Wi-Fi 2.0 Global and South African Market Impact
Wi-Fi was initially conceived as a wireless alternative for the modest office network. Contrary to all expectations, Wi-Fi has emerged as disruptive technology that has grown by stealth to dominate the global wireless data domain. This is true not only in terms of the number and range of devices in the market but also the volumes of data transferred.
Mover, players and shakers
The domestic market is tracking the evolution of Wi-Fi in the global markets. This is relevant to several segments:
- Telecommunications companies, vendors, service providers and several new players have taken notice of the growing Wi-Fi ecosystem and, after some market testing, are deciding how to position themselves in this disruptive, strategic and dynamic market. Many are in the early stages of the investment cycle.
- Traditional mobile players seek to maintain customer loyalty, plug revenue leakage, improve indoor coverage and gain a foothold in new markets by building high-capacity, lower cost networks that provide Wi-Fi-handoff and gain a foothold in new markets created by Wi-Fi. To do this effectively, they need a deeper understanding of the underlying dynamics.
- Internet-access providers seek ways to seize a share of the significant opportunity in providing last-mile and local backhaul. They are doing this by increasing hotspot coverage and building carrier-grade Wi-Fi networks from which to offer wholesale and retail services. The opportunities are exponential, but the pitfalls can be deep.
- Service providers across the value chain, as well as application developers, are seeking to position themselves to help build and maintain Wi-Fi networks as well as to provide and develop services uniquely enabled by Wi-Fi. They can participate in the boom of Wi-Fi-enabled gadgets, products and services if they have the correct framework to understand the trends.
Access to free Wi-Fi was central to several political manifestos in the recent national elections. Initiatives such as Project Isizwe in Tshwane and the Western Cape Government’s Wi-Fi projects have demonstrated that there are innovative ways to provide these services.
These ventures have unlocked a new domain that calls for government at all levels, policy makers and pro-active enterprises in South Africa to realise the role of Wi-Fi in achieving a range of socio-economic objectives. Given the alarming statistic that 47% of the urban population has no access to the Internet at all, and that the goals of SA Connect present a serious challenge to the status quo, Wi-Fi surely has a central role to play.
What is behind the explosive growth in Wi-Fi?
So, what has driven the demand for Wi-Fi? BMI-T has identified 10 interlinked and interrelated factors:
- The massive uptake of smartphones
- Wider choice in the tablets and phablets available on the market
- Multiple device ownership
- More applications, both free and paid
- Cloud computing enabling these applications
- Faster and more capable Wi-Fi technologies
- Carrier interest in Wi-Fi to extend their brands and relieve pressure on their networks
- More hotspots and demand for free or low cost bandwidth
- Wearable and machine devices becoming commonplace
- Globally harmonised, unregulated, no cost spectrum in several bands with wide bandwidth
These factors work together in two complementary virtuous cycles with the supply of and demand for Wi-Fi at the intersection of the cycles.
Wi-Fi Commercial Models
The table below unpacks the some of the different Wi-Fi models currently available. It provides a useful framework against which to characterise the local market.
The bottom line
There are already close on 8,000 active hotspots and more than 30,000 locations for hotspots across South Africa. The demand for data will soon outstrip supply if current trends continue and there is no resolution regarding the assignment of access spectrum, including digital dividend spectrum.
Simply put, consumers have developed an addiction to lower-cost bandwidth, and network operators will need to cater for this demand through innovative mechanisms with Carrier Wi-Fi being a prime candidate.