BSNL WiMAX Rollout for Rural India Lacks Funding

BSNL wrote to the central government that, it will have to stop the WiMAX implementation for rural India, if enough grant of Rs 2,395 crore is not allotted to support the unviable business. BSNL has been running on loss of Rs 1,822.65 crore for the year to end March, a first in its history. – ET reports.

Being the state-owned telecom company, BSNL has been operating as a social workhorse fulfilling the government’s social obligations without rewards. BSNL threatened to stop the project rollout on the grounds that it did not make commercial sense. BSNL has told the communications ministry that Rs 2,395 crore was the minimum amount required to setup and run the rural WiMAX project on a no-profit/loss basis.

The project is divided into three phases. About 1000 towers for WiMAX are to be setup in the first phase, followed by 6,863 units in the second phase. BSNL is close to completing the rollout of Phase 1.

So far, the Department of Information Technology , has agreed to provide subsides to the tune of Rs 710 crore for the two phases – Rs 160 crore for setting up the first 1000 towers and Rs 550 crore for the remaining. But BSNL has said that it can support a maximum of 1,798 towers with this level of funding.

This implies, the can only build 798 towers when compared to the requirement of close to 7,000 units for completion of Phase II. BSNL’s move to stop the project will see only 17,000 Computer Service Centres (CSCs) get WiMAX based internet connectivity across rural India as against the government’s commitment to link up over 62,000 CSCs through this project. This also ranks amongst the key social initiatives of the UPA regime. [source]

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