Telcos cagey about govt's plans to set up free wi-fi hotpots

Concerns include high cost of setting up infrastructure, hurdles from local authorities and financial unviability

The government has tweaked some policy terms to speed up the rollout of Wi-Fi hotspots in public places. However, telecom operators have expressed reservations about the government's intent. They argue that putting up such public networks will require huge infrastructure and financial support. Contrary to the government’s plan to cover 25 cities in entirety, telcos feel these spots can only be successful at select popular locations within the city.

According to the tweaked policy, internet service providers with more than Rs 100-crore annual revenue will now be able to apply for the central government’s project to set up Wi-Fi hotspots across the country. The department of telecom is in process of inviting expression of interest from the companies.

Earlier this month, the government had proposed a new policy to speed up the rollout. It plans to set up the facilities in 25 major cities by June 2015 initially by empanelling three to four operators. The cities will have Wi-Fi connectivity with a speed of at least 2 megabytes per second.

According to a telecom industry official, there is no business case for free public Wi-Fi networks unless the government takes cares of a few conditions being set by the telcos.

“The city or state administrative bodies have to exempt Right of Way (RoW) charges, which involves paying to local municipal authorities for laying cables and putting up other equipment.” Usually, operators have to pay rent to municipal authorities for use of property while putting up towers and the switches. Even if the rent is exempted, the service tax is still charged on the actual cost. “This should be exempted too,” the official said.

Another demand of the telcos is to share the infrastructure with other operators since it takes huge cost to put up these networks and until sharing of infrastructure is allowed, the business model may not be viable.

“The government also has to remove the license fee on internet and broadband — which has been a long-standing demand of the industry,” the person said. The operators are also not certain if such services will be popular among the consumers, and if they would pay for the service after the free service is exhausted. In fact, one of the operators that has already implemented a hot-spot in Delhi said their company was not hoping to make money from the project initially as it just a "pilot" for them. The company is ascertaining the business viability of putting up such a network.

Another official working with a leading operator said not just the Central government but every (state) government is talking about putting up large Wi-Fi hotspots, which may not be possible. However, doing the same in specific locations within the city is surely feasible.

Globally, no one has been able to implement projects on such large scale. Such networks only work within a radius of a few kilometres. But, the governments here are looking at city-wide networks, the official added.

Setting up a hot-spot requires massive work in terms of getting RoW permissions, laying and trenching of cable incurs significant cost, and there are bandwidth issues. “Therefore, we are only focusing on high footfall areas such as malls, pubs, etc,” another official said.

According to the government proposal, the operator that will get the contract will have to implement, integrate and commission the citywide Wi-Fi network that would be offered to the government or the citizens on pay-per-use basis. The firm will have to take care of the maintenance and technical support for five years. However, the government will facilitate RoW permissions for installation of equipment and antennas. Operators have to pay a monthly rent to municipal authorities for putting up their network infrastructure on their premises.