Agreement Signed between DBN (Digital Bharat Nidhi) - Department of Telecommunications; Government of Tamil Nadu & TANFINET for Utilisation of BharatNet Network in Tamil Nadu under ABP

1. At a Glance

• On 30 Oct 2026, three parties signed a Utilisation Agreement: Digital Bharat Nidhi (DBN, under DoT), the Government of Tamil Nadu and TANFINET (Tamil Nadu FibreNet Corporation). It covers use of the BharatNet network in Tamil Nadu under the Amended BharatNet Program (ABP) [1].
• Its focus is subsidised rural home fibre (FTTH) connections under the State-led model. The Centre now subsidises use of the network, not only building it [1].
• Why it matters for UPSC: it brings together rural broadband, cooperative federalism, universal service funding (USOF → DBN under the Telecommunications Act, 2023) and last-mile delivery of digital services [1].

2. Why in the News

• 30 Oct 2026: the Utilisation Agreement was signed. It is expected to give more than 5 lakh rural home fibre connections and on-demand connectivity to 4,767 villages in Tamil Nadu [1].
• It follows similar ABP agreements with other States, such as the Jharkhand implementation agreement [3] and the Andhra Pradesh Memorandum of Cooperation [4].

3. Background & Evolution

• USOF was set up under the Indian Telegraph (Amendment) Act, 2003, with effect from 01.04.2002. It was later renamed Digital Bharat Nidhi under The Telecommunications Act, 2023 [1].
• BharatNet Phase II: Tamil Nadu chose to implement it through its own special purpose vehicle, TANFINET, instead of BSNL. This is the State-led model [5].
• 4 Aug 2023: the Union Cabinet approved the ABP, funded through Digital Bharat Nidhi, to upgrade, consolidate and expand BharatNet [1][2].
• 2025: ABP started operating in Gujarat under the State-led model [2].
• 31 Dec 2025: in Tamil Nadu, 10,869 of 12,525 GPs (excluding Block HQs) were service-ready. Only 808 FTTH connections had been given through BharatNet [5].
• 2026: agreements were signed with Jharkhand [3] and Andhra Pradesh [4], and then the Tamil Nadu Utilisation Agreement (30 Oct 2026) [1].

4. Core Static Facts

Item	Fact
Programme	Amended BharatNet Program (ABP): upgrade, consolidate and expand BharatNet; broadband to all GPs, and to villages on demand [1]
Cabinet approval	4 August 2023 [1][2]
Total ABP outlay	₹1,39,579 crore, of which CAPEX is ₹42,847 crore; the rest is OPEX for 10 years [2]
Funding source	Digital Bharat Nidhi [2]
DBN status	Successor to USOF; attached office of DoT, Ministry of Communications [1]
Legal basis	USOF: Indian Telegraph (Amendment) Act, 2003 (w.e.f. 01.04.2002). Renamed DBN under The Telecommunications Act, 2023 [1]
Signatories (TN)	DBN (DoT), Government of Tamil Nadu, TANFINET [1]
Model	State-led: TANFINET implements, not BSNL [1][5]
TN FTTH target	5,27,506 households over 10 years (the release says "more than 5 lakh") [1][5]
TN villages (on demand)	4,767 [1]
Central allocation to TN	₹1,632 crore excluding GST, including OPEX for 10 years [5]
TN GPs	12,525 in total; 10,869 service-ready as of 31.12.2025 [5]
Other DBN schemes	4G Saturation Project; mobile schemes for Aspirational Districts, LWE areas, Himalayan and border areas, islands, and the North East [1]

5. Multi-Dimensional Analysis

Economic

• ABP is very large: ₹1,39,579 crore, with CAPEX of ₹42,847 crore and 10 years of OPEX [2]. Funding OPEX shows a shift from building assets to making sure they are used.
• Subsidising utilisation tackles the low take-up problem. Tamil Nadu had only 808 BharatNet FTTH connections by Dec 2025, against a target of over 5 lakh [5][1].
• Spending: ₹11,722.26 crore was disbursed under BharatNet against ₹17,000 crore allocated over the last three financial years [6].

