The Indian telecom industry is anticipating a massive surge in the uptake of public Wi-Fi given the high demand for deployment. This will create ample opportunities for service providers. The country is still in the greenfield deployment phase, which will allow domestic service providers to incorporate lessons from their global counterparts and enable rapid expansion. A look at the business models through which public Wi-Fi can be provided, the associated deployment challenges and the emerging landscape for the segment in India…
How has the public Wi-Fi space evolved in India? What are the key drivers?
India is standing at the cusp of a digital revolution, which is closely tied to the proliferation of broadband services. Wi-Fi networks can facilitate internet access in rural and urban areas. Currently, there are around 31,000 public Wi-Fi hotspots in the country, and this number is expected to increase to 202,000 by 2018.
Public Wi-Fi has been recognised as an essential component of the Digital India initiative, which aims to digitally empower the country. Under this initiative, the government aims to roll out free Wi-Fi internet connections in 2,500 towns and cities across the country with an estimated capex of Rs 70 billion.
The primary drivers of Wi-Fi services in India are higher data usage on mobile networks, the growing uptake of new apps, and low fixed line coverage. Telecom operators are increasingly deploying Wi-Fi networks to bridge coverage gaps and offload their cellular data to reduce the traffic on their networks.
The rising demand for data and the increased availability of connected devices are the key factors behind the success of public Wi-Fi. Public Wi-Fi gained popularity in coffee shops and hotels and has since come a long way. Public Wi-Fi hotspots are now available at railway stations, government offices and major streets in cities, municipal gardens, parks, and on the city bus and metro networks. Under the Digital India initiative, IT majors like Google are working to make public Wi-Fi hotspots available at railway stations.
The government’s Digital India push to connect the country through the internet is also a key driver of public Wi-Fi in India. In addition, low availability of spectrum and overloaded access networks in cities motivate internet service providers to install small cells to divert traffic and increase network capacity. Wi-Fi offloading helps in providing efficient networks in overcrowded cities.
Internet penetration and the realisation of the Digital India vision are largely dependent on the availability of broadband services. A cost-effective way to extend local broadband connectivity is through Wi-Fi. In this respect, India is quite disadvantageously placed. While there are almost 47 million Wi-Fi hotspots globally, India has a very low penetration of only 31,518 hotspots till now.
Although we represent almost a sixth of the global population, our share in Wi-Fi hotspots is not even a thousandth. While the number of hotspots globally has grown by almost 600 per cent in the past three years (2013-16), in India the growth has been rather muted at barely 12 per cent.
Broadband India Forum (BIF) believes that the proliferation of broadband through public Wi-Fi will need improved right-of-way (RoW) rules across the country, wireless fibre for technically non-feasible areas, ease of authentication, facilitation of roaming through bilateral agreements, and ease of making payments.
Sanjeev Bobby Sarin
Public Wi-Fi has become an important access channel for the internet over the past two years in India. The key drivers for its uptake in India are increased growth in smartphones; explosion in data demand, particularly video digital content, where user data consumption has grown from 21 TB to 126 TB in 12 months; and low data rates (as low as 5 paisa per MB). Free Wi-Fi is becoming a basic amenity within locations.
Dr Mahesh Uppal
The public Wi-Fi space is evolving in a limited sort of way. Even though the breadth of the coverage is increasing, it is largely confined to urban areas and upmarket establishments such as coffee houses and hotels. While Wi-Fi access has increased, the quality is a challenge. The speed/capacity may be adequate for the most basic usage like checking email and WhatsApp or maybe a Google search, but beyond that it gets problematic.
Public Wi-Fi in India has started evolving in the past couple of years, mainly due to the government’s Digital India initiative and focus on increasing broadband penetration in the country. As compared to the global growth rate of 500 per cent, the growth rate of Wi-Fi hotspots in India in the past three years has been around 12 per cent.
