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May 9th, 2011, Vol:1

Editor's Words

By Sridhar Pai, ceo, Tonse Telecom


How Coffee mixes with Wi-Fi in India

If you walked the streets of Bangalore, New Delhi or Mumbai you will not miss colourful, dainty coffee shops springing up in most corners of downtown area. Nothing new about that though, till you find out that most of these are also serve Wi-Fi! Apparently coffee + Wi-Fi is a heady mix and has gone down well worldwide – some years ago San Francisco boasted of the most number of coffee shops serving Wi-Fi. Driven by local demand, Bangalore headquartered Cafe Coffee Day, the Starbucks style Coffee chain, is spreading wings and growing its franchised outlets to well over 2000 by 2014 from the current 1082 outlets. Multi-national Coffee Chains such as Costa Coffee, Starbucks and Lavazza have already made a start building up brand and street presence in metro zones, combined an expected 6000 coffee outlets are likely to be live in India by 2015.


While Bangalore has always been a Coffee lovers destination, there is something more that is currently driving the new onslaught of coffee: Wi-Fi enabled devices. Prices of data-capable smartphones have dropped steeply to about Rupees 3000 today (USD 67 ) while a large number of Indian mobile handset brands such as Olive, Karbonn, Micromax, Lava and others are unleashing more smartphone choices for less. On the upper end of the device spectrum, Samsung Galaxy Tablet now retails its new version 2, with a lovely leather pouch for only Rs. 24,000 (USD 536 ) down from Rupees 29,000 (USD 648.7 ) just 4 months ago and is flying off the shelves. Univercell, a popular retailer confirmed that they have averaged 2 tablets a day in the last couple months, from just one of their outlets downtown.

From the networks side, you will notice that the stars are aligning for a perfect take off of Wi-Fi. As of May 2011, it will be a full year that the 3G / BWA spectrum auctions and its infamous investigation aftermath were initiated and not a single BWA network has seen the light of day, let alone launch of service. While3G licensees have attempted to light up select towns with 3G, there is no single new service the user can connect with and claim a high quality experience which was otherwise not available. In this vacuum Wi-Fi appears to be a great alternative.



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  • Creating new value chain and eco-system of mobile cloud computing
  • Driving telcos role in cloudscape – Understanding the landscape of mobile cloud computing
  • Software-as-a-Service, Platform-as-a-Service, Infrastructure-as-a-Service - Present and Future outlook

No wonder therefore that Wi-Fi service providers are scrambling to expand coverage. Thus Ozone, Zylog, Tikona and MetaMax have stepped on the gas and are enhancing build-out adding more POPs, expanding coverage and increasing footprint. This is where Wi-Fi meets Coffee – as Ozone POPs are getting embedded into Coffee Day outlets nationwide with backbone relationships with Airtel. Further, Ozone is exploring to tie up with Vodafone and Idea while a technology collaboration agreement with AL Lu is already in place. Tikona has perhaps built the largest Wi-Fi network in India with Wi-Fi AP supplied by Ruckus Wireless. An estimated 45,000 AP are already deployed and an agreement with Aircel, India's most data-savvy GSM operator is already in place. Shyam-owned Spectranet and MetaMax are contributing to an overall build-out which has tremendous potential to grow.

Down south, Zylog's Wi5 is making waves with a 100% pre-paid model which has a combined subscriber base of over 30,000. Tonse believes that Zylog probably has cracked the Wi-Fi base station pricing model better than anyone else and is able to setup a POP at the lowest $ / subscriber (with a combination of own software plus 3rd party hardware). Thus, Zylog has even penetrated tier 2 towns and if offering fail-safe Wi-Fi in over 150 locations. Plans are afoot to grow to 179 locations and 100,00 subscribers by year end. Zylog Wi-Fi generated a top line of about US 5.15mil.

Indian cellular operators have suddenly more respect for the relatively smaller Wi-Fi counterparts. While initially these free-to-air spectrum operators were considered yet another enterprise customer who would buy bulk bandwidth, the relationship is now more symbiotic. Wi-Fi ISPs are now more likely to carry access traffic from larger captive Wi-Fi base than pricey data plans from cellular operators. Besides, retail outlets are willing to make room for Wi-Fi gear as the added attraction of offering Wi-Fi soon becomes a 'must have'.


But perhaps an even bigger opportunity lies shrouded under clouds: wholesale Wi-Fi offload. Instead of creating multiple small regional Wi-Fi PoPs and creating several bilateral relationships with individual mobile operators, a large scale carrier-class wholesale Wi-Fi model should emerge in India. With only a fraction of 3G sites just lit up, none of the LTE-TDD / BWA offerings live and mobile data traffic beginning to grow in volume, it is but a matter of months before a large scale data explosion becomes a reality. If a large nationwide Wi-Fi network is built out and a 'LightSquared like' wholesale model is launched, it should have plenty of takers. Interestingly a business model around unlicensed spectrum that is non-retail suddenly seems lot more appealing for this bandwidth hungry nation.

India Wi-Fi ISP coverage and Expansion
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Verizon's LTE network is hit with outage - FierceWireless. more

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About Tonse Telecom

Tonse Telecom is a research, consulting and advisory services organization focusing on the India telecom sector. Tonse Telecom enables telecom equipment vendors, ISVs, infrastructure developers and investors for success in the Indian telecom marketplace.

Tonse Telecom has onboard, a team of reputed senior industry executives and consultants who provide advisory services on specific projects. Tonse covers a broad spectrum of telecom technologies that include Wi-Fi /BWA / WiMAX, IMS, FMC and Triple Play, VoIP, Mobile VAS, End-device Applications and Mobile Content.

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