Social

• Home fibre is meant to support e-Governance, online education, telemedicine, digital payments and citizen services in rural and remote areas [1].
• Connecting villages on demand reaches habitations beyond the GP headquarters and narrows the rural digital divide [1].

Ethical / Governance (Federalism)

• Under the State-led model, the State and its own agency take part in the network: an example of cooperative federalism [1].
• States can choose between their own agency (TANFINET in Tamil Nadu) and BSNL [5][3].

Administrative

• The tripartite agreement sets out how the network is used and how subsidy flows [1]. TANFINET implements over 10 years [5].
• ABP is also being rolled out through the BharatNet Udyami model with subsidy support [6].
• Bottleneck: some GPs were still not service-ready in Tamil Nadu as of Dec 2025 (10,869 of 12,525) [5].

Legal / Constitutional

• Statutory base: DBN under The Telecommunications Act, 2023, replacing the USOF regime under the Indian Telegraph Act [1].

Scientific / Technological

• Optical-fibre connectivity, last-mile FTTH and "future-ready" broadband [1]. In Jharkhand, ABP upgrades GPs from linear to ring topology [3].

6. Recent Developments (last 12–18 months)

• 2025: ABP started operating in Gujarat under the State-led model [2].
• Dec 2025 status: in Tamil Nadu, 10,869 GPs were service-ready and there were 808 FTTH connections [5].
• 2026: Jharkhand agreement among DBN, the Government of Jharkhand, JDICL, BSNL and JCNL. Scope: 4,395 GPs (4,387 upgraded from linear to ring topology) and 26,777 villages on demand [3].
• 2026: DBN signed a Memorandum of Cooperation with Andhra Pradesh to speed up the ABP rollout [4].
• July 2026 (Lok Sabha): the government said ABP is being rolled out through the BharatNet Udyami model, with ₹11,722.26 crore disbursed [6].
• 30 Oct 2026: the Tamil Nadu Utilisation Agreement was signed [1].

7. Prelims Hooks

• The Union Cabinet approved the Amended BharatNet Program on 4 August 2023 [1].
• ABP outlay is ₹1,39,579 crore; CAPEX is ₹42,847 crore [2].
• ABP is funded through Digital Bharat Nidhi [2].
• DBN is the renamed USOF, under The Telecommunications Act, 2023 [1].
• USOF was set up under the Indian Telegraph (Amendment) Act, 2003, with effect from 1 April 2002 [1].
• DBN is an attached office of DoT, Ministry of Communications. It is not under MeitY [1].
• The Tamil Nadu agreement is tripartite: DBN, the Government of Tamil Nadu and TANFINET [1].
• Tamil Nadu uses the State-led model through TANFINET, not BSNL [5].
• Tamil Nadu target: more than 5 lakh rural FTTH connections (5,27,506 households) [1][5].
• 4,767 villages in Tamil Nadu get on-demand connectivity [1].
• Central allocation for Tamil Nadu under ABP: ₹1,632 crore (excluding GST), including 10 years of OPEX [5].
• Tamil Nadu has 12,525 Gram Panchayats [5].
• The 4G Saturation Project is also funded by DBN [1].
• Jharkhand ABP scope: 4,395 GPs and 26,777 villages [3].

8. Why 'Service-Ready' Does Not Mean 'In Use'

• The cable reaches the village, but nobody plugs in
• A GP (Gram Panchayat) is called 'service-ready' when the fibre has reached it and can carry internet. That says nothing about whether anyone is actually using it.
• The CAG audited BharatNet from 2017-18 to 2022-23. It found that only 17.91% of the available bandwidth was being used [7].

• Some GPs in Andhra Pradesh, Maharashtra and Chhattisgarh were service-ready but had zero working connections. The CAG called this idle infrastructure [7].

• The national picture matches Tamil Nadu's

• The Parliamentary Standing Committee on Communications and IT found that by February 2026 only 30% of GPs had a working BharatNet connection [8].

• Tamil Nadu had 10,869 service-ready GPs but only 808 BharatNet FTTH (home fibre) connections by Dec 2025 [5]. That works out to fewer than one home connection for every ten ready GPs.

