Telcos may cry hoarse but India needs public Wi-Fi
Public Wi-Fi hotspots could address the issue of call drops—and the degrading quality of service which results in users experiencing 2G speeds on 3G and 4G connections—to an extent
Mumbai: It is hardly surprising that the Cellular Operators Association of India (COAI) has opposed the Telecom Regulatory Authority of India (Trai) plan to float a ₹10,000 crore tender for public Wi-Fi hotspots. Since Wi-Fi networks operate on unlicensed spectrum, COAI asked why public data offices (PDOs) should get to sell internet services without a licence that could impact the investments already made in spectrum, telecom infrastructure and services by incumbent telecom services providers.
Moreover, given that public Wi-fi is very vulnerable to intercepts by hackers unless used with a virtual private network (VPN), one can only presume that the Wi-Fi hotspots will have the upgraded Wi-Fi Protected Access (WPA3) standard which, of course, will require the purchase of new routers.
Nevertheless, these concerns do not belie the fact that public Wi-Fi, for which the Indian government is also holding a contest to select the name and logo. , will definitely speed up the cause of a truly Digital India. While the government will have to address the issue raised by the telcos, industry lobbies cannot keep the masses from reaping the benefits of public Wi-Fi, similar to their over-a-decade-old opposition to voice over internet protocol, or VoIP.
First, users face a huge amount of call drops, which has prompted Trai to consider slapping a penalty on operators who have not met call drop norms for the quarter ended March 2018.
The impending merger of Vodafone India Ltd with Idea Cellular Ltd is only adding to the angst of users since these two companies hold a combined 36% subscriber market share for the quarter ended March 2018 as compared to Bharti Airtel Ltd’s 25.54% and Reliance Jio Infocomm Ltd’s 15.47%, according to a report released by Trai on 27 June.
Public Wi-Fi hotspots could address the issue of call drops—and the degrading quality of service which results in users experiencing 2G speeds on 3G and 4G connections—to an extent. For instance, sharing of Wi-Fi infrastructure can facilitate offloading of traffic on to Wi-Fi networks, according to Trai, thereby easing network congestion on mobile networks in high density public footfall areas.
Developed markets such as the US, the UK and France have about 30% of their total public data offloaded to public Wi-Fi networks as opposed to India’s 16%. Besides, “around 100 million people are willing to spend an additional $2-3 billion per year on handsets and cellular mobile broadband services as a result of experiencing fast broadband on public Wi-Fi”, providing Indian telcos an opportunity to make more money, according to a 3 July report by consultancy firm Analysis Mason.
According to Jayanth Kolla, founder and partner of Convergence Catalyst, “COAI is right in demanding the regulators for amendments in licence fee and spectrum fee payments restructuring, but PDOAs will only help spread the adoption of Internet in India fast and wide. Also, for a data hungry country like India, cellular and wireless technologies are inadequate to cater to the latent market demand. And, the (wireless telecom service) providers that COAI represents, by virtue of the choice of their technology are as such poorly positioned to cater to the market needs at full potential, even if the entire market were available for them.”
Second, public Wi-Fi could also help reduce the digital divide. The above-cited report, commissioned by Google, notes that a successful public Wi-Fi market in India could see over 600 million people experiencing a public Wi-Fi service. It, however, acknowledges that for this to become a reality, over three million access points must be rolled out throughout the country, including in tier-3 cities and villages. However, these high-speed fibre optic links will have to ensure a high quality of service. “There is a virtuous link between better time utilisation (enabled by free high-speed Wi-Fi) and satisfaction derived by passengers, which in turn benefits venue owners (such as airports and railway stations),” says the Analysis Mason report.
Third, deployment of Wi-Fi could be a cheaper option compared to that of 3G or 4G networks in places that already have fibre access to backhaul (that part of the network which communicates with the internet). Further the government’s Common Service Centres (CSCs) and e-governance and electronic delivery of services (digital payments, Aadhar) will also get a boost with public Wi-Fi.
Fourth, telcos need to reinvent themselves just as banks are doing with the disruption from fintechs.
For instance, Jio today has verticals such digital payments, entertainment along with its voice over LTE (VoLTE) service offerings, and has disrupted the Indian telecom sector, eating substantially into the profits and market share of incumbents like Airtel, Vodafone and Idea.
Fifth, telecoms around the world have been reinventing themselves, according to ‘The Mobile Economy 2018’ report by the GSM Association.
For instance, in the US, AT&T is taking a lead position in the Media and Entertainment industry even as its Time Warner bid remains subject to regulatory approval.
Verizon has also made a number of acquisitions across several areas—digital media and advertising (Yahoo and AOL), the internet of things, or IoT (telematics and smart cities) and fibre networks—ahead of the 5G era. In the IoT space, many European operators such as Telefónica, Orange and Vodafone have IoT-dedicated lines of business that provide solutions across verticals.
Several operators such as Turkcell in Turkey and SK Telecom, Singtel and NTT DoCoMo in Asia, according to the GSMA report, are also targeting the wider digital consumer space by offering a range of digital services and content including fintech, e-commerce, content, lifestyle, advertising/digital marketing, identity and security solutions. While telecoms will continue to be the dominant source of revenue for operators, these new businesses provide new revenue streams, help navigate the IoT learning curve and add business capabilities in the digital space, the GSMA report points out.
In 2017, the total value added generated by the global mobile ecosystem was $1.1 trillion (or 1.4% of GDP), with mobile operators accounting for more than 60% of this, according to GSMA. Mobile operators and the wider mobile ecosystem also provided direct employment to almost 12 million people across the world. In value-added terms, GSMA estimates the mobile ecosystem to contribute $4.6 trillion to the global economy by 2022 (or 5% of GDP), up from $3.6 trillion in 2017 (4.5% of GDP).
In the developed world, the adoption of M2M and IoT solutions will drive increased productivity. In developing countries, productivity growth will be mostly driven by the adoption of mobile internet services, notes the GSMA report.
On their part, Indian telcos have taken the digital cue by diversifying into other streams. Harping on historical wrongs will not help their cause.
- KG-D6 issue: Niko serves arbitration notice to RIL and BP
- Business leaders urge RBI to cut benchmark rate
- UCO Bank board approves raising Rs1,000 crore via QIP
- Reliance Jio Q3 profit swells 22% to Rs 831 crore, user base over 280 million
- Bombay HC to hear Kotak Mahindra Bank’s plea on stake dilution in March
Editor's Picks »
- DCB Bank Q3 results: Small loans give big pain as farm, mortgages lift delinquencies
- 1 step forward, 2 steps back. Is GST going the VAT way?
- Mindtree delivers stable Q3 results after a shock Q2
- RIL Q3 results today: Will Reliance Jio, Reliance Retail make up for lost energy?
- Why Tata Motors’ Project Charge at JLR is failing to recharge its shares