Ease telecom regulations to enable Wi-Fi proliferation

In most developed countries, the majority of data consumption takes place over Wi-Fi access points. In India, things are slightly different—well over 90% of users access the internet through mobile devices. Which is why even though the number of Indian data users has grown, patterns of data consumption remain asynchronous. Users switch on data services when they want to download content, and switch it off soon after, so that they can consume it offline without worrying about running up high data charges.

For the most part, this mobile-first approach was forced on us by last-mile constraints. The congestion of our cities and the often-insurmountable effort of getting all the rights of way necessary to lay the cables required to get data connections into all the nooks and crannies of our cities was too challenging even for our dauntless telecom companies. And so, India’s data revolution took place on the back of its mobile network. By delivering broadband data over the interlocking grid of radio towers that blankets the nation for voice coverage, telecom firms managed to dodge the last-mile problem.

Though we’ve adapted to this mode of data consumption, the lockdown has exposed the problems inherent in an over-reliance on mobile data. It is now clear that we need to supplement our mobile data networks with reliable terrestrial broadband that can be delivered through a network of easily accessible Wi-Fi hotspots.

Last week, the cabinet approved the Prime Minister Wi-Fi Access Network Interface (PM Wani), a policy that can radically alter the way data services are delivered at the edge of networks. When coupled with the deregulation of Wi-Fi services, I believe this policy will facilitate the rapid proliferation of internet hotspots in India.

At present, terrestrial internet connectivity in India (and almost everywhere else in the world) is offered as a fully integrated service. The only way you can get yourself an internet connection is through a licensed telecom service provider that provides last-mile connectivity to your home, installs a router and switches on the web for you. All the components of this service—from the backhaul that connects you to the internet, to your authentication as a valid user on the network, and the invoices raised for the data you consume—are packaged as one single offering provided by a licensed entity.

PM Wani unbundles the different layers of this service into its component parts, re-assembling them in an entirely different configuration in order to allow private entrepreneurs to deliver each of these components in a safe and secure manner that does not compromise the regulatory requirement of reliable user authentication.

In the first place, it redesigns the user experience by allowing customers to avail internet services through a new category of app providers. These app providers are responsible for carrying out user KYC (know your customer) processes, as well as allowing authenticated users to discover Wani-enabled hotspots and connect to them in a seamless manner.

The hotspots themselves will be provided by public data office (PDOs)—private establishments such as kirana stores, roadside shops and tea stalls—that will set up public Wi-Fi hotspots within their premises. For readers who can remember India before the mobile revolution, think of PDOs as the data equivalents of public call offices (PCOs) through which we used to make calls when we couldn’t get to a landline. But PM Wani adds one more layer to the mix—the PDO aggregator (PDOA), an entity that aggregates PDOs and signs them up to a captive portal through which they can be authenticated on the network. It is through this portal that the Wi-Fi services they offer are made available to Wani customers. PDOAs will be integrated with the full range of payment service providers, allowing customers to purchase prepaid packages of their choice in much the same way as they buy any other online service.

The beauty of this system is that every single layer of the architecture, from the app provider to the PDO and PDOA, has been designed to be fully interoperable and connect with every other layer through a set of open specifications. By enabling anyone and everyone to set up Wi-Fi hotspots, PM Wani will likely unleash a range of entrepreneurial opportunities at the edge of telecom networks. Hopefully, this will incentivize thousands of small businesses to put in place the last mile of data connectivity that big telecom firms have so far been reluctant to.

Critical to the success of PM Wani is the liberalization of telecom regulations—in particular, restrictions on the resale of telecom services. Since telecom services can only be provided under a licence from the Indian government, their resale also requires a licence. Historically, it is this regulatory restriction that came in the way of private parties establishing businesses that offered Wi-Fi services to the public. The cost (and effort) of complying with India’s onerous telecom regime is too heavy a burden to impose on small entrepreneurs. If we intend to enable a Cambrian explosion of Wi-Fi hotspots in the country, we will have to lift resale restrictions and allow PDOs, PDOAs and app providers to function with minimal regulatory oversight.

Most importantly, this new regime will have to be exempted from licence fees, as nothing dampens entrepreneurial enthusiasm like the hard reality of adjusted gross revenue-based licence fees.

Rahul Matthan is a partner at Trilegal and also has a podcast by the name Ex Machina. His Twitter handle is @matthan