New Delhi, June 17 -- Telecom operators received a setback as the sector regulator rejected their calls to scrap the country's public WiFi project and decided to cap bandwidth pricing under the scheme to provide affordable internet connectivity.

Operators cannot charge public data offices (PDOs) more than twice the tariff applicable to retail subscribers for fiber broadband services with speeds up to 200 Mbps, the Telecom Regulatory Authority of India (Trai) said in its new tariff order.

Under the Prime Minister Wi-Fi Access Network Interface (PM-Wani) project, PDOs are local and small shops that buy internet bandwidth from operators to resell as public WiFi hotspots and internet sachets of Rs.5-10 per day to consumers in rural and othe...