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Business Standard
07-07-2025
- Business
- Business Standard
Telcos raise concern over Digital Bharat Nidhi fund diversion to R&D
India's telecom operators have raised objection to the government's move to divert a portion of the Digital Bharat Nidhi (DBN) towards research and development (R&D) activities, arguing that it deviates from the fund's original mandate and lack of transparency in allocation. In a letter addressed to Telecom Secretary Neeraj Mittal, as seen by The Economic Times, operators flagged concerns over using DBN resources, which are funded primarily through levies on telecom and internet service providers, for R&D initiatives undertaken by public sector entities and academic institutions, including the Indian Institutes of Technology (IITs). What is the Digital Bharat Nidhi? The Digital Bharat Nidhi (DBN), formerly known as the Universal Service Obligation Fund, is a government-administered pool aimed at financing telecom infrastructure in underserved rural and remote areas. The fund is maintained through a 5 per cent levy on adjusted gross revenue (AGR) from telecom and internet service providers (ISPs). As of December 2023, the DBN corpus stood at ₹86,356 crore. OTT disproportionately gain from R&D: Telcos Telecom operators have raised concerns over the government's move to allocate 5 per cent of the DBN corpus to research and development (R&D). The argument of the telecom companies is that the contributor base remains limited to telcos and ISPs, while over-the-top (OTT) platforms, key beneficiaries of broadband expansion, are excluded from making contributions. The Cellular Operators Association of India (COAI), representing the major telecom players, argued that while R&D is valuable, it falls outside the scope of DBN's original objectives. They highlighted that private telecom firms are being required to support activities that do not necessarily yield direct benefits to them. Telecom cos criticise lack of transparency Operators also criticised the non-transparent allocation process, pointing out that most of the DBN's R&D funds have gone to a handful of institutions like the IITs without open or competitive bidding. They stressed that these premier institutions make up a small fraction of India's engineering education ecosystem and already receive significant public funding, reportedly around ₹8,000 crore in FY22. In their letter, telcos urged the government to ensure equitable access to R&D funding across a broader range of qualified institutions, rather than focusing funding on a select few. They also demanded that intellectual property generated through DBN-funded research be shared transparently with contributing telecom firms and not retained as proprietary assets by the research bodies. They also called for the selection of implementing agencies to be governed strictly under the DBN Rules, 2024, and insisted on industry representation in the decision-making process.
Time of India
06-07-2025
- Business
- Time of India
Telcos raise concerns over Digital Bharat Nidhi use
New Delhi: Telecom operators have opposed the use of Digital Bharat Nidhi (DBN) funds for research and development (R&D) purposes, particularly by public sector units and select institutions like the Indian Institutes of Technology ( IITs ), saying the move goes against the reasons why the corpus was created in the first place. In a letter to telecom secretary Neeraj Mittal, telcos stressed that the foundational purpose of DBN, earlier called Universal Service Obligation Fund , was to support deployment of telecom networks in uncovered rural and remote areas. It was meant to relieve telcos and internet service providers (ISPs) of their individual obligations to roll out services in unviable regions. To make it happen, telcos and ISPs contribute 5% of their adjusted gross revenue to the DBN. As of December last year, the DBN had a fund balance of ₹86,356 crore. Now 5% of DBN is earmarked for R&D but the contributors remain the same and over the top (OTT) platforms, which are major beneficiaries of broadband proliferation, don't have to contribute. The telcos, through Cellular Operators Association of India (COAI), wrote to the government that while R&D was strategically important, it traditionally fell within the domain of academic and research institutions and did not directly align with the DBN's foundational purpose. "As a result, TSPs/ISPs are compelled to contribute significantly towards activities that may not offer them any direct or tangible benefit," the COAI said in the letter. Live Events The telcos further stressed that allocation of funds to public sector units on nominating terms effectively results in cross-subsidy from private players to them. Besides, the majority of DBN allocations for R&D have been directed to a few institutions like IITs, without a transparent selection mechanism like open bidding or competitive bidding. "While IITs are esteemed institutions, they represent less than 0.4% of the engineering colleges in India. Moreover, institutions such as the IITs already receive substantial government funding, approximately ₹8,000 crore annually, as of FY22," the letter said. The telcos want that DBN allocations should be done in a manner to ensure equal allocation to all the technical, R&D and engineering institutions which are equally worthy, and are capable of good quality research and development work. Further, the intellectual property rights and products developed using DBN-funded R&D must be made accessible to contributing telcos and ISPs in a transparent manner. "These outputs should not be treated as private assets by the R&D institutions or individual researchers," the letter said. It added that the selection of implementing agencies for R&D funding must adhere to the process as per the DBN Rules, 2024 and telcos, who are the major contributors towards the fund, should be involved in the selection process.
