DBN, Andhra Pradesh sign pact to roll out Bharatnet in state with Rs 2,432 cr financial support

Digital Bharat Nidhi (DBN), the Government of India, the Andhra Pradesh government, APBIL (Andhra Pradesh Broadband Infrastructure Limited), BSNL, and APSFL ...

What Happened

Digital Bharat Nidhi (DBN), the Government of India, the Andhra Pradesh government, APBIL (Andhra Pradesh Broadband Infrastructure Limited), BSNL, and APSFL (Andhra Pradesh State FiberNet Limited) signed a multi-party agreement to implement the Amended BharatNet Programme in Andhra Pradesh.
The Union Government committed Rs 2,432 crore as financial support for the rollout, which is expected to enable more than five lakh (500,000) rural home fibre connections across the state.
The Amended BharatNet Programme was approved by the Union Cabinet on August 4, 2023, and aims to upgrade, consolidate, and expand the existing BharatNet network to provide future-ready broadband infrastructure to gram panchayats and villages on a demand basis.
The pact was signed in May 2026, marking a significant step in rural digital connectivity for Andhra Pradesh.

Static Topic Bridges

Universal Service Obligation Fund (USOF) and Digital Bharat Nidhi (DBN)

The Universal Service Obligation Fund (USOF) was originally established under the Indian Telegraph Act, 1885, as amended in 2003 to give it statutory status. USOF was constituted to fund initiatives that extend telecom connectivity to rural and underserved areas. The fund is generated by a 5% Universal Service Levy charged on all telecom service providers' Adjusted Gross Revenue (AGR). The Telecommunications Act, 2023 rechristened USOF as Digital Bharat Nidhi (DBN), broadening its scope to fund any technology-related universal service obligations — not just telephone connectivity.

USOF established: Under Indian Telegraph Act, 1885 (amended 2003 for statutory status).
Funding mechanism: 5% Universal Service Levy on telecom operators' Adjusted Gross Revenue (AGR).
Renamed to Digital Bharat Nidhi (DBN): Under Telecommunications Act, 2023.
DBN's mandate expanded beyond telephony to include broadband, internet, and emerging technologies.
DBN is administered by the Department of Telecommunications (DoT), Ministry of Communications.

Connection to this news: DBN is the funding vehicle for the BharatNet Amended Programme. The Rs 2,432 crore committed for Andhra Pradesh is drawn from DBN resources — making the Telecom Act 2023 and the USOF-to-DBN transition directly relevant to this announcement.

BharatNet Project — Phases and Architecture

BharatNet is one of the largest rural broadband infrastructure projects in the world, implemented to connect approximately 2.5 lakh Gram Panchayats (GPs) across India with optical fibre, enabling non-discriminatory broadband access to all telecom service providers. The project is executed by Bharat Broadband Network Limited (BBNL), a Special Purpose Vehicle incorporated in February 2012.

Phase I: Completed December 2017; connected over 1 lakh GPs (scope later expanded to 1.25 lakh GPs).
Phase II: Connects GPs through multiple models — State-led, Private Sector, and CPSU; includes last-mile Wi-Fi/broadband connectivity.
Phase III: Future-proofing through 5G integration, higher bandwidth capacity, and robust last-mile connectivity.
Amended BharatNet Programme (August 2023): Approved by Union Cabinet; targets optical fibre connectivity to 2.64 lakh GPs in ring topology, plus remaining non-GP villages on demand.
As of March 2025: 2,18,347 GPs made service-ready under BharatNet.
Executing SPV: Bharat Broadband Network Limited (BBNL), incorporated February 2012.

Connection to this news: The Andhra Pradesh pact falls under the Amended BharatNet Programme (2023 Cabinet approval), which represents Phase III's demand-driven village-level extension — going beyond GP headquarters to reach rural homes directly via fibre.

Cooperative Federalism in Digital Infrastructure

The BharatNet-Andhra Pradesh pact is a multi-stakeholder agreement involving the Centre, the state government, state PSUs (APSFL), and central PSUs (BSNL), exemplifying the cooperative federalism model in infrastructure delivery. Concurrent implementation by state-level entities ensures last-mile accountability while Centre-funded DBN provides the capital base.

Parties to agreement: DBN, Union Government, Andhra Pradesh government, APBIL, BSNL, APSFL.
Financial model: Centre provides Rs 2,432 crore via DBN; state entities contribute implementation capacity.
Target: 5 lakh+ rural home fibre connections in Andhra Pradesh.
Connectivity approach: Demand-based rollout to gram panchayats and villages.
BharatNet aligns with Digital India mission's Pillar 2 (Universal Access to Phones and Broadband).

Connection to this news: The involvement of APSFL (a state fibre entity) alongside BSNL (a central PSU) and DBN funding reflects the hybrid Centre-State model that is now the standard for large-scale rural digital infrastructure — a testable theme for GS2 (federalism) and GS3 (infrastructure).

Key Facts & Data

Digital Bharat Nidhi (DBN): Successor to USOF; renamed under Telecommunications Act, 2023.
USOF funding: 5% Universal Service Levy on telecom operators' AGR; statutory basis from 2003 amendment.
BharatNet SPV: Bharat Broadband Network Limited (BBNL), incorporated February 2012.
Total GP target (BharatNet): ~2.5 lakh Gram Panchayats; 2,18,347 GPs service-ready as of March 2025.
Amended BharatNet Programme: Approved by Union Cabinet on August 4, 2023; targets 2.64 lakh GPs in ring topology.
Andhra Pradesh pact: Rs 2,432 crore Union Government financial support via DBN.
Expected outcome: 5 lakh+ rural home fibre connections in Andhra Pradesh.
Parties: DBN, GoI, Andhra Pradesh government, APBIL, BSNL, APSFL.
BharatNet Phase I completed: December 2017 (1+ lakh GPs).