(Last Updated On: October 1, 2014)

The government’s ambitious Digital India project of Rs. 1.13 lakh crore can breathe new life into the dying PSU telco companies like BSNL and MTNL.

digital india project- BSNL and MTNL

This project aims to deliver government services to rural and remote parts of India via high-speed internet over computers and mobile devices. According to an estimate, these services can provide up to Rs. 92,000 crore in annual revenue by year 2020 if the project is handed over to BSNL and MTNL.

This revenue estimate takes into assumption that these telecom companies will be serving 10 crore transactions a day by the year 2020. In a proposal to telecom secretary Rakesh Garg, MTNL has proposed to form a 50-50 joint venture with BSNL for delivering these government services to citizens all over the nation for Rs. 25 per transaction.

BSNL and MTNL have both approached the DoT with their proposal of Rs. 25 per transaction, as they believe that they might not make through the tendering process. BSNL has not revealed any specific details, but agree with the fact these this project will bring in fresh revenue for the dying state-run telecom companies.

BSNL has lost more than 40% of its landline subscribers since the last decade while MTNL is left with 3.5 million wireline customers only. A top executive at MTNL said, “Nearly 50% of combined 48,000-plus landline exchanges are idle, and can be converted into pan-India data centres at a modest cost to meet Digital India’s services roll out targets.”

The Digital India Project will roll out much faster and at lower costs if the joint venture of BSNL and MTNL converts its idle landline exchange into data centres.

The decision of whether to allot the project to BSNL and MTNL or not is yet to be made by DoT.

We, as subscribers, want the roll out of the project to happen as soon as possible. This will usher in a new era of affordable high-speed internet access in India and will be really helpful to upcoming start-ups and small businesses.