New Delhi, Nov. 27 -- At a time when private telcos are battling rising costs, shrinking ARPUs, and 5G monetisation puzzles, Kerala Fibre Optic Network (KFON), one of India's largest state-owned digital backbones, has reached a scale few government-led connectivity projects have achieved. The state-run fibre grid that now spans 32,000 km connects some of India's most remote tribal hamlets, and is gearing up to offer OTT, IPTV, and VNO services at scale. As the company prepares to transition from a pure connectivity utility to a full-fledged digital services provider, TechCircle spoke with Dr. Santhosh Babu IAS (Retd.), Managing Director of KFON, on how the state built this infrastructure, how the project plans to monetise its next phase, and why women-led last-mile teams may define the next phase of the rollout.

A backbone built on shared infrastructure

Kerala's biggest advantage, Dr. Babu explains, was its ability to "piggyback" on the Kerala State Electricity Board (KSEB). KFON now runs 32,000 km of fibre across the state-2,600 km of OPGW on high-voltage lines and over 29,000 km of ADSS fibre on distribution networks.

"What made this possible was the government's blanket order exempting us from per-post or per-kilometre fees-issues that delay every private operator," he says. With KSEB and KSITIL each owning 49% of the company, and the state holding 2%, the power utility has a direct stake in ensuring friction-free rollouts, including Right of Way.

Ironically, the only real delay factor wasn't bureaucracy but Kerala's own social rhythm. "Our shutdown windows depend on exams, festivals, and events. That has been the toughest operational hurdle," he says.

With Rs.336 crore in equity and over Rs.1,000 crore in KIIFB loans, KFON maintains financial discipline. The model, Dr. Babu insists, can scale nationally: "Any state with a strong power utility can replicate this. Shared infrastructure isn't just efficient-it's the only way to reduce national connectivity costs."

From connectivity to bundled digital platforms

KFON is now moving up the value chain. Kerala consumers increasingly expect bundled digital services-broadband, TV, OTT and voice. "Initially, it was hard to convince people to take only fibre and wait," he says.

KFON has launched an OTT platform with 250 channels and 29 apps. It has applied for a VNO licence and plans to roll out IPTV within 6-8 months, though smart TV penetration of 30-40% remains a constraint. Competition with private telcos is inevitable, but KFON is focusing on reliability. "We must match or exceed private telcos. That means 99.5% to 99.9% uptime," he says. Once IPTV and VNO services go live, ARPUs and customer stickiness are expected to improve.

A cautious fibre-leasing strategy

Of the nearly 30,000 km of dark fibre available, KFON has leased out 7,000 km-by design. "Leasing fibre seems like easy revenue, but we never want to empower competition in areas where we plan to serve customers," he says. KFON prioritises leasing in regions where it has no long-term retail ambitions. Even so, the additional fibre in circulation has led to more ISP competition, better reach, and lower broadband prices. Despite Kerala's 124% wireless penetration, fibre sits at just 25%-a gap KFON sees as its public mission to close.

Cybersecurity at the centre of operations

With governance, education, and healthcare increasingly dependent on KFON, cybersecurity is a top priority. "We've had intrusion attempts," Dr. Babu says. The network now has advanced DDoS protection, a next-generation firewall, and is undergoing a full cybersecurity audit. A 24/7 Security Operations Center is being set up. "Protecting data of 1.4 lakh customers is part of public trust. Data sovereignty is essential," he says.

Women-led last-mile

KFON's earlier reliance on 3,500 cable operators hit a bottleneck-many remained inactive, partly because KFON's 50-60% commission structure is lower than private rivals. The turning point came with She Teams. "This industry has always been male-dominated. We believed women could bring a new energy," he says.

Women aged 18 to 60 are trained to handle everything-from pole-climbing and fibre splicing to OTDR testing and customer onboarding. The early response, he notes, has been "phenomenal." "My preference is for women to take full ownership. This can become a national model-creating entrepreneurs and accelerating last-mile expansion," he says.

The road ahead

KFON's ambition goes beyond connecting 30,000 government offices. "We want 100% fibre for all 1.14 crore households," Dr. Babu says. Some of the most meaningful progress has come in remote tribal regions-Kottoor, Wayanad, Attapadi-where over 500 households now have broadband for the first time. "Private ISPs won't go there. For us, it's a moral responsibility," he says.

KFON is equipped to handle 10 lakh connections today, but the goal is universal coverage-supported by reinvested profits and partnerships.

"With 100% digital literacy, Kerala can be India's first fully fibered state," he says. "And that can become a template for India's digital public infrastructure-universal access, community empowerment, and people shaping their own digital futures."

Published by HT Digital Content Services with permission from TechCircle.