Indian cities going wireless...a pipe dream, some may call it. Some might wonder if we really need such a dream, while some others feel proud about Indian cities trying to hit global standards.

But does a viable business model exist so that other cities can follow suit? Among the biggest challenges India faces are last mile connectivity and lack of an adequate infrastructure. In such a scenario, a city wireless network is an exciting proposition. But till a sound business model is found, a wireless city will be just a novelty.

According to Rustom Irani, president and CTO, Sify, “The present thinking of setting up Wi-Fi networks is more to gain mindshare than to actually provide options for connectivity. This is also being promoted by the local administration and needs to move to a partnership model where there are economic drivers to help sustain the networks.”

As opposed to a blanket citywide wireless, some experts lay their bets on location-specific hotspots at cafes, airports, and the like as a business model that will be more profitable.

All said and done, one cannot ignore the enthusiasm of a handful of enterprising cities which are considering wireless as a means to project a more progressive image. In the process, they may end up evolving a business model that works and generates revenues. This in turn could pave the way for other cities to replicate the model.

The First Indian Wi-Fi City: Mysore

Known more for its cultural heritage than technology, Mysore became first in establishing citywide Wi-Fi. It uses three towers to cover the city with wireless Internet access. The initiative was kick-started in mid 2004 by three visionaries-Shankar Prasad, Srikanth V Rao and G Saravanan-through their private venture, WiFiyNet.

"The present thinking of setting up Wi-Fi networks is more to gain mindshare than to actually provide options for connectivity. This is also being promoted by the local administration and needs to move to a partnership model where there are economic drivers to help sustain the networks" -Rustom Irani, president & chief technology officer, Sify

More recently, the Pune municipality teamed up with Intel and launched a plan to build “Unwired Pune” by 2007. With a budget of
Rs 7 crore, it plans to create a seamless wireless Internet zone enveloping 400 sq km area of the town. This will cover the entire Pune metropolitan area, including the Pimpri-Chichwad municipal areas and the software technology park clusters in surrounding villages. It will use both Wi-Fi and WiMax technologies.

More cities are likely to follow. Chennai, Mumbai, Bangalore, Ahmedabad, Hyderabad, and Chandigarh are already contemplating going wireless. Intel is reportedly in talks with the Karnataka government for a citywide wireless umbrella over Bangalore. It has also launched a pilot with the Uttaranchal government on the lines of Pune's wireless project.

Creating Infrastructure is No Mean Task
Establishing a citywide wireless network involves a number of entities from municipal corporations to technology advisors and system implementers, financing agencies and many private players.

Some of the infrastructure requirements are listed here.

•           The government needs to offer co-location of space to reduce the cost of access points.
•           Grid-technology should be used to reduce costs.
•           Some points will need to have copper/fibre backhaul to the gateway location.
•           In India, an ISP license is required and if the carrier wants to get into ILD also, an ILD license is required.
•           A secure Internet gateway and billing solution is needed.

According to Balaji Kulothungan, head-Wireless & Telecom, Gemini Communications, a citywide wireless project can be executed with the help of an ISP or even a GSM/CDMA operator. He explains, “Infrastructure leasing is an upcoming strategy to cut-down on CAPEX. Any company having in-depth knowledge of wireless technology can lease the infrastructure from telecom operators/ISPs and roll out the services.”

Investment costs depend largely on factors such as coverage area and penetration. According to Shanker V Rao of Soshacom, the cost is further governed by factors such as security, type of network management, quality of service, support infrastructure, installation, access points, labor, management, backhauling, etc. Depending on the area of coverage and services offered, S Kailasanathan, MD, Microsense pegs the investment anywhere between Rs 50-100 crore.

Does it Make Sense?
A loaded question, the answer to which the city administrations and stakeholders are trying to arrive at. While there are benefits in sight, it is important to understand if these benefits are for real or simply part of the hype.

This initiative will get a big push if it can provide connectivity in areas where other access technologies like fiber have limitations. According to Irani, Wi-Fi mesh networks will help increase the penetration in cities where existing connectivity solutions such as fibre or copper are not widely laid. “We are a country of unplanned and not-easily-manageable cities. It is a nightmare for a service provider to lay fiber in an unplanned infrastructure. Thus, it makes sense for Indian cities to go wireless,” says Ponnanna Uthappa, head-Enterprise Solutions and Marketing, Team Computers.  

