Budget 2018: Govt earmarks Rs 100-bn for telecom infrastructure

500,000 wi-fi hotspots to be set up for rural citizens

In order to provide broadband connectivity to 50 million rural citizens, the government plans to set up 500,000 wi-fi hotspots. The government has earmarked Rs 100 billion in 2018-19 for creation and augmentation of telecom infrastructure in the country.

Presenting the Union Budget 2018-19 in the Lok Sabha, Finance Minister Arun Jaitley said task of connecting 100,000 gram panchayats through high-speed optical fiber network has been completed under phase-I of the Bharatnet project.

“This has enabled broadband access to over 200 million (20 crore) rural Indians in about two hundred fifty thousand villages (250,000),” the Finance Minister said.

The Department of Telecommunications (DoT) is expecting to complete the phase-2 of BharatNet project by December this year. Under this phase, the remaining 150,000 gram panchayats will be connected with high-speed optical fibre.

The Finance Minister also said to harness the benefit of emerging new technologies, particularly the ‘Fifth Generation’ (5G) and its adoption, the DoT will support the establishment of an indigenous 5G test bed at IIT, Chennai.

The main objective of the BharatNet project is to provide affordable broadband services to rural and remote areas in partnership with private sector as well as state governments.

Private telecom operators including Bharti Airtel, Reliance Jio, Vodafone and Idea Cellular have shown interest in providing last mile connectivity in about 43,000 gram panchayats through the BharatNet project.

To make the scheme attractive and affordable, the government has announced a tariff structure, wherein the operators can take the optic fibre on lease and provide broadband connectivity to customers at cheaper rates.

The government feels that rolling out of services by telcos is expected to trigger the village level eco-system and will give an impetus to broadband facilities in rural India.

Reacting to the budget, COAI Director General Rajan S Mathews said, “The support extended to IIT Chennai for an indigenous 5G test bed is a welcome move. We are also happy to see that the allocation of Digital India has been doubled and the government proposes to set up 500,000 WiFi hotspots.”

He, however, said the telecom industry was deeply disappointed that none of its key demands have found mention in the budget. “We had sought a reduction in levies and taxes, and an urgent intervention is critical for resuscitating the sector, which is currently experiencing its worst financial health and hyper-competition,” Mathews said.

However, Hemant Joshi, Partner, Deloitte India said overall the Union Budget 2018 is good for the telecom Industry. “The setting up of 5G center in collaboration with IIT Chennai would help India being an early adopter of the next generation technology rather than being a laggard. This could be a boon for the telecom industry and guide the telecom operators to move to next-gen networks efficiently and effectively,” he said.

Deloitte said the rollout of 500,000 wi-fi hotspots could be an excellent move for improving connectivity in rural areas and hence bringing them under the ambit of applications and services rolled out under Digital India.