The key drivers for Wi-Fi services are:
- Wi-Fi is best suited for providing data connectivity to masses due to zero-entry cost to users as almost all the phones, tablets and laptops support Wi-Fi access,
- Providers would incur lower costs in setting up Wi-Fi access infrastructure as compared to mobile broadband networks as Wi-Fi technology utilises unlicensed spectrum, and the equipment and operations and maintenance (O&M) costs are lower,
- LTE-Wi-Fi link aggregation and voice over Wi-Fi would drive segment growth,
- Internet of things, machine-to-machine and public utility services are moving online,
- Adoption of online platforms for education, health, commerce, cloud services, etc.
What are the various Wi-Fi deployment models being implemented by the industry? According to you, which model is best suited in the Indian environment?
Wi-Fi access is often provided as a value-added service to attract customers to another telecom service or to an unrelated service such as retail outlets and cafes. Therefore, much of the build out of Wi-Fi services is driven by venues and aggregators focused on supporting access in a wide range of areas including airports, restaurants, hotels and malls.
The implementation model based on public-private partnership (PPP) has witnessed wide acceptance with the evolution of the smart cities concept. Government agencies, municipalities and city authorities are also increasingly investing in public hotspots. For instance, a leading internet service provider (ISP) has collaborated with RailTel Corporation to extend public Wi-Fi services to 100 railway stations, and subsequently to 400 stations by end-2016, making it one of the largest Wi-Fi projects in the country.
There are a number of models for the deployment and monetisation of Wi-Fi hotspots, where the cost of access is borne by the end-user, the owner of the site where the access point is deployed, advertisers, sponsors, or the government. Besides these commercial models, there are community-based models, which have been deployed by several non-profit organisations to provide internet and telephony services.
The government should assess the feasibility of the commercial models such as build-own-operate-transfer for the deployment of public Wi-Fi services, which involve transfer of assets at the end of the contract period.
“Wi-Fi service provides an array of opportunities for different stakeholders to improve their competitiveness, market share and margins.” Bharat Bhargava
The key business models include the paid model, the freemium model, the advertisement-based model and the aggregator model.
- Paid model: Under this model, the Wi-Fi host pays for the usage while end-users are given the service free of cost or on a pay-per-usage basis. Sometimes, the payment is collected indirectly by incorporating charges in the price of food, etc.
- Freemium: This model provides the Wi-Fi free of cost for some time while the customer has to pay for additional access or to access exclusive content.
- Advertisement-based model: The service is provided free of cost but contains advertisements for revenue generation.
- Aggregators: The Wi-Fi networks of various operators are brought together to allow customers to access by paying monthly fees.
The freemium and advertisement-based models are the most successful in the Indian environment due to poor purchasing power of the public at large.
“Customer identity like Aadhaar or any other important identity proof should be made mandatory for safe access to Wi-Fi.” Hemant Joshi
The following main models are being used:
- Paid model: The end-user or the Wi-Fi hosting venue bears the cost of usage. The venue may provide free service to its customers or indirectly add it to the amount charged for other services – for example, incorporating Wi-Fi access charges in the food and beverages bill at a cafe.
- Freemium model: In this model, free access is provided up to a specified quota, after which the user is charged as per usage. This quota could be fixed in terms of usage time or amount of data. This model is quite popular at public places such as airports, hotels, restaurants, and railway stations.
- Advertisement-based models: The service is provided free of cost to the user, and the service provider earns revenues through advertisers and sponsors.
- Aggregators: Wi-Fi aggregators such as iPass and Boingo bring together Wi-Fi networks of various operators by allowing customers to connect to affiliated hotspots around the world. In this case, the user is required to pay a fixed monthly fee for the service or on a pay-as-you-use basis.
In India, the freemium model is currently the most popular one. The advertisement-based model where the user is provided unlimited free access is likely to become increasingly popular.
