Private ISPs may connect last mile in BharatNet as users lag

Summary

Under the new model for BharatNet, ISPs will own customer relationships, receive direct per-connection subsidies of ₹8,900-12,900, and retain 95% of monthly subscriber revenues.

India is preparing to open its BharatNet optical fibre network to private internet service providers, two officials aware of the plans said, as sluggish last-mile progress prompts a rethink of its ambitious plan to bring broadband to the hinterland. A new portal to sign up ISPs is in the works, while guidelines for their BharatNet usage are being prepared.

While India successfully built BharatNet's fiber backbone, the ₹1.39-trillion project has struggled to actually connect the households. Out of the targeted 15 million homes, only 1.64 million were connected till September end, a telecom department dashboard showed. Active connections were even less: just 947,000 in April, according to latest available data. The plan now is to get private ISPs to step in and provide home connections, using the BharatNet backbone.

"There have been multiple meetings between ISPs and the government to amend the existing guidelines. A notification is expected soon. The same has been done to expedite rural internet connectivity under the BharatNet project by allowing ISPs to serve subscribers directly," one of the two officials cited above said.

Under the current setup, local entrepreneurs act as sub-contractors for BSNL to install home broadband connections. In return, BSNL gives them a signup bonus and a share of the monthly subscriber revenue. Under the new model, both private and public sector ISPs will be allowed to register independently through the portal in the works, the second official said. ISPs will own customer relationships, receive direct per-connection subsidies of ₹8,900-12,900, and retain 95% of monthly subscriber revenues. BSNL will not get any revenue share, but will continue to be BharatNet's project management agency.

Queries emailed to BSNL, Department of Telecom and RailTel on Friday remained unanswered.

Positive move

The new guidelines are seen as positive for companies such as state-owned RailTel and other internet service providers, which could gain greater access to rural markets and expand their customer base. The rethink stems partially from the struggle of BSNL and its sub-contractors to advance rural broadband connections fast enough.

Launched in 2011 as the National Optical Fibre Network and later renamed BharatNet, the programme aimed to bring high-speed broadband to 250,000 Gram Panchayats within two years, a deadline that passed unmet. The target was subsequently divided into phases. In Phase I, the target was to connect 100,000 Gram Panchayats, which was completed only in December 2017. Under phase 2, the target was set to connect the remaining 150,000 gram panchayats, with a revised strategy by March 2019. As of September end, about 224,590 gram panchayats have been made connected by fiber under the BharatNet, according to the DoT dashboard.

"If private ISPs are brought into BharatNet, it will be a positive move. However, the government will have to address certain issues such as financial obligations and reporting requirements, for ease of doing business," said Rajesh Chharia, president of Internet Service Providers Association of India (ISPAI), which represents over 100 providers. According to Chharia, smaller ISPs involved in BharatNet can also voluntarily support the government's efforts on e-health, e-education, and e-governance.

Hitch

ISPs will have to submit bank guarantees or cash/insurance surety bonds equal to subsidy received, the second official added. This is to ensure accountability, with audits verifying the subsidies disbursed against the addition of new subscriber connections.

"There is a concern that having to maintain guarantees for 30 months, risk repaying subsidies if subscribers discontinue their connections. Further, maintaining such bank guarantees is an added cost alongside multiple audits which could make the process cumbersome," an industry executive said.

In August 2023, the government approved the ₹1.4 trillion amended BharatNet programme to upgrade the existing network and expand coverage to 264,000 gram panchayats. However, the project continues to face criticism over implementation delays and gaps in last-mile connectivity.

"It is always good to put the existing infrastructure under BharatNet to use. However, there could be a financial uncertainty in the villages for private ISPs as people are used to freebies," said Rakesh Bhatnagar, director general of VoICE (Voice of Indian Commtech Enterprises), which represents local telecom gear makers. According to Bhatnagar, the government needs to first audit and check how many of the gram panchayats connected in Phase-1 and Phase-2 are operational if it wants to seriously connect the last mile.

Of the ₹1.39 trillion corpus, the government has kept ₹14,686 crore as subsidy to connect 15 million households, according to the agreement document between BSNL and Digital Bharat Nidhi (DBN), the government fund to promote internet in under-served areas. Telcos contribute 5% of their adjusted gross revenue to DBN, which also finances BharatNet.

In August, the Comptroller and Auditor General of India flagged BharatNet's weaknesses, stating it fell short of its objective to bridge the digital divide due to deficiencies in planning and execution.

"Operational performance remained significantly low with persistent downtime, low availability and poor fault-resolution record. As of November 2025, only 33.2% of service-ready GPs were operational. Moreover, the mean time to restore (MTTR) fibre faults stood at an average of 17 days, reflecting delayed maintenance response," CAG said in the report.

According to a parliament committee report in August, an amount of ₹40,235 crore has been disbursed for BharatNet phase 1 and phase 2.