“Most companies had expressed concern that new connections would not generate as much revenue in semi-urban and rural areas, as there is a significant proliferation of mobile internet. We assured them that they would not didn’t have to worry about revenue and expect good deals in this cycle,” a senior DoT official said.

Officials said companies bidding for the second round will only need to contribute capital and operational expenses for the project without worrying about fluctuations associated with revenue.

Under the revised plan, the government is likely to either provide a minimum income per month per state to bidders who successfully complete their project or subsidize some of their operating expenses.

“We hope to complete the bidding process soon. Depending on bidders’ contributions, details of how revenue will be disbursed will be finalized,” another official said.

As of February 2022, only about 1.72 lakh of the initially targeted 2.5 lakh gram panchayats had been connected to the core network under BharatNet. The official sources also said that on average, only around 20,000 grams of panchayats are connected to the BharatNet network every year.

The government’s flagship rural internet connectivity project, BharatNet, which has been delayed for more than 10 years now, aims to connect the country’s six lakh villages to high-speed broadband internet. The scope of the project was to initially connect only the 2.5 lakh gram panchayats.

On August 15, 2020, Prime Minister Narendra Modi announced that the scope of the project has now been expanded to connect all villages, in addition to gram panchayats and blocks within the next 1000 days. Later in June 2021, the Cabinet of the Union approved a plan to involve private actors also for the implementation of the Internet connectivity scheme in PPP mode.

Under the PPP implementation of BharatNet approved by the Union Cabinet in June last year, a concessionaire selected through an international competitive bidding process will be responsible for the creating, upgrading, operating, maintaining and using BharatNet.

As per the proposal approved at the time, the total cost of the project was estimated at Rs Rs 29,432 crore, of which the government had to spend Rs 19,041 crore as sustainability gap funding. A request for proposals was launched in July 2021, but it got no response from any company, as most bidders cited the high cost of the project and revenue uncertainty.