Public Wi-Fi is one of the affordable ways by which users get access to the Internet apart from their subscription to mobile or fixed line broadband services. The public Wi-Fi hotspots in India is around 0.5 million out of which 0.18 million is registered under PMWANI programme.
According to Statista, public Wi-Fi hotspots per million population in the UK, US and China are respectively 175, 50 and 75 times that of India.
Noting the lack of public Wi-Fi infrastructure in India, the Telecom Regulatory Authority of India (TRAI) initiated the discussions on an open Wi-Fi access protocol in 2016-17 and conducted many stakeholder meetings. The TRAI recommended an open common specifications referred to as “Wi-Fi Access Network Interface (WANI)” in 2017. The WANI exhibits characteristics of a Digital Public Infrastructure (DPI) to provide affordable broadband.
Subsequently, the Centre launched the Prime Minister WANI (PMWANI) scheme in December 2020 for improving affordable Wi-Fi access to people. The model envisioned setting up of public Wi-Fi hotspots in Public Data Offices (PDOs) by local entrepreneurs with methods for monetising Internet access and at the same time providing affordable Internet access to users. However, the PMWANI scheme has met with only limited success.
The major cost for setting up the PDO is the Internet backhaul charges. While the local entrepreneur can procure and install Wi-Fi access points, she has to depend on procuring the Internet bandwidth from the Telecom and Internet Service Providers (TISPs). The TISPs provide commercial resale of Internet backhaul only through Internet Leased Line (ILL) service.
However, the TISP themselves provide Wi-Fi access through their fixed line home Internet broadband services. Resale of this broadband services by the home owners on commercial terms to PDOs is prohibited. On the other hand, the ILL service to PDOs is in direct competition to the TISPs’ home broadband services. This results in an equilibrium wherein TISPs provide ILL at high prices to the PDOs. As a result, PDOs are not able to break-even and hence exit the market, leading to a PDO monopoly. Though the TRAI recommendations clearly indicate that the PDOs shall multi-home on more than one TISPs for their backhaul connectivity thereby providing quality Wi-Fi access at affordable prices, this has not happened.
Now the moot question is why are there no regulations for ILL charges or separate backhaul tariff category for PDOs to sustain? First, due to consolidation in the telecom industry, the number of TISPs in a geography has reduced considerably thereby limiting competition in the Internet backhaul provisioning. Second, is the evolution of telecom tariff regulation in India over the years, from ‘fixation of tariffs’ regime to ‘tariff forbearance’.
Currently, except for the ceiling tariffs for select services such as national roaming, and fixed rural telephony, the tariffs for all other telecom services are under forbearance. In accordance with the policy of ‘light-touch regulation’ being followed, the forbearance tariff framework gives the TISPs, the freedom to design the tariffs according to the prevailing market conditions. With limited competition, this has led to increase in tariff being charged by the TISPs for the ILL services.
Our research on the simulation of the two types of Internet backhaul connectivity for PMWANI namely, (i) home broadband and (ii) Internet leased line (ILL) clearly indicates that the high tariff for ILL is the main reason for the unsustainability and demise of PDOs in the country. Hence the reasons for the poor Wi-Fi penetration even under the PMWANI scheme. One might argue that the type of infrastructure required for home broadband and ILL are different and hence the differential charges for these two are as per the corresponding cost elements. However, the ILL charges are a staggering 30-40 times that for home broadband service for the same bandwidth, calling for a regulatory intervention.
One option is to provide Viability Gap Funding (VGF) from the Universal Services Obligation Fund (USOF) to the loss making PDOs for certain number of years with obligation of quality, coverage etc.However, our research on economic sustainability of PMWANI indicates that the VGF will result in (i) reducing incentives for the PDOs to efficiently operate and (ii) increase in tariff soon after VGF ends, resulting in unsustainability.
So a price cap on ILL for PDOs, that is marginally more than the average charges for the home broadband, is required for making the PMWANI scheme sustainable. However, the PDOs shall also be subjected to periodical audits to make sure that this lower ILL charge for PDOs is not being mis-used (e.g., further re-sale for purpose other than offering WiFi services under PMWANI programme).
To achieve the target of 50 million public W--Fi hotspots as per 6G Vision document by 2030 the proposed regulatory intervention is necessary.
The writer is Professor, IIIT-Bangalore