“To catch up on the Wi-Fi front, the country needs a clear and concrete policy and regulatory framework on areas inhibiting the implementation of citywide public Wi-Fi networks.” T.V. Ramachandran
Sanjeev Bobby Sarin
The industry lacks sustainable monetisation options. Advertisement, digital content and telecom operator data offload is being evaluated by Wi-Fi service providers. The key to sustainable monetisation is partnerships with cellular data service providers for data offload within Wi-Fi hotspots.
“A key learning comes in the area of content development. Innovation in digital content is a key driver for Wi-Fi usage.” Sanjeev Bobby Sarin
Dr Mahesh Uppal
One model is the deployment of Wi-Fi at service-related places like the hospitality industry including hotels, coffee shops and restaurants. These services are also being offered in large public places like railway stations. I believe that the best model is yet to emerge.
“In most cases, managing the capacity through wireless routers is a challenge. Public Wi-Fi works best when it is backed by wireline or fibre access, which has limited availability in the country.” Dr Mahesh Uppal
Currently, ISPs, operators and other service providers are developing public Wi-Fi hotspots with pre-defined minutes or usage. Most of such Wi-Fi providers provide free initial offerings. Alternative models that can be tried are:
- PPPs where capex/opex is being shared by the government or a minimum revenue guarantee is offered by the government to service providers
- Neutral network model where IP-1, tower companies and other competent companies will also be allowed to establish Wi-Fi hotspots
“Taking Wi-Fi to the next level in India is a huge task and needs concerted efforts of telecom operators, ISPs, and other public internet companies.” Bijender Yadav
What are the key risks and challenges associated with public Wi-Fi deployments?
The lack of incentives for broadband operators is impacting the growth of public Wi-Fi in India. As it is often perceived as a free service, operators come under pressure to price it low. Further, Wi-Fi in mobile platforms such as buses and metros suffers on account of the fact that the backhaul used is licensed 3G/4G.
The deployment of Wi-Fi services is also delayed on account of logistical concerns including difficulty in log-in procedures, restriction on simultaneous login through multiple devices using the same user ID and password, privacy and security concerns, lack of a framework for roaming between Wi-Fi networks, and difficulties in making payments for Wi-Fi access.
Public Wi-Fi is less secure and is open to all for easy connectivity. These Wi-Fi hotspots are vulnerable to hacking and cybertheft as personal data such as password, transaction data and location can be misused. The risks involved include identity thefts, private information misuse, risk to personal safety, malware, and financial theft like credit and debit card information leakage.
The implementation of public Wi-Fi is a challenge and requires aggressive public and private participation. Operators are not stepping up Wi-Fi implementation in India because of high debt and low return in the sector. Monetisation is another challenge as the majority of people do not want to pay for Wi-Fi usage.
The first and foremost challenge that arises in the implementation of citywide public Wi-Fi models is related to project funding and financing. It could be either completely public funded, or built through PPPs, or completely funded by the private sector. There are live examples of these three types of funding across the world. Some of the other challenges are related to consumer experience during authentication, suitable payment mechanisms, absence of standards to promote seamless interoperability between mobile networks (3G/LTE) and Wi-Fi, RoW permissions, permissions to set up Wi-Fi kiosks at select locations, and infrastructure sharing/roaming between Wi-Fi and other networks.
Sanjeev Bobby Sarin
Public Wi-Fi has its own challenges:
- Public locations do not provide adequate security for hardware. They are not liable for theft or damage of expensive hardware.
- While some retail and public locations want free Wi-Fi services, some key locations like airports and large transport hubs charge service providers to place the infrastructure at the location.
- Unstable power supply causes internal damage to devices.
Dr Mahesh Uppal
In most cases, managing the capacity through wireless routers is a challenge. Public Wi-Fi works best when it is backed by wireline or fibre access, which has limited availability in the country.
- Public Wi-Fi in general is perceived as a free data services model. Hence, the monetisation of these services, achieving break-even and/or profitability in provisioning such services remains a key challenge
- Physical security and power availability for devices being deployed for the public Wi-Fi network is another area of concern
- Public Wi-Fi networks radiate unencrypted/open SSID, which poses a challenge in terms of network/cybersecurity
- Public Wi-Fi subscribers are highly random in nature; therefore, lawful intercept is also an area of concern, which needs to be addressed on priority
- Limited frequency spots for outdoor Wi-Fi services impacts QoS
What regulatory and policy measures can be taken by the government to facilitate public Wi-Fi growth?
