Budget 2022: Optical fibre contracts could boost digital consumption in rural areas

Finance Minister Nirmala Sitharaman in the Budget 2022 speech announced the government’s vision to connect all villages and their residents to same e-services, communication facilities, and digital resources as urban areas and their residents. “The contracts for laying optical fibre in all villages, including remote areas, will be awarded under the Bharatnet project through PPP (Public Private Partnership) in 2022-23. Completion is expected in 2025. Measures will be taken to enable better and more efficient use of the optical fibre,” she said in the parliament.

 

The government plans to enable affordable broadband and mobile communication in rural and remote areas. This, the industry feels, will be positive for digital media and content consumption in the country. “It will continue to push video consumption growth backed by increased penetration in smaller towns. Shift from traditional media to digital media will become more rampant; as traditional media has largely moved away from urban towards rural consumption,” Karan Taurani, senior vice president, Elara Capital said.

 

According to Elara Capital, it will continue to push video consumption growth backed by increased penetration in smaller towns. “Impact will be a shift from traditional media to digital media will become more rampant ; as traditional media has largely moved away from urban towards rural consumption. It will also benefit internet companies as their growth is dependent on user and consumption growth in tier 2 and tier 3 markets,” Taurani added.

 

Deloitte India said that going forward, optical fibre to be in focus in a big way. 

“Integrated with 5G roll out proposed in FY 22-23, the potential will go well beyond B2B. We will see significant B2C and G2C initiatives. This will spur domestic tech and telecom sector, create a host of edtech, healthtech and such another initiatives as also enable the Government to enhance capabilities in meeting its social objectives,” P N Sudarshan , partner and TMT leader, Deloitte India said.

The industry also feels that villages will get a boost from New Vibrant Villages Programme. “Border villages will benefit from New Vibrant Villages Programme on construction, connectivity, tourism, education, and employment. Telecom, digitalization, and Electric Vehicles are core areas of focus in this budget,” Taranpreet Singh, Partner, TASS Advisory said.

 

Industry body COAI (Cellular Operators Association of India) in a statement said that the Budget provides further impetus to the Digital India initiative. 

“We are glad to see the focus on the enhancement of digital connectivity and the announcement for the required spectrum auction in 2022 for the rollout of 5G mobile services. The proposal for taking progressive decisions in encouraging affordable broadband and mobile services through facilitating PLI scheme for 5G equipment, laying optical fiber cables through PPP model under BharatNet project are welcome steps,” COAI said.

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