In coming months, we will likely see efforts being made to provide free WiFi hotspots by State/Central governments and R-Jio across key cities in India. For instance, 1) The newly elected Aam Aadmi Party (AAP) in Delhi is looking to offer free WiFi in public places across Delhi, as per its Manifesto; 2) Telecom Minister recently inaugurated BSNL’s free WiFi in Varanasi.
What is Offered in the Free Wi-Fi Package in varanasi ?
- Free Wi-Fi limited to 30 minutes per day ; multiple sessions allowed
- Recharge options of Rs 20/30/50 for 30/60/120 mins; Rs.70 for full day
In our view for material impact on telco revenues from free government WiFis – 1) the range and speeds from WiFi networks need to be good; 2) Free offerings need to be for longer hours and not limited for a short time (current free WiFi in Varanasi is only for 30 minutes); 3) The deployment of WiFi / fiber needs to be executed well. Case-studies from other Asian markets show that free government WiFi has not had material impacts on operator revenues in the past.
Although WiFi hotspots can help operators offload data traffic from their networks and hence reduce capex investments / spectrum constraints, we see more risks of cannibalizing telco revenues rather than complementing them provided WiFi networks are of good quality. While we do not see any near-term risks to telco revenues as data revenues is still relatively low, we do not rule out medium term risks of slowing data growth/declining voice revenues as consumers use more data.
Also Read – What is Reliance Jio Infocomm’s Free Wi-Fi Gameplan ?