New Delhi, June 4 -- With over 1.2 billion mobile subscribers and some of the lowest-cost data plans, does India really need public Wi-Fi?

That's the issue at the heart of a battle between India's telecom operators and technology lobby groups: whether government funds should be used to expand public Wi-Fi networks in the country. At the centre of the dispute is Digital Bharat Nidhi (DBN) fund, formerly Universal Services Obligation Fund, which was created in 2002 to bridge the digital divide.

Telecom companies Reliance Jio, Bharti Airtel and Vodafone Idea, which contribute to the fund, have told the regulator that India's cheap and widespread mobile internet has made large-scale public Wi-Fi unnecessary. They said the fund should instea...