• Equipment that is not paid to run goes quiet

• Wi-Fi hotspots were installed in about 1 lakh GPs. By September 2025 only 766 of them were active [9].

• Installing equipment is a one-time cost. Keeping it working needs power, repairs and someone being paid each month. When no one owns that running cost (OPEX), the equipment stops working.

• How to read the Tamil Nadu target: to reach 5,27,506 homes, connections have to grow about 650 times from the Dec 2025 level of 808 [5]. Judge the agreement by the monthly count of active connections, not by the number of GPs that are 'ready'.

9. A Warning Parliament Gave in 2018 and Repeated in 2026

• The same weakness, flagged three times
• 2018: the Standing Committee on Information Technology, in its 50th report, warned that even after the network was built, its use 'would be extremely low'. It said this would hold back Digital India [10].
• 2025: the committee again said that use of the network was 'suboptimal' even though the infrastructure was in place [9].

• 2026: the committee's report on DBN schemes asked for more household connections and for leasing out unused network capacity [8].

• Why it kept happening: targets counted cable, not customers

• Phase-I was declared complete in December 2017. Yet about 23,261 GPs were still not connected in November 2025 [7].
• The Phase-II deadline moved from March 2019 to 2025 [7].
• Work was abandoned in 16,271 GPs across six States. The CAG linked this to poor assessment of what each place actually needed [7].

• A target like 'number of GPs connected' rewards laying cable. It does not reward getting homes to sign up.

• Why this agreement matters: the Utilisation Agreement is the first time the money is tied to use in Tamil Nadu [1]. It is a direct answer to a weakness Parliament first named eight years ago.

10. The Case Against Paying for Use, and How Strong It Is

• The strongest objection
• The CAG found misuse of funds and idle assets. BSNL diverted ₹2,001.43 crore under the CPSU-led model (since recovered), and much of the fibre sits unused [7].
• So why spend more public money, including 10 years of running costs (OPEX), on the same network? Critics would say: first fix what has already been built.

• There is also global evidence on their side. A World Bank paper notes that subsidies which make broadband available do not always make people adopt it [12].

• What the objection gets right

• Subsidy alone does not create demand. If rural homes cannot afford devices, or see no use for the internet, connections will stay low [12][11].

• The State-led model does not fix this on its own. The CAG found that dark fibre (fibre that is laid but not used or leased) went unleased partly because State Implementing Agencies had no policy or were slow to decide [7]. TANFINET is exactly that kind of agency.

• Where it goes wrong

• The money already spent on fibre is gone and cannot be recovered. Letting the network sit idle wastes it completely. Paying to connect homes is the only way to get value from it.
• The subsidy is aimed at the exact gap the audits found: bandwidth that is never used [7][1].

• Other countries pay for use too. Spain's UNICO Demanda Rural helps remote households get 100 Mbps for €35 a month and covers costs up to €600 [11].

• Fair conclusion: paying for use is the right tool. Its success depends on demand-side support (devices, digital skills, local content) and on tracking how many connections stay active.

11. What Must Happen for Tamil Nadu to Reach 5 Lakh Homes

• DoT/DBN should run a State-wise performance audit
• The Standing Committee recommended this in its August 2026 report [8].

• For Tamil Nadu, the audit should count active, paying FTTH connections, not service-ready GPs. That is the measure the CAG and the committee both found weak [7][8].

• TANFINET should lease out its unused fibre to private ISPs

• The committee asked for unused capacity to be leased [8]. The CAG found dark fibre lying unleased for lack of policy at the State level [7].

• A clear and published leasing policy lets local internet providers sell connections. This adds sellers beyond TANFINET.

• DBN should pay for each active connection, not each installation

• The hotspot experience shows the risk: about 1 lakh installed, only 766 active [9].

• Payment linked to connections that keep working each month stops the 'install and forget' pattern.

• Pair the subsidy with help on the user side, like Spain

• Spain's UNICO Demanda Rural pays part of the household's subscription cost, not only the network [11].
• The OECD notes that rural coverage alone does not lead to adoption. Affordability, digital skills and trust also matter [11].

• In Tamil Nadu, this can link with e-Governance services and the BharatNet Udyami model [6], so that local entrepreneurs sell and maintain home connections.

