the scope of the program was broadened when Prime Minister Narendra Modi announced on August 15 that over the next 1,000 days, BharatNet will connect the six lakh villages through high-speed internet.

Earlier in June 2021, the DoT decided to change the implementation model of BharatNet by taking the path of public-private partnership (PPP). Under the revised plan according to the PPP model, a concessionaire will be selected through an international competitive bidding process and will be responsible for the establishment, upgrade, operation, maintenance and the use of BharatNet. The revised strategy will be implemented in 16 states for the time being.

The implementation of BharatNet under the PPP model is estimated at Rs 29,432 crore, of which the government will spend Rs 19,041 crore to finance the sustainability gap. The PPP model will initially be launched in Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Meghalaya, Manipur, Mizoram, Tripura, Nagaland and Arunachal Pradesh.

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