According to experts, this will be much faster and cheaper than laying the fiber. The fact that India lacks legacy network infrastructure will be in favor of creating city wireless networks. But, Kailasanathan points out that this is only one part of the story. “If that was the case, you wouldn't have cities like San Francisco and Philadelphia becoming Wi-Fi cities. British Telecom will, reportedly, blanket six cities in the UK with Wi-Fi. So there is more to it than overcoming lack of legacy infrastructure. What this implies is that competing technologies are seen as being unable to provide the desired services to municipalities, governments and citizens that Wi-Fi can, or at least, holds the promise to deliver,” he explains.

At the same time, there have to be enough takers and a sustainable revenue model. A few revenue-generating services could be to provide access to travelers and mobile professionals and to extend e-Governance services to a wider base of citizens.

Kailasanathan outlines the long-term and short-term benefits of having a wireless infrastructure. The short-term benefits include attracting businesses and travelers, and a more widespread delivery of Internet-based e-Governance services. The long-term benefits are the ability to deliver voice and video services at relatively low costs, delivery of content services for education and healthcare to disadvantaged groups and areas, delivery of information services to all citizens, and widespread diffusion of Internet access. This will help bridge the digital divide and provide an e-commerce platform to local service providers to offer a host of products and services.

Skeptics Abound
One section of the industry feels that wireless deployments can help e-Governance initiatives, attract businesses, and make a city more competitive. Others feel these benefits are visionary, theoretical or pure hype.

As Rao points out, an average Indian does not walk around with a laptop and does not seek connectivity everywhere. “The Indian consumer today is smart and knowledgeable. He may subscribe to a service for its novelty, but unless its quality and cost are competitive, he will not support it. One must examine the quality of service in an urban setting,” he adds.

Not everyone is convinced that wireless will help in better implementation of e-Governance initiatives. According to Alok Shende, director-ICT Practice, Frost & Sullivan, South Asia & Middle East, “While the wireless infrastructure can help in providing connectivity in remote areas, there are many other important issues of e-Governance that the government must first look into. Making cities wireless is not the only concern.”

A citywide wireless infrastructure may not have much use for an enterprise. One, it will use its corporate WLAN. Two, it may not want to connect to a public wireless network for security reasons. Business users will use more of office and hotel premises for connectivity and most of these places are already going wireless.

Technological Hurdles
Like every other technology, Wi-Fi has its limitations.  It may make sense for basic services in areas where there is low density of population, low demand and expectations. The 802.11 framework does not present a suitable replacement infrastructure across urban cities with high population densities.

According to Kulothungan, there are two major hurdles on the macro level. One is that Wi-Fi's performance will depend on the terrain of location where it is going to be deployed. The other big challenge is the interference. Presently in India only 2.4 GHz band is delicensed. Other countries have the 5.1 and 5.8 GHz bands also delicensed for outdoor Wi-Fi applications. As we are left with only 83.5 MHz of free spectrum in 2.4 GHz, there will be second thoughts on enabling a city with wireless using Wi-Fi technology.

WiMax can provide the answers to some of these limitations by providing the backhaul with WiFi being used for the last mile. But WiMax too has its share of glitches as it is still in a nascent stage. It will be a while before one can expect to find standards-based WiMax equipment finding their way into the market. And it will take even longer for it to get cost effective.

What's the Business Model?
The whole argument finally converges down to the issue of RoI. At the end of the day it all boils down to the viability and sustainability of such a project. With the market just getting used to the concept and its various aspects, the business and revenue model are yet to crystallize.

Presently, there is a lack of clarity on the revenue model to be adopted, and whether the bandwidth should be sold or provided free of cost. Irani suggests that to make this a long lasting and technically resilient connectivity option, it would be desirable to have the network paid for, either by subscribers or sponsors.

According to Uthappa, plain vanilla bandwidth alone cannot help in sustaining the networks and what will be required will be building value-added services on top of that. This can include opening the doors to a widespread voice network based on VoIP. Another possible revenue stream is advertising.

Irani suggests that RoI should be looked into in a more holistic manner and not as a regular ARPU number. It should include upgradation in the quality of living, savings from infrastructure costs (roads, etc), educational opportunities, public awareness, etc.

In terms of RoI calculation, Kulothungan roughly estimates that it will cost around Rs 6,000-7,000 per subscriber (with a hypothetical user base of 50,000) on CAPEX. The RoI can be achieved in five years, he says. Factors which may impact the RoI are the QoS parameters, high availability of networks, upgradation of the gateway bandwidth which is directly proportionate to the user base, network monitoring and network performance evaluation.

Wireless cities are on the horizon. But they will not spring up overnight. Nor should we expect the service and experience to be amazing from day one. As companies and governments try to strike the right balance between need, technology, impact and costs, a viable business model could evolve. Till that happens, you can head straight to the nearest hotspot.

Shipra Arora
shipraa@cybermedia.co.in

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