• Fix tendering delays before they appear

• The committee flagged slow tender finalisation, disputes with implementing agencies, weak agency capacity and late land clearances [8].
• DBN and the Tamil Nadu government should set fixed tender timelines and clear right-of-way approvals early. The Ministry itself blamed right-of-way problems for past delays [7].

12. Anchors for Answers

• Data: only 17.91% of available BharatNet bandwidth was used (CAG audit, 2017-18 to 2022-23) [7]
• Data: only 30% of GPs had a working BharatNet connection as of Feb 2026 [8]; Wi-Fi hotspots were active in only 766 of about 1 lakh GPs (Sept 2025) [9]
• Data: Tamil Nadu had 808 BharatNet FTTH connections (Dec 2025), against a target of 5,27,506 households [5]
• Report/Committee: CAG Performance Audit on BharatNet, Report No. 19 of 2026 [7]; Standing Committee on Communications and IT, report on Review of Schemes/Projects under Digital Bharat Nidhi, Aug 2026 [8]; Standing Committee on IT, 50th Report, 2017-18 [10]
• Law/Case: The Telecommunications Act, 2023 (USOF renamed Digital Bharat Nidhi) [1]
• Comparison: Spain's UNICO Demanda Rural pays for rural households' subscriptions (100 Mbps at €35/month, up to €600), not only for building the network [11]
• Scheme: BharatNet Udyami model, where local entrepreneurs deliver last-mile connections [6]; PM-WANI, where public Wi-Fi uses the BharatNet backbone

13. Mains Relevance

• GS-II: Government policies and interventions; Centre–State relations and cooperative federalism; e-Governance.
• GS-III: Infrastructure (telecom and broadband); inclusive growth.
• Possible question stems: 1. The Amended BharatNet Program shifts the emphasis from creating assets to using them. Examine with reference to the State-led model. (15 marks) 2. Rural broadband is the backbone of last-mile service delivery. Critically analyse BharatNet's achievements and bottlenecks. (15 marks) 3. How does the change from USOF to Digital Bharat Nidhi under the Telecommunications Act, 2023 change India's approach to universal service obligations? (10 marks)

14. Related Topics to Study Next

• The Telecommunications Act, 2023: the statutory basis of DBN [1].
• 4G Saturation Project: a parallel DBN scheme for mobile coverage [1].
• BharatNet Udyami model: an alternative ABP delivery channel [6].
• PM-WANI (public Wi-Fi): another last-mile access layer on top of BharatNet.
• Digital India / e-Governance: the services that fibre is meant to carry [1].
• BSNL revival: BSNL is the default implementing agency where States do not choose the State-led model [3].
• Mobile schemes for LWE, Aspirational Districts and the North East: DBN's area-targeted mandate [1].

15. NCERT Concepts to Revise

• BharatNet (Geography): The national rural fibre programme the whole agreement and its amended version are built on.
• Cooperative federalism (Polity): The State-led model, with the Centre, state and its agency as partners, is the note's federalism angle.
• Comptroller and Auditor General (Polity): CAG audit found idle fibre and unused bandwidth, which is the core argument for paying for use.
• Standing committee (Polity): Parliamentary committees repeatedly flagged low use of BharatNet and recommended leasing unused capacity.
• Digital divide (Geography): Rural home fibre aims to narrow the gap in internet access between villages and cities.
• Subsidy (Economy): The agreement's new feature is a Centre subsidy for using the network, not just building it.

16. Common Errors / Trap Areas

• Wrong ministry: BharatNet and DBN come under DoT, Ministry of Communications, not MeitY [1].
• Wrong legal basis: USOF came from the 2003 amendment to the Telegraph Act, effective 2002. DBN comes from the Telecommunications Act, 2023 [1].
• BharatNet vs ABP: BharatNet is the existing network. ABP (2023) is the amended programme to upgrade and expand it [1].
• Building vs using: the Tamil Nadu document is a Utilisation Agreement. Its new feature is subsidy for using the network [1].
• Implementing agency: in Tamil Nadu it is TANFINET, not BSNL. In Jharkhand, BSNL is one of the parties [5][3].