Wi-Fi may steal a march over mobile data

Improvement in Wi-Fi infrastructure can significantly reduce costs and increase speed

Telecom players are battling to retain their competitive edge and market share by improving the quality of their services and offers.

The Centre’s digitisation push — with initiatives such as Digital India, e-wallets and smart city projects — isexpected to help increase internet penetration — both mobile internet and Wi-Fi. But experts think that Wi-Fi can steal the thunder from mobile internet in the future.

“The Wi-Fi cost per MB is about 2 paise, on an average, or a seventh of that for mobile internet (excluding free data offerings),” says Hetal Gandhi, Director, Crisil research. “However, penetration of fixed broadband services has been limited at 18.24 million fixed broadband subscribers in fiscal 2017; this works out to about 7 per cent of total households. This is significantly lower than in developed markets such as the US, where fixed broadband penetration is over 80 per cent. Thus, Wi-Fi can play an important role in increasing the reach of fixed broadband internet quickly.”

Intense competition in the industry is one of the main reasons for the surge in data consumption, apart from better and cheaper handset availability. Telecom players have incurred high infrastructure costs to launch 4G and VoLTE services pan-India. However, their services depend on the quantity of the spectrum held; the more the spectrum, the better for the company.

Mobile data to stabilise

Though data consumption has increased 24 times in the last five fiscals, the penetration of data is still low. According to Crisil research, data consumption is set to multiply four-fold in the next five years through fiscal 2022 and the number of data subscribers is expected to double. That is, mobile internet penetration in India could jump to about 80 per cent from less than 40 per cent now. Mobile wireless internet subscriberswere at 400 million for the quarter ended March 2017; this was at 321 million subscribers for the same period a year ago, according to TRAI data.

However, according to an Akamai state of internet connectivity report for the June quarter 2017, when it comes to mobile internet speed in India, it is at 4.9 Mbps (megabits per second), which is way lower than in countries such as South Korea or Indonesia.

This provides ample opportunities for telecom companies to expand their mobile internet penetration and speed in the Indian market. According to Crisil experts, growth in mobile data usage could moderate to 12 per cent annually with 2-2.5 GB per user of data consumed in the five fiscals through 2022 and stabilise thereafter. “Given the operators’ quest for market leadership, the decline in mobile data prices could continue in the medium term as well, but at a slower pace,” says Crisil’s Gandhi.

Wi-Fi penetration is at the early stages in India. Poor Wi-Fi infrastructure is one of the reasons for the steady increase in mobile data use despite the poor quality and connectivity when compared with other countries.

Wi-Fi on the rise

According to Crisil Research, the time spent online through Wi-Fi is as low as 18 per cent in India while it is about 50 per cent in the US. The proportion of data traffic through mobile phones is high in India, at an estimated 11 per cent, compared to 6-7 per cent globally.

A study conducted by Assocham and Deloitte reveals that for India to match the global average of one public Wi-Fi hotspot per 150 people, an additional of 80 lakh hotspots are to be deployed. Currently, India has over 31,000 public Wi-Fi hotspots installed. Many rural areas are still deprived of mobile connectivity and this need to be addressed to achieve pan-India connectivity. Slow and delayed infrastructure deployment is one of the challenges to better internet penetration in the country.

Telecom players have already taken steps to bridge this gap and maintain their market share by offering Wi-Fi hotspots through partnerships with players such as Facebook, Google, Microsoft and Government projects. For instance, Bharti Airtel and Facebook have struck a deal to provide 20,000 Wi-Fi hotspots.

“Large telecom players who are moving towards integrated service solutions would want customers to be on their network, whether at home, on the go, or at public places such as railway stations, malls, gardens or theatres,” says Gandhi. “At times they would also want to offload traffic during peak hours to networks without additional investment in their own networks.”

Thus, the improvement in Wi-Fi infrastructure can significantly reduce costs and increase speeds, which would eventually shift mobile data traffic to fixed lines.

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get





MORE FROM BUSINESSLINE


 Getting recommendations just for you...
This article is closed for comments.
Please Email the Editor