Limited spectrum drives telcos to go wifi for last-mile reach

Tags: Knowledge

Indian wifi market set to double to $180m by 2013: study

Limited spectrum availability and prohibitive capex costs to set up greenfield data networks have caused telecom companies to look to wifi and other technologies for providing last mile connectivity to subscribers.

If officials at Ruckus Wireless are to be believed, the wifi market in India is expected to double to $180 million by 2013.

Sudarshan Boosupalli, general manager, India and Saarc operations at Ruckus Wireless told Financial Chronicle, “We have just finished a proof of concept (of using wifi to provide last mile data connectivity) with tier-1 operators.

“Telecom companies are seeing how they can reach the customer at low cost. It might take the wifi for telecom operators market about a year to reach $80-90 million.”

Data services like 3G and 4G are currently offered on inefficient bands (2100 mhz for 3G and 2300 mhz for 4G), which raise capital expenditure such as setting up new towers and base stations.

By using LTE as well as 3G technologies for the backhaul, telecom companies can reduce capex requirements.

Another advantage that wifi possesses is its near-ubiquitous availability on all phones, while developing a new 4G-LTE device ecosystem from scratch would be prohibitive.

Combined with an enterprise wireless large area network (WLAN) market currently estimated to be $80-90 million, the total market for wifi based products in India is expected to double to about $180 million within one year.

However, there are problems in acquiring new sites that house wifi hotspots. Boosupalli admits as much, “The most challenging aspect of building a network of wifi hotspots is site acquisition.”

He claimed that Tikona Digital Networks, which has installed 50,000 access points across 40 cities, had an edge because they have the necessary permissions.

Boosupalli said that an agreement between telecom operators and Tikona for sharing hotspots was “imminent”. He added that this would enable telecom operators to provide “seamless roaming between hotspots”, known as “Hotspot 2.0”.

Boosupalli estimated that with about five to six per cent of revenues coming from India, the market showed great potential.

Potential notwithstanding, the company remains satisfied with a development centre in Bangalore and has no firm plans of setting up manufacturing.

“Increasing volumes from India may lead to something in the future but nothing on the radar as of now,” exclaimed Boosupalli.

Boosupalli said that organisations were now taking wifi more seriously. “Apart from telecom companies, small and medium businesses (SMBs) have now realised that they can use wifi as the sole network and not just a redundant, overlay network. This is a big change,” he said.

Boosupalli estimated the company’s employee count at between 70 and 75 employees, with 20 employees in sales and pre-sales and the rest in research and development.

Given the traction that Boosupalli sees for wifi products, the company will double its sales and pre-sales force and augment its R&D workforce by 50 per cent over the next two quarters.

sriramshankar@mydigitalfc.com

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