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Bharat Broadband Network Limited (BBNL) – Immediate Need for Greater Clarity and Transparency before it Threatens to become another Scam
Background

BBNL has been formed with very good intention of expanding the reach of connectivity through fiber up to Gram Panchayat (GP) level as carriers have not been investing in this vital infrastructure basically due to very low ROI, delay in returns and total ambiguity in national RoW policy. Government initiative to form BBNL to fund the roll out through USOF is a step in the right direction. The question which arises now is that would BBNL serve its purpose or end up in raising more questions than actually connecting the rural India with fiber.

Issues

1. Induct Private Sector Professionals into BBNL Board. A minimum 20,000 Cr outlay project has been structured as a board comprising of CMD and three directors, all of them are from the government machinery and PSUs. No management expertise from the successfully built national telecom infrastructure from private enterprises has been brought on board. This is against all recommendations to the government that in order to avoid a possible repeat of Air India, ITI, BSNL etc, suitable inclusion of private sector expertise should always be considered. At least three highly experienced members from successful private sectors must be included in the board, making total board strength of 7 including the CMD.

2. Clarify Objectives of BBNL. The objective of BBNL needs to be clearly defined. As against providing fiber connectivity to 250,000 GPs, it should be to provide fiber connectivity to all government licensed entities like telcos, ISPs, MSOs, LCOs, all bona fide users etc right up to the GP levels on a non-discriminatory basis.

3. Transparency in Allotment of Connectivity without Allowing Hoarding. To achieve real non-discriminatory nature of provision of fiber connectivity thereby avoiding any disruption in the level playing field, the process of application must be automated just like flight reservation without reserving any discretionary quota.Any disruption in this is highly detrimental as we have seen in the PDS. Levy sugar vs. free sale sugar resulting into self created disruption in pricing and availability causing a total breakdown of PDS. Here also, BBNL fiber connectivity is expected to be cheaper than privately laid cables bringing the same scenario of levy sugar vs. free sale sugar. This is a serious pitfall and needs to be removed ab initio.

4. RoW Benefits Must for all Fiber Laying Players and No Anti Competitive Advantage to BBNL. Centre has signed a tripartite RoW agreement involving 16 states/UT and BBNL. This is historic in nature. First time in the history of the country this has been done. A laudable achievement which should have been done along with privatization of telecom in 1994 itself. Never mind, it is better late than never. This RoW MoU is a key. The question arises that when center wants it, it can achieve anything from states but why should this be restricted only to BBNL. What about other telcos who are also building fiber networks. This has a huge potential to cause disruption at the fiber infrastructure level that BBNL would have the cheapest fiber per km whereas the rest of the telcos will be hugely costlier. This anomaly must be addressed before it invites a long drawn legal battle which is of self making. Also, all states/UT must sign it or must be made to sign quickly.

5. Remove Unethical Duct/Fiber Laying Practice. BBNL must be fully on GIS maps. The telecom infrastructure of fiber roll out has seen one of the greatest modes of corruption in the country. Companies who have sought legal RoW either by themselves have allowed other companies to lay their ducts too or in some cases, at lower levels, some companies have stealthily taken a piggy back ride by putting their ducts along in the same trench. Both these methods have resulted into unethical practices. This must be avoided under all circumstances by making 4 above applicable to all telcos who are authorized government licensees and going strictly GIS.

6. Welcome all Augmenting Technologies. BBNL has adopted the technology to be GPON and disregarded fixed wireless or satellite. While it is true that GPON is best indeed but in some cases where terrain does not allow cost effective fiber roll out, a judicious mix of fixed wireless and satellite can be adopted along with fiber.

7. Open Structure for BBNL. The structure of BBNL must not be hidden by bringing confusing add-ons like BBNL is a SPV. BBNL is a registered company under the companies Act and must adopt all valid practices which all other companies follow. BBNL is not carved out of a financial engineering exercise. This must be made unambiguous to the world the way rest of the contemporary organizations like NBN have done.

Conclusion

8. Before the country starts visualizing BBNL to be Air India, ITI, BSNL etc in the making, all lessons learnt must be incorporated in its structure, objectives funding and operations. BBNL may end up in becoming a 30,000 Cr assets holding company which is a huge capex and having valuation in excess of 100,000 Cr, it is good if all anomalies are addressed ab initio lest it is dubbed as yet another scam.

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