ITI, Sterlite Tech bag L1 status for BharatNet orders, reviving interest in shares of optic fibre plays

BharatNet Phase 3 is expected to significantly ramp up India's optic fibre services rollout.

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26 Aug, 2025 12:21

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Shares of ITI, HFCL, Sterlite Tech and Tejas Networks are in high demand, rising by as much as 8%, after ITI and Sterlite Tech informed on November 8 that they have emerged as lowest bidders for orders of optic fibre networks under the BharatNet phase 3.

L1 Bidders

Shares of Sterlite Tech are higher by 5% after emerging as the lowest bidder to develop the middle-mile network of Jammu and Kashmir, under the BharatNet Phase - 3, the company informed stock exchanges on November 8. The size of the order is Rs 1625.36 crore and Sterlite Tech will be required in the development (Creation, Upgradation and Operation & Maintenance) of the middle-mile of the optical fibre network in the state. The project involves three years to complete and another 10 years in maintenance contract.

The consortium of companies led by ITI has emerged as the lowest bidder (L1) for projects by BSNL in two states, with orders totalling up to Rs 3,022 crore, the company informed on November 7.

Large Orders in the Pipeline

Last year, the Cabinet had approved an outlay of Rs 1.39 lakh crore for BharatNet, a government project for last-mile connectivity across 6.4 lakh villages. Under this, BSNL had invited tenders for the middle-mile network of the BharatNet project in 16 circles, and tenders for 11 packages have opened till now. The telecom capex play under the BharatNet programme and 5G expansion by private enterprises has increased investor interest in these shares.

State-run BSNL had floated a tender worth around Rs 65,000 crore to implement the third phase of the BharatNet project, earlier this year. This phase of rural internet connectivity under the BharatNet project will target to bring all 6.4 lakh Villages, Blocks, and Gram Panchayats online with high-speed broadband internet connectivity.

The middle-mile connectivity will involve private players to operate and maintain the project for 10 years, and the last-mile connectivity, which is village-to-household, will be provided through the 'Udyami' model of village-level entrepreneurs who will help the government to take the fiber connections to the homes on a 50:50 revenue-sharing basis.

BharatNet Phase 3 is expected to significantly ramp up India's optic fibre services rollout.

The DoT had previously stated the target of 100% broadband connectivity in villages, 70% fiberisation of towers, and ramping up average broadband speeds of 50 Mbps, along with 50 Lakh kms of optic fibre rollouts by December.

Demand Drivers

Companies in the business of optic fibre service are betting on a rising demand, Sterlite Tech has said, helped by a declining inventory with customers and rising government spending
on connectivity projects.

ITI is projecting an increased adoption of Fiber-to-Home connectivity, helped by government initiatives like Digital India, Smart Cities, and Bharatnet Project. Centre has also allocated Rs 2158 crore for optical fibre cable network for defence services, and Rs 716 crore for telecom projects in the north-eastern states.

Moreover, a growing number of data centres in India too is expected to fuel this growth further. An ICRA note sees India's data centre capacity reaching 2,000-2,100 megawatts (MW) by FY27, which implies an anticipated investment of up to Rs 55,000 crore.

Telecom equipment maker HFCL has said that it is starting to overseas orders as well. "The Company has started receiving global enquiries for optic fiber cables indicating early signs of recovery in the coming quarters," Mahendra Nahata, Managing Director, HFCL had said after the September quarter earnings.

Tejas Networks too mentioned the ramp up for BSNL’s pan-India network as a growth driver during its quarterly earnings call. Tejas said its wireless business has received additional orders for 4G sites in a few circles and a Proof of Concept is underway too, for the 5G upgrade in the 4G band for BSNL.

The DoT has also brought in a clause of preferential treatment to domestic companies in its public procurement policy order, in order to boost local manufacturing of 5G equipment.