The Bharat Broadband Network (BBNL) is the implementation agency of BharatNet, which was merged into BSNL in July last year. Until now, the government has connected about 194,000 villages and provided internet connections to 5,67,000 households. Of these, 351,000 fiber connections have been given using the new BharatNet Udyami project.

The Union Cabinet recently approved Rs 1.39 lakh crore for modernizing the BharatNet project which involves changing its execution strategy and providing fiber connections to the last mile through Village Level Entrepreneurs. For BharatNet, this is the third such package approved by the Centre. In 2017, the Cabinet approved Rs 42,068 crore for the first two phases. In 2021, the Cabinet allocated another Rs 19,041 crore to implement the last-mile connectivity under a PPP model which failed to attract much interest.

With this upgrade, the government is looking to speed up its process of connecting all 640,000 villages over the next 2.5 years.

Just like private telcos Airtel (NS:) and Jio, which involve local cable operators to provide fixed home broadband services, the government, under the revamped model, will involve village-level entrepreneurs or Udyamis to take the fiber connections to the homes on a 50:50 revenue-sharing basis.

The cost of taking the infrastructure to the home will be borne by the government; the rural entrepreneurs will only need to be involved in the maintenance and operations of home connections, including addressing consumer complaints related to fiber cuts, etc,

In the pilot, BharatNet registered an average speed of 175 GB per household per month. According to industry executives, the pace of BharatNet has been slow given that the government has been able to make just 194,000 gram panchayats service ready so far. From November 2022 till March this year, about 6,000 gram panchayats have been made service ready.

Under the BharatNet project, the home broadband package will start from Rs 399 a month, giving 30 Mbps unlimited data, bundled with OTT offerings, etc.

The other plans include Rs 599, Rs 799, etc. In comparison, market leader Jio’s entry-level fiber plan starts at Rs 198 per month, offering unlimited data and voice at 10 Mbps speed, and television channels as well at Rs 100 extra.

Conclusion:

Telecom equipment makers soar after Cabinet approves Rs 1.39 lakh crore for last mile connectivity.

HFCL (NS:) Limited zoomed 14 percent in the morning trade on August 7 to Rs 74.5 a piece.

Sterlite Technologies (NS:) Limited also soared 8 percent. The company has expertise ranging from connectivity and access solutions to hyper-scale network design and deployment.

Shares of ITI Ltd gained 8.3 percent to hit Rs 120. It is a public sector undertaking under the Department of Telecommunication, Ministry of Communications, Government of India.

Disclaimer: The report provided is for informational purposes only and should not be interpreted as a proposition to buy or sell any securities.