Lap It Up at Home

Varghese Thomas is never very far from his laptop. At work or
at home, the laptop never leaves the corner of his eyesight. His job demands
that he be connected and accessing information round the clock. While he was
restricted to certain areas inside the house to connect to the network, today,
after Wi-Fi-enabling his house, he works with his laptop while relaxing with a
drink anywhere in the house.

"I know India has a lot of potential, but I don't know yet where to find it."–A visiting foreign national

People like Varghese are exceptions. The technology of Wi-Fi
may be rocking the countryside, but its echo loses its strength in the
backyards. Compared to global trends, especially in developed countries, the
Indian home segment has steadfastly refused to be lured by the charms of Wi-Fi.
So much so that some people in the industry often say there is no such thing as
a home segment in the Wi-Fi market.

"Homes in the country have not opened as a market simply
because of the low PC penetration in the country. It’s normal for homes in
developed nations to have two PCs and a laptop and so it makes sense to go Wi-Fi,"
says Srikanth Patil, director, solutions, Intel India.

Adds Anand Mehta, marketing manager for Dlink India,
"Our homes are made of concrete and in most cases are restricted to one
storey. In the West, houses are made of wood and stretches up to atleast two
floors. This means Wi-Fi carries a lot more investment appeal."

And that is just the beginning. The slightest goading seems
to stir a hornet’s nest of all things hindering the home segment from becoming
a viable market in the country. But the industry discounts each of these issues–as
easily as it points them out–as something that can be tackled easily.

For instance, let’s look at the issue of security. Though
one of the most oft-quoted reasons for the lack of penetration of Wi-Fi at home,
it seems to be all the more relevant to the enterprise than the home segment. As
Mehta of DLink puts it, "There’s just not enough people using Wi-Fi to
warrant concerns about security in the home segment. If there is one person who
installs Wi-Fi in his house in a tenement, what are the chances of someone else
on the same floor to have done the same for the networks to clash?"

The other argument is that there are solutions in the market
that already make Wi-Fi as secure as any other wired connection.

Other issues like perceived cost of technology installation,
despite the fact that prices are dipping–a house can be Wi-Fi enabled with as
less as Rs 10,000 of initial investment. And, the issue of broadband
availability–less than 6% of total Internet subscribers in India are on
broadband and less than 2% of this reaches the home–is addressable and its
rate of change is something the vendors can control by their own efforts.

Therefore, the lack of interest in Wi-Fi might boil down not
to issues which are holding it back directly, but due to the inadequate customer
strategy by vendors themselves. But consensus seemingly evades that point too.

At the Helm

The factions for potential drivers of Wi-Fi at home take three directions.

"Laptops and the mobility that goes with it will be the
prime driver for Wi-Fi into the home segment," says Mehta of Dlink. Now
with laptop prices going down, more individuals will pick them up pushing the
technology into more homes, he adds.

And then there is the other side of the camp, which swears by
increased broadband penetration as the key to the home segment.

Patil of Intel feels that the transition from the desktop to
the laptop is a case of natural progression and an irreversible phenomenon.
However, he adds, "But the real potential of the laptop can be leveraged
only if you have a high-speed connections. Until companies become aggressive on
the broadband front, no one is going to understand the beauty of Wi-Fi."

Agrees Jagbir Singh, group CTO, Bharti Infotel, "Without
backend support in the form of broadband speed, Wi-Fi does not provide any
convenience factor to homes. That will be the crucial element." Bharti
recently announced the launch of their Wi-Fi initiative, which concentrates on
the upper layer of the home segment where they will push Wi-Fi along with more
DSL connections.

Here’s another aspect to the whole issue. The way to
approach the home segment with Wi-Fi is not as a functional element but as a
technology that can be fun and addictive. "The one way to do that is to
connect more electronic home appliances within the house to the network,
integrating it into the consumer lifestyle," said Jagdish Mahapatra,
business development manager, wireless solutions, Cisco India and Saarc on
Linksys, which concentrates on the SOHO and home players in India. According to
him, while there were 2.2 million network enabled devices in 2003, this number
will increase to 27.7 million in 2007—a ten-fold increase.

Reaching Out

Though the solution to the Wi-Fi puzzle might lie in deciding which form of
killer app—mobility or broadband, it could fall flat unless the customer is
kept informed of the benefits it will give him.

Agrees Sujit Singh, country manager of Dax Networks,
"The increased penetration of laptops and broadband will push Wi-Fi into
the house. But in seeking that, the bottleneck might prove to be the service
provider, who is the link to the Internet in all homes." Dax, which is
targeting a revenue of Rs 40 crores from Wi-Fi products in the next three years
time and works in the SOHO and home segments of the country, intends to reach
out to its customers by tying up with ISPs.

