October 2014 | Shalini Menon
'Wi-fi is a storm waiting to happen'
With customers expecting more efficient and seamless communication channels, the wi-fi business is set to take off, and Tata Teleservices (TTSL) is sitting in the driver’s seat. Sunil Tandon, head, non-voice services, mobility, speaks to Shalini Menon on the growth of TTSL’s wi-fi business and the way forward.
TTSL launched the wi-fi business last year. How has it taken off?
We have been positively surprised by the success of the wi-fi business. In the last 12 months, we have been able to make wi-fi available in about 1,200 hotspots and we are adding new hotspots every day in airports, hotels, malls, retail chains, fast food chains and cafes, and so on. With the positive response, we have more aggressive plans going forward.
Events seem to be big business. What is TTSL’s presence here?
TTSL’s records in the events business have been acknowledged. We received two mentions in the Limca Book of Records 2014: one for creating the largest indoor wi-fi hotspot in India, which was at the Auto Expo in Delhi, and the other for creating the largest outdoor wi-fi hotspot, which was at a stadium used for Indian Premier League cricket matches.
Such events provide us with significant opportunities as there is a large footfall in a small geography and we have a large number of customers adopting our wi-fi. We do everything possible to create awareness about the services available to customers before and during the event. We also endeavour to provide consistent, good quality data throughput to our customers.
These events are largely short-term and one-off instances. Having said that, many events happen at venues which get booked through the year for trade, furniture, household appliances shows, etc. The same is true of large banquet halls. That is why events result in new avenues of business. Our intent is to provide services for these short-term events and, over a period of time, make the business more structured and ‘calendarised’.
How has the consumption pattern of the wi-fi user changed over time?
There are many drivers for wi-fi data consumption. Smart phones are becoming more affordable in India — you can buy a good smart phone for about `5,000. People are discovering relevant and easy-to-use applications online. A large percentage of India’s population is young and tech-savvy. And lastly, many Indians are discovering the use of the internet for the first time through mobile phones. You also have faster data networks available, which improve the overall experience for customers. Add these factors and you have a recipe for a data explosion.
At TTSL, we make the internet accessible more easily and affordably. And in line with that, we are finding tremendous data growth at our wi-fi hotspots. In the last 12 months, our traffic has grown threefold, and over the next year, we expect to see bigger multiples. It is a clear growth story.
How does the company promote the wi-fi business?
Our wi-fi and mobile network businesses go hand-in-hand. TTSL today has 3G networks in nine circles out of 22. We see wi-fi as a nice complement to our high-speed data service offering, and we intend to leverage it significantly. Research has shown that a lot of data consumption happens when people are not necessarily on the move, but sitting in one place, such as in an airport, mall, cafe or hotel — what we refer to as nomadic users. And that’s where wi-fi fits in as an apt complement to our cellular strategy. Wi-fi is a nice way of offering fast and consistent data at hotspots. Given where we are in our lifecycle, we are focusing on the top eight cities in India currently — Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, Kolkata, Pune and Ahmedabad, which account for almost 70 percent of data consumption. We want to focus our efforts and get our strategy right in these eight cities first, instead of spreading ourselves thin over many cities. Once we get this right, then we gain significant competitive advantage. Currently, we have about 1,200 hotspots.
How do you plan to build up revenues?
I would say the revenue model is still being discovered. Currently, we have a combination of fixed rentals from some of the properties. We see monetisation opportunities such as advertising and value-added services through use of customer locations. Increasingly, we will see more of what we call mobile offload. If you are on a 2G or 3G network, the moment you get into a hotspot, you will seamlessly move on to the high-speed data network of the hotspot. And when you leave the hotspot, you will seamlessly come back to your cellular network. Over a period of time, mobile offload is going to become quite significant.
Could you tell us about some of your innovative products, especially wi-fi on the move?
Wi-fi on the move came from the consumer insight that in large metros and cities, people spend a fair amount of time commuting from place A to place B. They needed a fast wi-fi data network when on the move. The idea is to provide our customers with such a seamless connected environment. For instance, for our broadband users who use wireline broadband, we are putting into place plans which will allow seamless movement from broadband onto wi-fi whenever a consumer enters a hotspot, for the same data plan. Our intent is to provide seamless migration from one service to another, even one technology to another, and most important, ensure good, consistent data throughput. Given the geographical spread of our network and the way it is expanding, we expect this segment to grow exponentially.
What are the challenges in the wi-fi business?
There are two kinds of challenges. One is that different segments of customers have different requirements. For example, in the hospitality segment, customers want the capability to integrate the wi-fi hotspot with their hotel billing. They also want the facility to be available only to residents of their hotels. In comparison, public hotspots or educational institutions ask for content filtering, so that a certain kind of content cannot be accessed from these spots. Therefore, providing appropriate technology to serve requirements is one of the nuances of this business. Then there is the last mile issue. For any project, you need clearances from a number of government agencies, which takes time. Therefore, to make sure that the whole project moves at the expected pace, a fair amount of work is required from our side.
How do you deal with the competition in the market?
It is early days to talk of competition. The whole wi-fi business in this country is in its nascency. Currently, the competition is more from what we refer to as system integrators — localised, smaller companies which operate in particular geographies. We are also seeing the emergence of a few telcos. We welcome competition because it will help grow the awareness of the customer faster, grow the market faster, and it will result in a good value proposition for the end customer.
With India increasingly getting hooked on the internet, what is the future potential of the wi-fi business?
The wi-fi business offers an exciting opportunity to grow multifold. Wi-fi traffic accounts for almost 50 percent of the total traffic in many parts of the world. We are far from that figure. China Mobile alone is planning more than 1 million hotspots, while India has only 3,000-3,500 hotspots, of which TTSL accounts for 1,200. If China can do it, why not India?
A large number of Indians are just beginning to use the internet and data consumption is going to increase. Wi-fi renders itself well to offer that fat pipe into the internet world. We have all the ingredients in the ecosystem falling into place at the right time. I think it is time for a perfect storm in the telecommunication sector and perhaps wi-fi is that storm waiting to happen.
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