Telcos raise concerns over Digital Bharat Nidhi use

Time of India

06-07-2025

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.
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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.