What is BharatNet Project?

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What is BharatNet Project? Blog Image

Overview:

The Union Cabinet recently approved an allotment of ₹1,39,579 crore for the next phase of Bharat Net to make 5G network available to remote areas of the country.

About BharatNet Project:

 

  • The National Optical Fibre Network (NOFN), launched in October 2011, was renamed the Bharat Net Project in 2015.
  • It is an ambitious project of the Government of India to provide broadband connectivity to all village panchayats in the country.
  • It aims to provide affordable broadband connectivity of 2 Mbps to 20 Mbps for all households and on-demand capacity to all institutions to realize the vision of Digital India, in partnership with States and the private sector.
  • The objective is to facilitate the delivery of e-governance, e-health, e-education, e-banking, Internet and other services to rural India.
  • To achieve this, the existing fibres of PSUs (BSNL, Railtel and Power Grid) were utilised and incremental fibre was laid to connect to Gram Panchayats wherever necessary. 
  • The entire project is being funded by the Universal service Obligation Fund (USOF), which was set up to improve telecom services in rural and remote areas of the country.
  • The project is being executed by a Special Purpose Vehicle (SPV), namely Bharat Broadband Network Limited (BBNL), which was incorporated on 25.02.2012 under Indian Companies Act 1956. 

 

Key Facts about Universal Service Obligation Fund (USOF):

  • It is a government fund established by the Government of India to provide financial support for the expansion of telecommunications and broadband services in rural and remote areas of the country.
  • The primary objective of USOF is to bridge the digital divide and ensure that telecom and internet services are accessible to all, especially in areas where private telecom operators may find it economically unviable to operate due to high infrastructure costs and low population density.
  • Funding Mechanism:
    • The USOF is funded through a levy on the revenue earned by telecom operators.
    • The government imposes a Universal Service Levy (USL) on the gross revenue of the telecom companies, which is a percentage of their Adjusted Gross Revenue (AGR).
    • This levy is collected and deposited into the USOF.
  • The USOF is managed by the Department of Telecommunications (DoT) under the Ministry of Communications.

 


Q1) What is the Adjusted Gross Revenue (AGR)?

Telecom operators are required to pay licence fee and spectrum charges in the form of ‘revenue share’ to the Government. The revenue amount used to calculate this revenue share is known as AGR.The definition of AGR has been under litigation for 14 years. While telecom companies argued that it should comprise revenue from telecom services, the Department of Telecom (DoT)’s stand was that the AGR should include all revenue earned by an operator, including that from non-core telecom operations. The AGR directly impacts the outgo from the pockets of telcos to the DoT as it is used to calculate the levies payable by operators. Currently, telecom operators pay 8% of the AGR as licence fee, while spectrum usage charges (SUC) vary between 3-5% of AGR.

Source: Cabinet approves ₹1.39 lakh crore for BharatNet project