The changing dynamics of the Indian telecom industry have augured well for digital access mediums such as Wi-Fi. The proliferation of digital infrastructure under the government’s Digital India programme, increasing appetite for data and growing affordability of data-based services have all contributed to the demand for Wi-Fi connectivity. However, despite significant efforts, Wi-Fi still remains an underserved and underinvested space in India. As per estimates, the country currently needs 9 million-10 million Wi-Fi hotspots. However, less than 2 per cent of this need has been met till date. This unmet potential represents a large and lucrative opportunity for stakeholders in the Wi-Fi space.

Initiatives and efforts

Wi-Fi services should be provided as an element of a shared heterogeneous network (hetnet) infrastructure, which has a multi-access network design that enables customers to switch easily between Wi-Fi, 4G and 3G services depending on the use case. This requires a hassle-free, secure and managed hetnet infrastructure. The government is taking significant steps to provide this infrastructure. It is promoting passive as well as active infrastructure sharing on both licensed and unlicensed technologies. Further, initiatives have been taken to improve the user experience and enable seamless onboarding of customers.

Other stakeholders have also been making efforts to enable seamless Wi-Fi coverage. These stakeholders comprise service providers that have helped in creating an infrastructure layer for mobile data offloading, and improving coverage and capacity. Further, digital companies such as Facebook and Google have contributed to the Wi-Fi space through initiatives such as Facebook Express Wi-Fi and Google Station. Location partners, including a number of private and government venue partners, have invested in Wi-Fi services. Moreover, infrastructure firms such as Bharti Infratel and Indus Towers are establishing Wi-Fi services across smart cities. While Bharti Infratel is working on a project with Bhopal smart city, Indus Towers is working on a project with the New Delhi Municipal Corporation.

Different models have been proposed for Wi-Fi deployments. These include the advertisement and sponsorship model, corporate social responsibility budget-based model, analytics-funded model, consumer-paid model, venue-paid model, SP/MDO (service provider mobile data offload)-supported model, infrastructure company/government- subsidised model, and original equipment manufacturer (OEM)-financed model. While some of these models have been implemented, none of them has the capacity to be scaled up sufficiently for Wi-Fi hotspot deployments in the country.

Key roadblocks

Despite significant efforts, the indoor as well as the dense outdoor Wi-Fi experience remains suboptimal. Moreover, a coverage gap still exists in urban centres. This is because the country faces a problem of underinvestment in Wi-Fi infrastructure, the key reasons for which are:

  • Priorities – Operators or infrastructure companies that have the capacity to invest in large networks may have different priorities due to financial stress. Wi-Fi generally gets lower priority. Further, the scale of Wi-Fi deployments is not large enough for new companies to invest in.
  • Tunnel view – Companies generally seem to have a tunnel view while undertaking Wi-Fi deployments. For instance, Google may undertake Wi-Fi deployments to promote the usage of YouTube rather than solving the larger problem of Wi-Fi access, discouraging people from investing in the deployment.
  • Cost structure – Provision of last-mile access under Wi-Fi comprises 50-60 per cent of the cost. Unless companies work on the overall cost structure through smart partners and smart interventions, they will face a challenge in terms of scaling up services.
  • Revenue models – Most Wi-Fi deployment models focus on singular models for revenue recovery, which does not work.
  • Competing technology – Earlier, when data was expensive, operators saw Wi-Fi as a competing technology. However, with increasing affordability of data, Wi-Fi is now seen as a complementary technology that can reduce the overall cost burden on service providers.
  • Regulatory challenges – Some regulatory hurdles have also hampered growth in the Wi-Fi space.

The way forward

Going forward, there is a pressing need to make Wi-Fi investments attractive. This calls for active government as well as industry participation. The government needs to promote four key areas – low-cost bandwidth for last-mile Wi-Fi access, Wi-Fi roaming and infrastructure sharing, viability gap funding and interoperability on a single service set identifier. A fair amount of work has already begun in these areas.

From the industry’s point of view, some trends are emerging that will help in proliferating Wi-Fi services. Internet service providers or infrastructure providers would have to think like netcos and move towards offering bundled value-added services. Further, the industry would need to form a network of alliances comprising all key stakeholders that work together, not only in terms of reducing the risk and sharing the capex for Wi-Fi deployments but also for increasing Wi-Fi service monetisation. Moreover, the industry needs to come up with multiple revenue streams that can address the cost structure problems associated with Wi-Fi networks.

Based on a presentation by Raj Sethia, Chief Executive Officer, FireFly Networks