So do many other hardware vendors of the country. But the
number of ISPs pushing Wi-Fi now is abysmally low. Bharti Infotel, for instance,
offers a Ericsson single-box DSL CPE modem priced at Rs 7,000 with four ports
and a wireless card that enables customers to connect both their PC and their
laptop. The organization, which is looking at an additional revenue of Rs 400 a
month from existing customers by way of a 40% increase in the number of devices
connected to DSL ports, is not looking at any other vendor at present.

Sify, the country’s largest ISP, which has been
vociferously promoting hotspots, is also very clear on its separate existence
from the hardware vendor. It’s also clearly not interested in the home and
SOHO segments at the moment, while conceding that being in the ‘business of
connectivity’ they ‘will provide services as required’.

While the service provider might be the ultimate window of
communication to the customer, conspicuous by its absence are efforts by
hardware vendors to educate the customer themselves. What’s more, most seem
reluctant to even factor it in as a key detriment for Wi-Fi adoption in homes.

Agrees Pankaj Pamani, marketing manager of Asus India, which
recently launched a WiFi@Home initiative, "It’s amazing how we are
focused on channels to the extent of forgetting the end user. Perception levels
among customers are almost non- existent and most are still unaware of the
concept."

Sanjay Agarwal, business manager for Rashi Peripherals, that
is handling the market activities of Wi-Fi player Compex in the home segment, is
another advocate of increasing education levels among customers. "First,
many people still don’t know what wireless networking is. The few who do
assume the proposition to be an expensive one. There is a lot of education that
has to be done if we are going to go anywhere with Wi-Fi," he laments.
Compex hopes to increase the Wi-Fi element of its revenues from the present 10%
to over 40% in the next three quarters.

Nevertheless, Like Dax, there are a few other vendors who are
trying. "We recently Wi-Fi-enabled the Dal Lake in Kashmir and we have
plans to do the same at the Husain Sagar lake in Hyderabad and tourist interest
places like Goa and Kumarakom. We will also be conducting roadshows around the
country in an effort to raise the common man’s knowledge," Singh of Dax
enthuses.

Shooting in the Dark

Studying the propagators of Wi-Fi pushing it to the customer, one gets the
impression that the industry does not seem to going in a very straight line. For
one, nobody seems to have a very clear picture on the potential that the market
offers in the home segment (see box 1) and companies seem to be functioning in
the market and setting revenue expectations without an idea of what it can
actually come up with.

Add to this the vast difference in how the technology is
viewed within the industry itself. Take for example the two service providers.
While Bharti believes that Wi-Fi can be a convincing technology if it proves to
be convenient and fun to the home user and its growth will occur in conjunction
with how seamlessly it can be integrated with other wireless technologies like
3G, Sify believes otherwise.

Says Srikant Joshi, president, Access Media, Sify, "Wi-Fi
is a purely functional tool and it will remain restricted to only certain users
because its key is primarily mobile connectivity. Consequenly, the technology
will not be used for general Internet access like browsing and will not replace
access from home in the near future." He adds that experience points out
that the market can evolve in different directions. Put together with the
varying ideas on what could be the issues and drivers to the Wi-Fi market and
the disparate ways in which the vendors are approaching the market, the industry
looks like it is blindly shooting in the dark. "True, penetration is very
low now and we not even touched the tip of the iceberg. But Wi-Fi is a
compelling story. Given some time the market will really explode. We have to
wait atleast a year," says Mahapatra of Linksys.

He echoes the industry, as it waits for the picture to
unravel and the potential to be found. One can’t help feeling though that
vendors might be better off shaking off their lethargy towards the home segment
and focusing a little harder to understand a market that could prove to be the
biggest playground for Wi-Fi yet.

Sathya Mithra Ashok in
Bangalore

More...Haze Daze

n According to some estimates,
the total size of the Wi-Fi market in 2003 was about Rs 20 crores; growing at an
exponential rate (200%-300%)

n While worldwide the home/SOHO
segment comprises close to 50% of the total wireless market, in India it remains
at less than 5%, which according to the earlier estimate, would make it close to
Rs 1 crore

n A Frost and Sullivan survey,
conversely, pegs the WLAN market in India at just $0.8 million in 2002. It
expects it to grow till 2009 at a CAGR of 49%

n Voice&Data estimates that
the market for wireless LAN products in FY 2002—03 was around Rs 12 crore with
significant growth expectations for FY 2003-04

n Industry calculations say that
about 3% of all computers in India are laptops—the PC market in India is about
2.6 million and there are about 80,000 laptops. Of this 1/3rd of the laptops are
wireless-enabled which means only 1% of all the computers in India are
wireless-enabled. Of these only 5% belong to the home/SOHO segment

n By 2007, 20% of the total
computers sold in India are expected to be laptops. All of these will be
wireless-enabled. Of this, 10% is expected to reach the home/SOHO segments