The government should focus on providing more unlicensed spectrum by opening up unused frequency bands and TV white space spectrum. Since ISPs and telecom players make high investments in setting up public Wi-Fi services, certain incentives including permission to set up kiosks at select locations and RoW approval should be provided to them.
The authentication process can be simplified by adopting differential login options depending on the nature of customers accessing the public Wi-Fi network. The process can be centralised using Aadhaar cards, which can be electronically verified at government data centres. Further, creating a central platform for payment across different Wi-Fi networks and introduction of the pay-as-you-go method for users will promote the uptake of public Wi-Fi services. The government can also explore the business case for neutral Wi-Fi networks, wherein subscribers of all ISPs can access high speed broadband without duplicating infrastructure.
To encourage private participation and drive growth in public Wi-Fi, government policies should implement appropriate monetisation techniques. Pay-as-you-use methods and connecting payment platforms such as payments banks and digital wallets can be adopted to ensure revenue from public Wi-Fi services.
Security is a major challenge that needs attention. Users registering on the platform should be traceable in case of theft or misuse to ensure the safety of personal data and to attract more users to Wi-Fi usage. Customer identity like Aadhaar or any other important identity proof should be made mandatory for safe access to Wi-Fi.
The government and the regulator can play a significant role in the proliferation of public Wi-Fi hotspots through suitable interventions to promote seamless interoperability between 3G/LTE and Wi-Fi networks as well as between Wi-Fi networks of different service providers; simplify customer log in and authentication issues; promote the concept of city-wide Wi-Fi networks; and facilitate suitable payment mechanisms.
Sanjeev Bobby Sarin
Regulatory bodies can empower ISPs and telecom operators to roll out more Wi-Fi deployments by defining policies around sharing Wi-Fi infrastructure, ensuring infrastructure security in public locations and supporting discounted ISP backhaul for Wi-Fi service providers.
Dr Mahesh Uppal
The first and foremost measure is to deregulate this space in a creative way. Authentication of users is another area where regulators would have to find a solution. There is also an urgent need to expand the available spectrum to provide licensed and unlicensed Wi-Fi services.
- All internationally/IEEE approved Wi-Fi spectrum should be allowed for broadband use.
- Since fibre network roll-out is time consuming and costly, steps should be taken to allocate either e-Band spectrum or licence band radio spectrum for backhaul requirements to ISPs.
- Using Aadhaar database for customer authentication and subscriber profile creation.
What has been the global experience in public Wi-Fi deployments? What are some of the key learnings for India?
Globally, public Wi-Fi platforms have evolved from supporting affordable broadband coverage and capacity to becoming truly carrier grade. The global outreach of Wi-Fi technology is evident from the overall size of the market, which was estimated at over $1.5 billion in 2015. The deployment of public Wi-Fi hotspots was led by France, the US and the UK with 13 million, 9.8 million and 5.6 million installed hotspots respectively. The success of Wi-Fi services in the US and certain European countries can be attributed to adequate optical fibre cable networks, which act as a dependable backhaul option, and the support of the government public Wi-Fi hotspot roll-outs. Further, the regulators of these countries have been proactive in reserving delicensed spectrum to ensure the proliferation of internet services.
Public Wi-Fi has garnered greater popularity in developed countries like France, the US and the UK, with a significantly higher number of hotspots (13 million, 9.8 million and 5.6 million respectively). In comparison, India had 30,000 Wi-Fi hotspots in 2014. Globally, Wi-Fi grew by 568 per cent in the period 2013-16 and India showed a growth rate of 12 per cent only. The regulations on public Wi-Fi are more effective in developed countries and users feel safe to use Wi-Fi as the quality of service is good. Good quality of service and network availability can boost Wi-Fi growth in India.
