Cabinet Approves National Optical Fiber Network Project

The Union Cabinet on 25th oct approved a scheme for the creation of a ‘National Optical Fibre Network' (NOFN) for providing broadband connectivity to panchayats at an initial cost of over Rs.20,000 crore, which will help in offering governance, banking and health services online.

The National Optical Fibre Network project aims to extend the existing optical fibre network, which is available up to district and block levels, to the gram panchayat level, by utilising Rs.20,000 crore from the Universal Service Obligation (USO) Fund. A similar amount of investment is likely to be made by the private sector complementing the NOFN infrastructure while providing services to individual users. As per a study conducted by the World Bank, with every 10 per cent increase in broadband penetration, there is a 1.4 per cent increase in GDP growth.

“The Rs.20,000-crore National Optical Fibre Network project is likely to be completed in the next two years…the NOFN will also facilitate implementation of various e-governance initiatives such as e-health, e-banking and e-education, thereby facilitating inclusive growth,” Telecom Secretary told journalists.

Initially, the National Optical Fibre Network project would be executed by the state-owned Bharat Sanchar Nigam Limited (BSNL) and other institutions such as RailTel, Power Grid and the Gas Authority of India. For the implementation and execution, the Cabinet has approved the formation of a special purpose vehicle with equity from the Government of India, Mr. Chandrashekhar said.

The proposed NOFN will enable effective and faster implementation of various mission mode e-governance projects amounting to around Rs.50,000 crore initiated by the Department of Information Technology as well as the delivery of a whole range of electronic services in the above areas by the private sector those in rural areas.