India is on the verge of a digital tsunami but is under-prepared in bandwidth capability to cope with the oncoming deluge. The new National Digital Communications Policy (NDCP) has raised the clarion call to connect all Indians together through their ‘Broadband for All’ proposal. This initiative will greatly advance India’s position of socio-economic progress on the global digital stage. With about 500 million internet users and more added by the minute, Indians have demonstrated a voracious appetite for mobile smartphone apps and video streaming—all of which consume tremendous amounts of bandwidth. Additionally, the introduction of 5G and Internet of Things (IoT) in the near future means huge amounts of data generated every second. Only steep acceleration of initiatives to drive the laying of optical fibre network, liberal licensing policies to create millions of public Wi-Fi hotspots, and improved satellite communications will help us compare favourably against China and other competing nations.
It’s well-accepted now that internet penetration is an important engine of economic development. A 10% increase in the number of internet users can grow a country’s GDP by 1.4% (according to the World Bank). The internet is expected to contribute $537 billion to our GDP in 2020, more than half of which is because of mobile apps (Broadband India Forum and ICRIER research). The BIF/ICRIER research shows that a 10% increase in the use of mobile apps can result in a 3.3% increase in India’s GDP. There are 530 million smartphone users in this country—all hooked on watching videos on their mobiles. A staggering 65-70% of all mobile data consumption is from video streaming (Nokia India Mobile Broadband Index 2018). This figure is 200 million more people than the entire population of the US, and this enormous volume is a magnificent opportunity that we cannot afford to miss.
The pressure is on us to meet the demands of both our urban and rural citizens. Streaming platform Hotstar reports that nine out of 10 Indians watch videos on their smartphones. Literacy and cost are no longer barriers to entry due to voice-enabled, low-cost smartphones. Additionally, the Indian economy is fuelled by the highly-profitable IT-BPM sector that contributes an incredible $167 billion with exports reaching $126 billion (India Brand Equity Foundation). We are extremely under-equipped to handle this demand. We need to quicken the pace at which we provide Broadband for All to stay competitive in the global market.
The Indian government’s plan to provide Broadband for All is a great start to enabling greater connectivity. While increasing optical fibre network and satellite communications is certainly the way forward, the fastest way to scale initial internet access is through public Wi-Fi hotspots. This is where we can learn from the successes experienced by China and other global counterparts.
The world is trending towards public Wi-Fi and the entire Indian ecosystem will have to work together to increase Wi-Fi hotspots or be at the risk of being left behind. India lags far behind other nations in this crucial aspect of digital infrastructure.
One hotspot in India currently serves a whopping 37,500 people, while in the US, there is one for every 2,000 people, South Africa has one for every 3,500 people, and Nigeria has one for every 13,800 people. The entire world is moving towards an ideal of one hotspot for every 20 people, and this is a sign of economic prosperity for developing and developed nations in this digital age.
It is estimated that the world will have over 340 million public Wi-Fi hotspots by the end of 2018. This grew exponentially from 50 million in 2014 (Maravedis Rethink research). Almost 70% of them are in the Asia-Pacific region. Liberalised licensing for Wi-Fi service has been the main factor boosting public Wi-Fi hotspots in other countries, and India cannot afford to place heavy regulations on simple services such as Wi-Fi. The US, Australia, the UK and Denmark are just some of the countries that do not require registrations or licences for public Wi-Fi providers. The EU has light registration requirements; Japan needs notification but light regulatory requirements; Canada has a simple online registration process; Nigeria, Cambodia, South Africa and many others ask for a light notification or registration with notice filing. These policies enable the proliferation of public Wi-Fi for the betterment of the country’s GDP, the citizens and overall development. In India, public Wi-Fi hotspots could potentially fall under a new Digital Infra Registration, featuring very liberal and light regulatory terms and conditions as recommended by the Telecom Regulatory Authority of India.
China took a liberal approach in 2006 and, as a result, has more than 6.1 million public Wi-Fi hotspots. In comparison, India has a woeful 36,000. Even countries like Indonesia and Mexico have a greater number of public Wi-Fi hotspots serving much lower populations. India’s goal is to grow to 10 million hotspots in the next five years, but we need about 8 million hotspots in 2018 to meet the current demand. In the next five years, our requirements will have rocketed.
Wi-Fi has tremendous advantages including faster scalability and is less dependent on heavy infrastructure. Growing the number of public Wi-Fi hotspots can offer a much-needed break for telecom service providers to offload cellular data onto Wi-Fi networks. This move will greatly reduce congestion on their existing burdened networks.
The addition of more public Wi-Fi hotspots will increase the number of users, which, in turn, will increase the amount of data downloads. This data traffic will have to be carried only by the telcos, and this will help boost their revenues. Let’s take the example of the Indian Railways system that offers public Wi-Fi—20% of Wi-Fi users are willing to pay for better mobile broadband (outside train stations) after experiencing fast broadband service on Wi-Fi-enabled trains and stations (Analysys Mason report). There is a potential for 100 million people spending on handsets and cellular mobile broadband services after getting used to Wi-Fi on trains.
Objections from telcos are mainly due to how licensing requirements are structured. Indeed, it is best for the nation’s overall growth if we adopt a level-playing field. Licensing should be based on the service and not the type of service provider. The Wi-Fi services component is light; PDOAs (public data office aggregators) who provide only Wi-Fi services, and telcos could also have relaxed terms for the Wi-Fi service component only of their total basket of services, as long as they segregate and show that revenue stream without ambiguity. Telcos must realise that PDOAs can provide customers with a seamless experience regarding authentication and payments on the frontlines. Telcos also reap the benefits of this enhanced customer service because it increases the demand for public Wi-Fi. Small chaiwallas and micro-entrepreneurs in rural towns can also quickly offer Wi-Fi, and this can operate side-by-side with the large telcos. These smaller Wi-Fi connection hotspots can increase and improve last-mile connectivity, but the bulk of internet traffic will still rest and be carried only on the broad shoulders of telecom carriers.
The strong human yearning to connect with each other is the driving force behind 3.8 billion people globally embracing the internet in just a few decades. As our familiarity with the internet grows, the demand to access it anywhere and everywhere is going to be a necessity of daily life, not a nice-to-have. In aircraft, trains and automobiles, in buildings, elevators, basements, and anywhere else, this last-mile connectivity can be achieved only through the growth of public Wi-Fi hotspots. To achieve this, India needs to urgently emulate other nations in the matter of liberalised public Wi-Fi hotspots. It is time for government agencies, telecom service providers, and infrastructure providers to band together and heed this trumpet call for the next giant leap of progress towards Digital India.
(Research inputs by Chandana Bala)