Liberalised Wi-Fi could trigger over Rs 1,00,000 crore of national economic activity

Each and every stakeholder in our digital ecosystem stands to benefit from the spread of Wi-Fi.

Liberalised Wi-Fi could trigger over Rs 1,00,000 crore of national economic activity
Mobile spectrum just cannot cope up with exploding data volumes at acceptable service levels.

By TV Ramachandran, Chandra Ramamoorthy & Kartik Raja

Broadband connectivity everywhere and for everybody is the bulwark of our country’s Digital India vision. The policy sets stiff targets of 5 million hotspots by 2020 and 10 million by 2022. Even these targets fall short of global benchmarks, wherein we should have exceeded 8 million hotspots before 2016 itself. In fact, India performs poorly in terms of the number of hotspots both by population and area of coverage. A dramatic change in mindset is, therefore, needed if the targets are to be exceeded and India is to be on a par with other countries.

To enable this change, TRAI introduced the concept of Wi-Fi Public Data Offices and Aggregators (PDOs and PDOAs) last year. TRAI’s architecture—Wireless Access Network Interface (WANI)—is open and easy to set up, with the potential to democratise Wi-Fi access across the country. More significantly, this architecture enables seamless roaming across different access points as authentication needs to be done only once rather than repeatedly. Additionally, 60 MHz of spectrum in 5GHz has been freed for Wi-Fi (which is among the largest in the world).

The WANI architecture and the Aggregator business model needs to be implemented on priority. Let us then bust the myths leading to delays in implementation of Wi-Fi PDOAs.

Myth 1: Data usage growth in the last two years shows Wi-Fi-based PDOAs are not needed.

Over the last five years, India has seen mobile broadband connections increase from 84 million to over 500 million. While this is a great achievement, it, by no means, is enough. As per the leading network monitor 4GMark, India is ranked at a poor 51 in the percentage of tests done on 4G. As far as network quality is concerned, we are even worse. As the number of connections and data consumption increase, cellular networks alone cannot provide access and quality required for India to feature in the top quartile of digitally-ready countries. Wi-Fi, with its large capacity-handling capabilities, would need to carry a major portion of our exponentially increasing data traffic (especially video), and would have to be ubiquitous for India’s digital vision to fructify.

Mobile spectrum just cannot cope up with exploding data volumes at acceptable service levels. On data speeds, we rank a low 100 in global rankings. Hence, we need public WiFi hotspots at 25 times the current availability to be on a par with global best practices.
Myth 2: Only large telecom operators can set up such massive number of Wi-Fi hotspots.

Let us venture three decades ago when public call offices (PCOs) were set up in every street to act as local connectivity hubs. It was our lakhs of small entrepreneurs that pioneered the responsibility of providing basic voice access to all our citizens, until such time that mobiles became easily available. In the short time that WANI was trialled, we have already seen similar evidence of local kirana shops and rural entrepreneurs replicating the PCO story. We now need to formalise this proven approach to spread the access to broadband data to our streets and villages.

Myth 3: With the lowest data tariffs in the world, Wi-Fi does not have a business case.

Many believe that the primary rationale for setting up WiFi PDOAs is for mobile data offloading (MDO)—which refers to seamlessly moving data access from cellular networks to Wi-Fi in order to reduce congestion and improve quality. The telecom industry today spends about Rs 90,000 crore in capex.
Even if we assume the spread of Wi-Fi can save a conservative 5% of this capex because of mobile data offload, that leads to savings of Rs 4,500 crore per year. However, to say that this is the only business case for Wi-Fi is incorrect.

Each and every stakeholder in our digital ecosystem stands to benefit from the spread of Wi-Fi.

-The cheapest smartphone today costs about Rs 4,000, which is still expensive for millions of Indians. Imagine a smartphone that is only Wi-Fi-enabled. This can lead to a cost reduction of Rs 1,500-2,000. Phones at similar prices such as JioPhone have sold in excess of 75 million devices. Even if we assume a conservative figure of 50 million Wi-Fi-only devices being sold, it leads to additional revenue of Rs 10,000 crore for the device industry.

-Broadband connectivity will play a central role in realising Prime Minister Narendra Modi’s vision of doubling rural incomes. Access to Wi-Fi would enable instant access to educational materials and information that can drive farmers to plant the right crops using the right technologies and at the right time. Even a 3% increase in farmers’ incomes through spread of deep rural broadband access would result in Rs 60,000 crore of additional income for farmers.

-Democratising Wi-Fi access provisioning would lead to additional income for millions of small entrepreneurs. In fact, 10 million hotspots at a conservative Rs 1,000 monthly income translates to Rs 10,000 crore per year.
-Roll-out of Aadhaar and Direct Benefits Transfer (DBT) led to savings of more than Rs 50,000 crore last year. As digital access expands, more people would opt for DBT across schemes and we conservatively estimate additional savings of Rs 20,000 crore.
-Google/Facebook have made billions through advertising. Location-based advertising using Wi-Fi can be unleash a number of advertising opportunities for smaller companies, with data staying localised at the aggregator level. At the current digital advertising market size of Rs 24,000 crore (30% CAGR), an additional 10% growth due to increased rural broadband access results in Rs 2,500 crore of revenue.

Based on our conservative estimates above, Wi-Fi PDOAs can unleash over Rs 100,000 crore of yearly economic activity (see graphic).
India’s telecom UPI moment:

The time is now

Wi-Fi 6, the latest standard, is four times faster in device-dense areas and offers greater bandwidth than the current Wi-Fi. Both Wi-Fi 6 and 5G have been designed for higher speeds, lower latency and the Internet of Things (IoT). It is important for us to align with open IoT standards through Wi-Fi 6 rather than allow the spread of semi-proprietary standards-based devices, which tend to belong to specific countries.

While cellular/5G will certainly play significant roles in long-range IoT, mid- and small-range devices will largely be based on Wi-Fi 6. Hence, it is essential to ensure the reach of Wi-Fi in rural areas where IoT will have a huge role to play in improving farm productivity, and water and energy conservation.

With easy plug-and-play architectures and digital payments, access to Wi-Fi can be made seamless, sans technical bottlenecks. It is, thus, important that we demolish the myths around WiFi PDOAs and see it as an enabler of rural broadband, IoT connectivity and as a catalyst for rural economic activity.

Finally, the capital required to set up such a massive number of Wi-Fi hotspots need not come only from telecom operators. Private Wi-Fi aggregators like Boingo in the US are great examples of start-ups that have generated billions of dollars in enterprise value. With the right regulation and India’s large potential, access to private capital is not a constraint. The recent telecom infrastructure investment by I Squared Capital’s Lightstorm Telecom Ventures is a case in point.

The next wave of Indian telecom’s revolution will not be driven by a few players, but by millions of small entrepreneurs—at street and village levels. Such a wave would be enabled by adopting WANI to deliver for connectivity what UPI has done for digital payments.


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