NEW DELHI: The government has proposed a subsidy of Rs 3,600 crore to private telcos such as Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio through viability gap funding, for setting up Wi-Fi in rural areas as part of the second phase of the BharatNet project, set for a launch Monday.With Phase 1 of BharatNet set to complete by the end of 2017 – which will give fibre connectivity to 1 lakh gram panchayats at an investment of Rs 11,200 crore – the government intends to double the fibre to 20 lakh km by March 2019 under phase 2 of the project, with an overall investment of Rs 34,000 crore.The telecom department (DoT) will also sign pacts with Maharashtra, Gujarat, Chhattisgarh, Andhra Pradesh, Telangana, Tamil Nadu and Jharkhand that will roll out Phase 2 of BharatNet on their own with partial funding from the government."We will launch phase 2 of BharatNet tomorrow to connect 1.5 lakh gram panchayats with high-speed broadband by March 2019. Phase 1 of the project, under which 1 lakh GPs were to be connected, will be completed by the end of this year. We expect telecom operators to provide at least 2 megabit per second speed to rural households," telecom secretary Aruna Sundararajan told reporters on Sunday.Under the project, connection points or exchange for optical fibre will be set up at each panchayat. Thereafter, carriers can buy connection or bandwidth from the government to sell the same in rural areas.Sources said Airtel has already connected its 4G broadband network using BharatNet’s optical fibre in live sites of Madhya Pradesh and Rajasthan.Airtel plans to utilize Bharatnet’s optical fibre network in around 30,500 gram panchayats, for which it has already started the survey and feasibility study in a large number of villages."India, at present, has 38,000 Wi-fi hotspots. Under BharatNet phase 2 , around 6-7 lakh Wi-fi hotspots will be added with 2-5 hotpsots in each panchayat. Some of the Wi-fi hotspots may not be commercially viable initially. So, we will provide viability gap funding of around Rs 3,600 crore to telecom operators," the secretary said. The total cost of the project will be around Rs 10,000 crore.The secretary added that the government wants to dramatically increase the number of Wi-Fi hotspots under phase 2, for which it is prepared to give partial funding to private players, which may be telcos, internet service providers or others.Under BharatNet phase 1, the government has set up 15,000 Wi-Fi hotspots, of which around 11,000 are in rural areas and the rest in semi-rural. After the completion of phase 2 by 2020, the hot spots should cover 100 million people, the secretary added.For taking broadband services to the masses using Bharat Net, the government expects investment and coverage commitments from carriers like Bharti Airtel, Vodafone India, Idea and Jio. The companies did not comment on the details of their plans as of Sunday evening.“The additional optic fibre will provide bandwidth to telecom players, at bulk rates which are 75% less than the rates at which they currently buy,” she added, underlining the enhanced ability of carriers to deliver digital services such as payments, education and health through the Bharat Net network by installing the last mile network.The services will be offered at low rates, given the scale of competition in the sector, further fuelled by the low-cost of the back-end network that the telcos would get, Sundararajan added.The government aims to bridge digital divide in rural and remote areas of the country by providing affordable broadband at minimum 100 Mbps speeds through robust network infrastructure through the Rs 45,000 crore Bharat Net programme, which was earlier known as National Optical Fibre Network (NOFN).The network under phase 2 will have a mix of underground fibre, aerial fibre, radio and satellite media as per modifications rather than only by underground fibre, which was the initial strategy. The ambitious project has rugged and low-maintenance equipment manufactured domestically, on technology created by government-backed C-DoT.Once completed, the government believes BharatNet can add around Rs 4.5 lakh crore to the national gross domestic product, basis an ICRIER study which suggests that every 10% usage of Internet in India drives up GDP by 3.3%.Under the second phase, BSNL will roll out optical fibre in eight states -- Assam, Haryana, Madhya Pradesh, Rajasthan, Uttar Pradesh, West Bengal, Jammu and Kashmir and Sikkim that were not covered under the first phase of Bharat Net. Meanwhile, Power Grid Corporation of India will set up the network in Himachal Pradesh, Uttarakhand and Odisha.