India May Enlist Private Sector in $5.9 Billion Internet Network

India is considering tapping the private sector to help complete a $5.9 billion rural broadband project after years of delays, potentially opening opportunities for companies such as Cisco Systems Inc.

Prime Minister Narendra Modi will review a government report on working with private companies to build the network, Department of Telecommunications Secretary Rakesh Garg said Wednesday in a New Delhi interview.

That may be the best way to speed plans to connect 250,000 village clusters to the Internet. Until now, state-owned companies, so-called Public Sector Undertakings, have been in charge of laying the fiber optic cables to villages around the country. The program was supposed to be completed by 2013 and has so far reached 20,000 villages.

“Going through the PSUs may not be sufficient,” Garg said. He didn’t specify any potential private-sector participants by name.

Modi’s government is trying to encourage greater private-sector participation in building Indian infrastructure. His budget for the current fiscal year includes a corporate tax cut and more money for roads, bridges and power plants, while the central bank has lowered interest rates twice this year to spur bank lending.

Getting more Indians online is key to Modi’s $18 billion Digital India campaign to transform the nation from a service to knowledge economy and boost growth generally.

The report Modi is considering also examines the possibility of allowing individual states to build their own networks with money allocated by the central government.

“The same system will not work everywhere,” Garg said.

The decision as to whether to allow private companies to help build the broadband network will come in the next five to six months, Garg said. The government aims to complete the broadband project by March 2017.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE