PM-WANI: Business models

India, a large country with a lot of geographical and economic diversity, faces interesting challenges with last-mile connectivity for internet users. PM-WANI programme provides a powerful technical and policy framework towards the goal of broadband proliferation across the country.

iSPIRT Foundation has been involved with the PM-WANI programme right from its inception. Dr Pramod Varma, Siddharth Shetty and other volunteers, were involved with the technical framework for unbundling the internet access and ensuring interoperability among all participants

As of date, the Centre for Development of Telematics (CDoT) and Telecom Regulatory Authority of India (TRAI) has been ably managing the mantle with all aspects related to the PM-WANI framework.

The PM-WANI has a unique, distributed and unbundled architecture. It has the following participants:

PDO – Set up and maintain the access point (AP). Users connect to this AP to access the internet.

PDOA – Provides the technical backend for the PDO for Authentication, Authorization and Accounting (AAA). PDOA provides a facility for the PDO operator to define broadband sachet for their users (e.g. 1GB data for Rs 5). PDOA also stores the users’ usage data as per the government security compliance.

App-Provider – Operates a mobile application for PM-WANI. A user will use this mobile application to discover a PM-WANI-compatible network. The App-Provider maintains the user KYC.

Central-Registry – It maintains the details of every registered PDO, PDOA and App-Provider. It is generally used to validate requests made between the participants. 

PM-WANI facilitates the delivery of broadband access to users using PDO-operated WiFi access points (AP). A telecom/internet service provider provides the backhaul internet to this AP.

Instead of needing multiple licences and compliances to commercially distribute internet, in PM-WANI’s case, the PDO requires absolutely no compliance or licence to distribute internet locally! 

That does not mean the security is compromised in any way. The user KYC is handled by the App-Provider and the usage logs are maintained by the PDOA

User Flow

PM-WANI as an earning opportunity for small entrepreneurs

This programme offers great monetary opportunities for entrepreneurs. Multiple companies are coming up with varied plans for becoming a PDO / PDOA. Let us discuss some of them 

Case 1: Become a PDOA with a C-DoT software stack and onboard PDOs

This is for entrepreneurs to start their own PDOA business and create a network of PDOs (on their own or onboarding other small-business owners) 

The Centre for Development of Telematics (C-DoT) provides a complete PDOA software stack as Platform as a Service(PaaS). Here, it takes care of all the technical requirements (including software, server and regulatory requirements). This enables entrepreneurs to start their PDOA operations without getting into the technical nitty-gritty. They charge a very low fee of Rs. 15000 for 3 months.

Costs

Here is the cost breakdown for a PDO for Year 1:

Annual Internet pricing – 50 Mbps connectionRs.600/month = Rs 7200/-
Annual Electricity & Router MaintenanceRs.150/month = Rs 1800/-
Indoor AP which is CDoT PM-WANI compliant (WAYU)Rs. 5300/-
Total Investment for year 1 for a PDORs. 14300/-

Cost breakdown for a PDO Year 2 onwards:

Annual Internet pricing – 50 Mbps connectionRs.600/month = Rs 7200/-
Annual Electricity & Router MaintenanceRs.150/month = Rs 1800/-
Indoor AP which is CDoT PM-WANI compliant (WAYU)Already Purchased
Total Investment from year 2 onwards for a PDORs. 9000/-

In this business case, we consider that 95% of the voucher collection goes to the PDO and 5% goes to the PDOA

The annual investment for the PDOA is Rs. 60000

Value Proposition for PDO

A PDOA can create an excellent value proposition for a PDO using this model.

We have considered the average voucher cost for a user to be Rs 2, Rs 5, Rs 10 and Rs 15., eg. a user will buy an internet sachet/voucher of Rs. 2 for 1GB data a day.

The below table shows the cost-benefit analysis for Year 1 wherein a PDO charges Rs 2 per voucher. Annually, PDO breaks even with just 20 daily users and achieves 100% return-on-investment (ROI) with just 40 daily users in the first year itself! Year 2 onwards it’s just 13 users to break even and 25 users for 100% ROI.

PDO Year 1

Daily Cost Per User(in Rs)No of daily users for breakevenNo of daily users for 100% ROI
22040
5816
1048
1536

PDO Year 2 onward

From year 2 onwards, the ROI starts getting even sweeter as the operating cost further reduces to Rs. 9000 for a year 

Daily Cost Per User(in Rs)No of daily users for breakevenNo of daily users for 100% ROI
21325
5510
1035
1524

Value Proposition for PDOA

The below graph shows the number of PDOs needed to be deployed for a PDOA to break even for different voucher costs and daily users

Case 2 – Become a PDO with other private players

There are quite a few companies that allow people to deploy their own PDO directly. They provide a PDO infrastructure (AP and allied software) for Rs 12000 a year

Costs

Here is the cost breakdown for a PDO:

Annual Internet pricing – 50 Mbps connectionRs.600/month = Rs 7200/-
Annual Electricity & Router MaintenanceRs.150/month = Rs 1800/-
AP which is PM-WANI compliantRs. 12000/-
Total Investment for year 1 for a PDORs. 21000/-

Value Proposition for PDO

Daily Cost Per User(in Rs)No of daily users for breakevenNo of daily users for 100% ROI
22958
51224
10612
1548

PM-WANI Challenges

Interoperability 

One of the major challenges that PM-WANI is facing right now is protocol compliance. Because of this, some of the PM-WANI Apps do not work interoperably with the PDO. 

Example: A PM-WANI app developed by company A is not compatible with a PDO of company B. A’s app only works with A’s PDO

Data Sharing 

The protocol, as of now, does not have a standard way to share usage data between the participants. Hence, the app provider does not get any incentive when a user buys a PDO/PDOA coupon due to this lack of data sharing. Also, for implementing roaming between PDOs, it is essential that there is some data-sharing standard available between multiple PDOAs.

Grievance Redressal

This is another area that is not regulated at the moment

What iSPIRT is up to

We are working on multiple fronts to solve the PM-WANI challenges. 

For the interoperability issue, we are developing a certification mechanism for PM-WANI that cthe PDOA or App-Providers can easily usewith minimal complexity.

We are developing a reference implementation for PM-WANI. The community can further build on it and come up with more interesting business models for PM-WANI.

We are also working on proposals for improving the protocol to address the challenges mentioned in the previous section.

Please feel free to write to Saurabh Chakrabarti at [email protected] for any questions.

Cloud Telephony Startups seek support from TRAI

This write-up should be read along with the previous blog – The Value Added Service Providers in Cloud Telephony. These blogs help us to accumulate the progressive development in discourse on policy for this segment of Industry. It is important for our common understanding and help Software product industry innovating in telecom sector in general and cloud telephony in specific terms.

The Startups providing Value Added Services also refereed to as Cloud Telephony submitted their response to Consultation Papers by TRAI on Voice Mail/Audiotex/Unified Messaging Services Licence. 

TRAI also received responses from other service providers (which includes licensed Telecom Operators and ISPs) and Industry Bodies and Individuals. iSPIRT response was also submitted on the due date and can be accessed here from TRAI website.

The responses have been analysed and as required the counter comments have  been filed with TRAI.  Given below is our Response submission.

Counter Comments to responses received on Consultation paper by TRAI on Voice Mail/Audiotex/Unified Messaging Services Licence. Dt. 08/08/2016


After reading the responses to consultation papers, it is evident enough, that there is a clear divide between the Startup or SME players and the Telcos or the industry bodies representing them.

As previously described by us, almost all companies presently providing the services in this (voice mail/Audiotex) space are startups or SME players who have built their own Software products. Unified license operators are already allowed to provide these service. So, there is no barrier for them to enter in to these services, except creating specialisation around these services and building the requisite Software that runs the service.

The licensed Telecom operators in their responses to consultation paper have blindly favoured a license regime in this space, as well as attempted to make the case of revenue loss and breach of license. This is clearly an attempt to hog the telecom sector landscape.

We believe the approach taken by the large players in the Industry is contrary to the direction, thought and objectives of present Government. It confronts the principles of building an innovative society and multiplying growth opportunities for the enterprising youth of our country.

Recognize them as value added Services

We already stated this in our response earlier submitted. However, it seems there is a need to reinforce the point.

The services provided in this space are highly specialised “Value Added Services”. They are by no means either the carriage services or network services. It is a layer on top of the existing mobile and basic telephony that delights the consumer by fulfilling their needs that basic/mobile telephony cannot.

Value Addition is done on the services hired from licenses telecom operators, which have already been subject to revenue share mechanism. Hence, the very claim that these services can be sold at a cheaper rate than the local calls is squarely an imagination. So, also the revenue loss story does not stand any ground.

Therefore, the need to recognize this aspect of “Value Added Service” providers, is primary to any policy framing under consideration on the subject.

Regulate doesn’t imply inevitability of license

There is a serious need to catch up with technological advancements. A large country like India can’t be left to mercy of few companies on this account. This calls for reform and further deregulation of the telecom sector to a degree that it is accommodates the changes from time to time.

In order to allay any doubts of the stakeholders in this sector and better value to the consumer, there may be need to regulate this sub-sector of Value Added Service provider.

Regulation does not always mean “a license”. This value added service sub-sector does not hurt the incumbent licensees in any way. Hence, a simplified regulated regime with lower administrative burden and lowers costs is desirable for suitability to this segment of the telecom sector.

Hence, a registration system with period monitoring and control rather than a license regime has been recommended by us.

Promote Innovation in Digital economy

Indian is entering in to a ‘Digital Economy’ era. Digital India is also not just about connectivity and switching networks. So, a ‘Digital India’ cannot be created by just handful of licensed Telecom players. The consumer in a digital economy is going to consume variety of data and application. Innovative Software products can power up the Digital India to make it a functional ‘Digital Economy’.

Innovation is going to be the lubricant of future digital economies

This segment of the Value Added Service has been born out of innovation of individual entrepreneurs and service provision works on Software products. So, also the commercial part of the service in integrated manner.

At this juncture, when India is wanting to unleash the innovative power by its StartupIndia policy, the license raj or barrier created by large Telcos can be counterproductive to digital economy or the Digital India dream.

Telecom sector and telecom policy at large has to imbibe this need to create friendly promotional environment for innovation to happen. It is not hidden from any one that innovation worldwide is being driven by individuals and small players.

All stakeholders in telecom sector including the licensed telecom operators should contribute to Innovation. Hence, the need to support these small Value Added Service providers and welcome the new ones to emerge.

iSPIRT Request

We seriously feel that growth cannot come from fixing ourselves to status quoist approach. There is a need to further add value to the telecom sector and hence a need to create scope for number of small players to contribute to the overall telecom sector.

There is a huge opportunity for Indian Software industry to innovate and contribute to telecom sector. We from iSPIRT, request that TRAI takes the above points and our earlier response submitted in to consideration and create an enabling environment for India to grow.

The Value Added Service Providers in Cloud Telephony

Industry discussion on response to Consultation Papers by TRAI on Voice Mail/Audiotex/Unified Messaging Services Licence

TRAI floated a consultation paper to review the license of Voice Mail/Audiotex/Unified Messaging Services. The consultation paper throws light along with an in-depth analysis of various issues involved.

Many call these companies as Cloud telephony companies. Cloud telephony is a wider terms. Plus its creates confusion on switching happening from cloud. This can be problematic for a dialog with TRAI or DOT. Hence, We have called them as Value Added Service Providers. This argument is justified in this discussion below.

For iSPIRT this sector is important as

  1. Most of these companies have a Software product at the core developed by them
  2. They are mostly startups and
  3. There is enough scope in  this sector for more innovation to happen.

iSPIRT conducted a discussion on important issues of this segment of the Industry. The discussion was to touch on important aspects of the consultation papers of TRAI. The discussion is organized in 4 parts as follows:

  1. License issues
    • License v/s no license, separate licenses Technology and license mapping
    • Entry Fees, Revenue Share, License Period
  2. Issues like conferencing, dial out, point-to-point conferencing
  3. Unified License – how to tackle this
  4. Focus on innovation, Startups, Ease of Business (compliance)

Following people from Industry joined the Discussion:

  1. Ambarish Gupta, Sandeep Upadhyay and Sriram from Knowlarity
  2. Gurumurthy Konduri from Ozonetel
  3. Shivakumar Ganesan – Exotel
  4. Anik Jain – Myoperator
  5. Ujwal Makhija  – Phonon

Those interested can watch the video embedded here. Also the text below the video describes the common points and agreements of the essence of the discussion.

License issues

There are several questions asked in consultation paper on, What kind of licensing is required for various services. (Q1 to Q8)

At iSPIRT we feel most of these providers fall under one category. And they all should get recognition under one category name. This will include all, those who provide Voice mail, Audiotex, Audio Conferencing service etc. They can focus on one set of service or the entire suit of services.

Nomenclature – Call them Value Added Service providers

Cloud Telephony means a telephony service provided from cloud hosted infrastructure. simple reason that the service offered from cloud. Present policy regime of India calls them content providers. Now this may be difficult to digest for remaining IT industry. This include  provider licensed under the Voice Mail/Audiotex/Unified Messaging Services License.

Application service provider (ASP) and Communication application service provider (CaaS) are other nomenclatuers ascribed.

These providers are not supposed to carry telecom traffic or provide switching of telephony. In essence these providers are “Value Added Service” (VAS) providers. These value added services can range from be voice mail box, an IVR, a virtual PABX, a virtual call center to analytics based services.  There can be lot of innovative ways to deliver services. The VAS operator charges for their value added part. The VAS operator does not have its own network but relies on network resources of the Telcos for the basic or mobile telephony.

Weather a license or a simple Registration process

Everyone in the panel agreed that licensing cumbersome and costly. There is no need for a license and that there should be a simplified registration process.

The registration should be under one category e.g. Value Added Service Providers. This can cover all Voicemail, Audiotex along with Audio conferencing and the Unified messaging.

The registration helps DOT to keep track of fair use of the policy, with complete neutrality and level playing field. DOT can keep watch the registered VAS providers through a simple compliance process.

License issues – Entry Fees, Revenue Share, License Period

There was common agreement in the discussion on fees and charges. Presently there is a bank guarantee of 3 lakhs for Voice Mail/Audiotex licenses. A policy to either keep it at same level or evolve to simplify further is welcome.

License/registration period of 10 or 20 years are good enough.

Issues like conferencing, dial out, point-to-point conferencing

The consultation paper deals at length these issues. For the industry they are of high importance as most confusions arise from them. Often the threats of inspection and service disruption from TERM cell arise from these provisions. There is always a doubt that the VAS operator may be involved in routing call traffic for business motives or running a switching service clandestinely.

In such a dubious doubtful environment this budding segment of Industry cannot grow. The VAS operators addes lot of value to both their suppliers and clients. The customer pays for the value they add not for the telephone calls. For suppliers (Telcos), the VAS operator is a bulk service customer

The common agreement was that this area needs a serious look from TRAI and DOT.

When industry is complying with all required prohibited clauses of the policy such as

  1. No VOPI integration
  2. No toll bypass
  3. No number masking

When the Call deail record (CDR) are all tapped in the Telco’s network;

AND

When there are further detail logs and records that are avaialable from VAS provider;

there does not arise a chance of

  1. Security  breach by VAS operators and
  2. Revenue loss to Telcos

The revenue of Telcos increase happen to increase even when they VAS providers buy from Telcos at a discounted rate. VAS operators increase the size of Pie.

In view of above, the common agreement in the discussion was that

  1. There should be clarity on conferencing, bridging call out provisions
  2. There is nothing like point to point conferencing
  3. The policy should allow VAS operators to use telecom resources from multiple operators. The limiting principle should be dial out to same operator from where incoming call comes.  Multiple operators are the need for reliability or redundancy.

OSP like provisions or OSP should be allowed for VAS providers?

There was an opinion on OSP being allowed to VAS operators. This will give them more flexibility to operate and grow their presence. The opinion attempts to justify the OSP based on analogy of large Captive call center operators allowed OSP with network spanning country wide with a central logic running.

iSPIRT’s opinion is that this may create conflict with other areas of policy under TRAI and also face sever resistance. It is advisable to take up this issue in a phased manner. May be first limiting OSP to one telecom circle at a time. Plus it advisable to approach it, after due consultative interactions with TRAI and DOT.

Unified License – how to tackle this

There are number of questions on Telcos operating under unified license to offer VAS. The questions also point to inclusion of “Voice Mail/Audiotex/Unified Messaging Services” in unified license.

The common opinion that emerges out from discussion is that the Value Added Services is a different ball game. The market should be free for all. Eventually there is a unique Software Product existing behind these services. The quality of service is highly dependent on this core product.

There does not seem to be any apposition to Unified license getting extended to the value added service suit.

Focus on innovation, Startups, Ease of Business (compliance)

This fourth part got truncated from the recording, perhaps for time limit getting crossed unnoticeably.

For benefit of the community. A very short discussion on how this small industry could further be boosted by perhaps giving more access to domestic market through promotional policy measures.

Certainly there is agreement that there is lot of scope to innovate and do more within this segment of the Industry.

The discussion ended by a Thank you note.