DoT cleared National Optical Fibre Network (NOFN) for Broadband Connectivity

The Central Department of Telecommunications (DoT) on 22 July 2011 approved Rs 30000-crore National Optical Fibre Network (NOFN) for broadband connectivity to 2500 Panchayats in India.
 The Telecom Commission (DoT's decision-making arm) approved the project that will be funded through the Universal Service Obligation [USO] Fund. The project will be completed by 2014-15 through a special purpose vehicle (SPV). The Universal Service Obligation Fund was created to fund those operators who go into the rural and non-remunerative areas to offer telecom network. Private telecom companies contribute 5 per cent of their annual revenues towards this fund.

NFON is expected to help the government implement its various e-governance initiatives such as e-health, e-banking and e-education, facilitating inclusive growth. NOFN will enable effective and faster implementation of various mission mode e-governance projects amounting to Rs.50,000 crore initiated by the Department of Information Technology as well as delivery of a whole range of electronic services by the private sector to citizens in rural areas. The optic fibre network will therefore help bring various electronic and Internet-based initiatives of the government to the people living in the remotest corner of the country. 2500 Panchayats will be connected to monitor the various government schemes including the allotment of Aadhar the UID numbers.

33 new major applications will be built using the open source code. These applications will use NOFN to connect rural areas with educational institutions, health service and central government services.

The broadband project will initially be executed by Bharat Sanchar Nigam Limited and other PSUs like RailTel.

The Department of Telecommunication (DoT) identified three business models to build a national broadband network to take high-speed Internet to rural areas. Under the special purpose vehicle (SPV) model, BSNL and MTNL are likely to hold 49 per cent private companies holding 51 per cent. Within this 51 per cent holding, a private company (individually) can hold a maximum of 26 per cent stake.

According to World Bank study 10 per cent increase in broadband connectivity helps in pushing the GDP growth by 1.4 per cent.