The Centre is preparing to throw open the BharatNet optical fibre network to private internet service providers (ISPs), in a significant course correction aimed at fixing the programme’s weakest link: getting broadband from the gram panchayat into rural homes.
According to a report in Mint citing two officials familiar with the plan, a dedicated portal to register ISPs is being developed and fresh guidelines governing their use of the BharatNet backbone are being drafted. A notification is expected soon after several rounds of consultations between the government and service providers.
Backbone built, homes still waiting
BharatNet, the ₹1.39 lakh crore programme meant to take high-speed connectivity to rural India, has largely delivered on its fibre backbone. Around 2,24,590 gram panchayats were fibre-connected by the end of September, as per the Department of Telecommunications (DoT) dashboard. The household picture, however, is far weaker: only about 16.4 lakh homes had been connected against a target of 1.5 crore, and active connections stood at roughly 9.47 lakh in April, the latest data available.
The gap has drawn official scrutiny. In August, the Comptroller and Auditor General of India (CAG) noted that BharatNet had fallen short of its goal of bridging the digital divide because of shortcomings in planning and execution. The auditor found that only 33.2% of service-ready gram panchayats were operational as of November 2025, and that fibre faults took an average of 17 days to restore.
What changes under the new model
At present, local entrepreneurs work as sub-contractors to BSNL to install home connections, earning a sign-up bonus and a share of monthly subscriber revenue. The proposed framework would let both private and public sector ISPs register independently through the new portal and serve rural subscribers directly.
- Customer ownership: ISPs will own the relationship with the subscriber.
- Direct subsidy: Providers will receive a per-connection subsidy of ₹8,900 to ₹12,900.
- Revenue retention: ISPs will keep 95% of monthly subscriber revenue; BSNL will not get a revenue share but will remain BharatNet’s project management agency.
- Accountability: ISPs will need to furnish bank guarantees or cash/insurance surety bonds equal to the subsidy received, with audits matching disbursements against new connections.
Of the overall corpus, ₹14,686 crore has been set aside as subsidy for connecting 1.5 crore households under the agreement between BSNL and Digital Bharat Nidhi (DBN), the universal service fund that finances BharatNet through a 5% levy on telecom operators’ adjusted gross revenue.
Industry welcomes, flags friction
Industry bodies have broadly welcomed the shift. Rajesh Chharia, President of the Internet Service Providers Association of India (ISPAI), said bringing private ISPs into BharatNet would be positive, but urged the government to simplify financial obligations and reporting for ease of doing business. He added that smaller ISPs could also support e-health, e-education and e-governance delivery in villages.
Executives, however, are wary of maintaining guarantees for 30 months and the risk of repaying subsidies if subscribers drop off. Rakesh Bhatnagar, Director General of Voice of Indian Commtech Enterprises (VoICE), cautioned that rural demand may be price-sensitive and suggested the government first audit how many Phase I and II gram panchayat connections are actually operational.
Why it matters for digital governance
Last-mile broadband is the foundation on which rural citizen services, from DigiLocker and UMANG to telemedicine, online education and Common Service Centres, ultimately depend. Opening BharatNet to a wider pool of providers could accelerate household adoption and improve service quality through competition, provided the subsidy, guarantee and audit framework is calibrated to attract smaller regional ISPs rather than deter them. State-owned RailTel and other providers are seen as likely beneficiaries of the expanded access.
The amended BharatNet programme, approved in August 2023 with an outlay of about ₹1.4 lakh crore, aims to upgrade the network and extend coverage to 2.64 lakh gram panchayats. How quickly the new ISP model is notified and operationalised will be closely watched as a test of whether India can convert its rural fibre footprint into meaningful digital inclusion.