Government May Scrap BSNL’s Northeast Connectivity Program

Government May Scrap BSNL’s Northeast Connectivity Program

The Narendra Modi government is preparing an internal note to scrap the state-owned Bharat Sanchar Nigam Limited’s (BSNL) mega Northeast telecom connectivity initiative that could garner as much as Rs 500 crore to the stressed telco which is yet to get any sort of relief from the Centre.

The telecom department is preparing an internal note to be taken up by the Digital Communications Commission (DCC) to annul the Northeast – I connectivity program bagged by BSNL.

DCC is the highest inter-ministerial decision-making group of the telecom sector with representation from the Niti Aayog CEO Amitabh Kant, Department of Industrial Policy and Promotion (DIPP) secretary Ramesh Abhishek Ministry of Electronics and IT (MeitY) secretary Ajay Prakash Sawhney.

The note, according to a person aware of the matter, would put the onus squarely on BSNL saying that it had not taken any commitment for putting up fourth-generation or 4G infrastructure and deploying of VSAT-based backhaul sites.

This would virtually mean that the people in the region would have to further await mobile telephony services for another 5 years.

However, BSNL in its letter to the Universal Service Obligation Fund (USOF) administrator dated May 24, has said that it would deploy 4G equipment in addition to 2G at all sites without billing any additional cost wherever fibre or VSAT bandwidth is available and would rollout the entire network within a year’s timeframe.

USOF is a Rs 50,000 strong government kitty to fund rural and remote telephony services, and has already asked BSNL to not to go ahead with the connectivity program in two Northeastern states.

Interestingly, the original tender terms mandate putting up of 2G mobile sites only, and 4G-based data services are considered vulnerable in the wake of security in border areas.

Despite the intervention from the Prime Minister Office (PMO) and telecom minister Shri Ravi Shankar Prasad’s reiterating that plans were afoot to revive financially-sick service provider, the department’s move may further dampen the telco’s spirits as its revenue is on a constant decline month-on-month in the absence of 4G services.

The government-funded projects such as connectivity in unconnected villages covering the Northeast region as well as Left Wing Extremism (LWE) affected areas are considered as some of the lifesaving programs for the burdened telco which spends nearly 75% of its revenue in meeting workforce salary expenses.

The Northeast-I initiative, a part of the ambitious Comprehensive Telecom Development Plan for the North-Eastern Region (NER), approved in September 2014, awarded to state-controlled fourth-largest telco was meant to allow basic telephony or 2G services in the region.

In April 2017, BSNL selected vendor-partners to roll out the initiative to deploy 2,817 mobile towers in Arunachal Pradesh and Assam’s two districts— Karbi Anglong and Dima Hasao.

The state of Arunachal Pradesh has strategic importance since it borders with China in the north and northeast while Myanmar is located to its southern periphery with extremely rough terrain. This would possibly mean that only a state-controlled operator could deploy the network in such a sensitive area.

In May this year, the department has cancelled the tender for the provision of much-awaited mobile services in the Andaman and Nicobar Islands.

The government is yet to seek Cabinet approval for the BSNL’s revival strategy that includes voluntary retirement scheme (VRS), real estate assets monetisation as well as leasing of fibre assets.

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