Some private telecom players have opposed the Government’s plans to set up Wi-Fi hotspots in nearly 2.5 lakh Gram Panchayats. The companies have told the Ministry of IT & Communications that the Government would do well to utilise existing telecom infrastructure in these villages instead of creating parallel networks. The ambitious Wi-Fi connectivity project is estimated to cost Rs 4,000 crore.

Speaking to Business Line, C. S. Rao, President, Association of Unified Telecom Service Providers of India said, “This is a waste of money. Wi-Fi is not an outdoor technology. I don’t see why the Government has to put in more money when we have mature and tested technologies such as 3G and GPRS.” AUSPI is an industry body representing Reliance Communications, Tata Teleservices and Sistema Shyam.

Initiated by the Ministry of Rural Development, the project has been linked to the Department of Telecom’s National Optical Fibre Network (NOFN), which is being rolled out to expand high-speed broadband services to villages.

According to the proposal, the initial funding to create the Wi-Fi zones will come from the Universal Service Obligation Fund, which pools the cess levied on telecom companies to provide rural connectivity.

The annual operational expenditure of around Rs 2,000 crore will be funded by the Rural Development Ministry.

‘Direct subsidy’

While the optical fibre network will be rolled out up to the Gram Panchayats, the last-mile connectivity will be given to villagers using Wi-Fi routers.

Every Gram Panchayat will be connected by a 100 Mbps line. This means that if 10 users latch on to a Wi-Fi hotspot, each user will get 10 Mbps each.

“If the Government wants to enable broadband in rural areas then, instead of investing in infrastructure, which is already there, they should give subsidy directly to the villagers,” Rao said.

Government officials, however, said that the project was being envisaged because the private players have not rolled out services to unviable areas. “Private operators roll out (networks) to areas only where there is a business case. The Wi-Fi project is not aimed at generating revenues. It is more to proliferate broadband usage,” the official said.

Other projects for giving direct subsidy to users are being rolled out, the official pointed out. For example, under a new scheme, beneficiaries will get a phone and a connection by paying a one-time fee of Rs 300. Villagers will be given a free recharge of Rs 30 (Re 1 a day), which will entitle them to 30 minutes airtime, 30 SMS text messages, and 30 MB of data usage a month.

(This article was published on December 2, 2013)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.