India lags behind the global benchmark of one hotspot to cater to 150 people. To catch up, the country needs a clear and concrete policy and regulatory framework on areas inhibiting the implementation of citywide public Wi-Fi networks.
Sanjeev Bobby Sarin
About 60 per cent of the global data traffic is terminated on Wi-Fi. It is the medium through which people want to connect to the internet. Globally, there are around 50 million hotspots, while in India the number stands at 30,000-40,000.
A key learning also comes in the area of content development. Innovation in digital content is a key driver for Wi-Fi usage. About 85 per cent of the internet is used indoors.
Wi-Fi has also been very successful globally because infrastructure is highly developed when compared to India.
- Globally, governments and municipal corporations fund a significant portion of public networks offering complete Wi-Fi solutions. Public Wi-Fi hotspots are also widespread in countries. The Indian government may adopt/align with global practices – share the available infrastructure, support the service provider by offering a minimum revenue guarantee, or absorb the cost of data usage that they want to offer free.
- Our country currently has around 32,000 hotspots, which are largely deployed in the hospitality sector. Our focus area for the deployment of hotspots needs to be transport hubs (airports, railway stations and bus stands), educational campuses, judicial complexes, hospitals, malls and other high-footfall public areas.
What is your outlook for the public Wi-Fi segment in India? What opportunities does it promise for different stakeholders?
India was ranked 108th globally in terms of affordability of fixed line broadband services and 97th for mobile broadband services in 2014. This underscores the need for affordable and flexible ways to improve internet access. The public Wi-Fi segment holds immense promise for India as it aims to provide universal access to ICT services in both rural and urban areas.
Wi-Fi service provides an array of opportunities for different stakeholders to improve their competitiveness, market share and margins. The lower cost of Wi-Fi delivery translates into lower prices per MB for the end-users, making it a more affordable service. For telecom operators, public Wi-Fi offers the promise of cheap mobile data offload. Wi-Fi service providers can avail of multiple sources of revenues. Further, public Wi-Fi provides an opportunity to content providers to distribute locally cached content. Advertisers can also provide better location-based services using the same.
Wi-Fi is not a new concept but the growth in the past few years has created fresh opportunities in the Indian telecom sector. Telecom operators find it a cost-effective way to reach more users and reduce the spend on access network for traffic control in busy cities. Wi-Fi service providers can gain from new business models like analytics, location-based services and real-time offerings. Meanwhile, content providers can create a niche segment by providing advertisement-based content on public Wi-Fi to reach a large audience.
With the growth of broadband connectivity, all stakeholders are likely to benefit. Cellular/Mobile service providers stand to gain as they will be able to offload traffic to Wi-Fi service providers, thereby decongesting their networks. Wi-Fi service providers will benefit once more people get connected and the network utilisation rate will increase. Moreover, there will be additional business opportunities for content providers. Therefore, public Wi-Fi will be a win-win for all stakeholders.
Sanjeev Bobby Sarin
Public Wi-Fi is the key to bringing the next billion Indians online. While there are many other access options to the internet, Wi-Fi is the most stable and scalable infrastructure across the country.
Dr Mahesh Uppal
The outlook for the public Wi-Fi segment will be positive if the current challenges relating to capacity and regulation are addressed.
Public Wi-Fi is a huge opportunity for all players given the urgent need for reducing the pressure on spectrum.
Globally, there is one Wi-Fi hotspot for every 150 people. To reach that goal in India, we need to deploy around 800,000 Wi-Fi hotspots. Various analysts predict that India will have 200,000 public Wi-Fi hotspots by end-2018. Taking Wi-Fi to the next level in India is a huge task and needs concerted efforts of telecom operators, ISPs, and other public internet companies. Sharing of infrastructure on ground including optic fibre cable and towers by public and private service providers will lead to the proliferation of Wi-Fi hotspots. It will also help ease pressure on spectrum.