A Framework for the Public and Private Sector in National Broadband Deployments in Emerging Economies: The National Broadband Plan of India

Abstract

Emerging economies recognize the substantial economic impact of broadband and hence are increasingly focusing on national broadband plans. Past studies have identified and explored challenges in designing the institutional and market infrastructure for broadband deployment, which are accentuated in an emerging economy, due to the weak existing institutional and market environment. Important issues in emerging economies include the relative roles for the public sector/government and private sector, the institutional mechanisms that could facilitate broadband deployment, both at the backbone, middle level and last mile. This paper examines the Indian case of broadband deployment to develop a framework for emerging economies. Background The Government of India (GOI) set up its wholly owned entity - Bharat Broadband Network Limited (BBNL) - to establish and manage the National Optical Fiber Network (NOFN). The objectives of NOFN are to provide broadband connectivity to: i. All the 250,000 village administrative units in the country ii. Service providers in rural areas in a non-discriminatory manner . BBNL utilizes the existing fibre capacity of three public sector units (PSUs) and lays the incremental fibre required for connectivity. To provide last mile connectivity, the three PSUs depend on selected private franchisees. Each of the PSUs has developed different model and processes for access technology, franchisee management and revenue generation . These different approaches have led to varying levels of success in service provision. Therefore, analysis of relative success factors in these models could help to delineate the appropriate roles for institutions and markets. Objectives: This paper would analyze the organizational issues in the Indian model of broadband deployment to assess the effectiveness of the following: a. Extent of leveraging the existing resources of the three PSUs. b. Organizational mechanisms for network deployment c. Franchisee model d. Inter-linkages of the ecosystem elements with the broadband plan. There are few studies that have examined the above in the context of emerging economies. Even among the research work in developed countries, there are few empirical studies. This paper would provide both practical and theoretical inputs to policy makers in a critical area of policy making. Methodology This paper will adopt the case based approach advocated by Eisenhardt (1989) and Yin (2003) by doing a primary study of the NOFN deployments. We would do both structured and semi-structured interviews with decision-makers at different levels in BBNL, the three PSUs and franchisees. We would also do an evaluation of sample deployments. This will be supported by secondary data. Based on the above, we would develop a framework for identifying the relative roles for the public sector/government and private sector, and institutional mechanisms that could facilitate broadband deployment at the backbone, middle level and last mile and the key lessons learned. Results (so far) Our preliminary analysis based on our interviews with one of the PSUs and its franchisee and secondary data indicates that in an emerging economy: a. The government has a significant role in creating demand, an aspect that is dominated by the private sector in developed economies. b. PSUs have focused on low prices, however, their limited capability to work with a variety of ecosystem partners in developing solutions has often led to their services not being preferred by customers, who may be seeking value, rather than reduced costs. This requires a review of their role. c. The franchisees expect the PSUs to play a key role in supporting their access to technology and in the development of appropriate systems, a role that is likely to be not so critical in developed economies.