Trai proposes capping data rates under PM Wani

In a bid to boost the PM-Wani initiative, the telecom regulator has proposed capping broadband connectivity costs of Wi-Fi service providers or `public data offices’ (PDOs) at twice the applicable rate for retail home broadband services.

The regulator’s call disregards carriers’ apprehensions that lowering such broadband connectivity costs would allow PDOs to make money, riding on expensive network infrastructure built by telcos, denting the latter’s revenues.

On Wednesday, the Telecom Regulatory Authority of India (Trai) said its proposal to cap the rates charged from PDOs would incentivise and compensate operators to expand their support for PDOs.


Such pricing, it added, also recognised that PDOs act as “resellers of bandwidth” and have potential to generat revenue from multiple customers.

The regulator’s logic is that rationalisation of broadband connectivity costs for WiFi service providers can break the logjam and finally result in PM-Wani gaining traction more than four years after its launch. It, though, added that the proposed pricing arrangement may be reviewed after two years.

Towards this, the regulator released a fresh draft tariff amendment order. Deadlines for stakeholder comments and counter-comments are January 31 and February 7 respectively.

“The Authority feels the tariff framework should be such that it promotes proliferation of PM-Wani, safeguarding the interests of PDOs, particularly smaller PDOs, ensuring their sustainability and viability within the ecosystem.

Trai has justified its call for lowering broadband connectivity costs of WiFi service providers on grounds that the average data usage per PM-WANI hotspot is lower (200 Mbps) than a FTTH home broadband connection (200-500 Mbps). “This strengthens DoT’s view of low proliferation of PM-Wani, and supports the argument that the internet connectivity cost charged by service providers from PDOs, has to be rationalised for increasing the data usage for the PM Wani hotspot,” the regulator said in its Draft Telecommunication Tariff (71st Amendment) Order.

Over the past months, a bitter duel has involved telecom and internet service providers (ISP) on one side and tech companies on the other, over the government’s Wi-Fi hotspot initiative under the PM-Wani framework.

The telcos believe Wi-Fi providers or PDOs, supported by big tech companies, can set up a parallel Wi-Fi network without any network and licence fee implications, hurting the business of ISPs and telcos. Telcos have also previously said they are best positioned to offer public Wi-Fi hotspots directly, and had pointed to their networks’ vast proliferation and the low cost of mobile data.

Tech companies, though, have rejected such apprehensions, saying that proliferation of PM-Wani could end up boosting revenues of telcos and ISPs. This, since they believe telcos can potentially earn extra revenue annually from bandwidth sales in addition to gaining more broadband users.

When the PM-Wani scheme was launched five years ago, it had envisioned creating 10 million public Wi-Fi hotspots by 2022 and further 50 million by 2030. According to Trai, a key reason behind the low proliferation level is the high cost of backhaul internet connectivity charged by telcos and ISPs from PDOs.

Key objectives of the PM-Wani initiative were providing high-speed and affordable internet access in rural and underserved areas as well as in public spaces such as railway stations, banks and post offices amongst others.

Local shops, retailers, chaiwalas, kiranawalas and storekeepers were encouraged to become public Wi-Fi providers, or PDOs, for last-mile internet delivery without the need of a permit or registration fee.