“Wi-Fi zones will be established at public places in all towns to supply free Internet facilities.”
Maithripala Sirisena, Presidential Election Manifesto 2015
“I will make the entire country a Wi-Fi hot-spot, like Korea, within the next five years.”
Mahinda Rajapaksa, Presidential Election Manifesto 2015
In November 2014, with two months to the Presidential election, it looked a brilliant idea – something too good to be true. It was like somebody accidentally solving a century-old math puzzle. Of 10 million-odd eligible voters, more than a million were millennials – born after 1990. Their vote was critical. Without it, victory was difficult.
The problem was, how? It was a generation too difficult to fathom. They were politically disengaged and uncommunicative. Most were dependents, and thereby unmoved by economic pressures. Just one positive factor: Their tech savviness. Most of them had smartphones. They were also known for spending limitless hours on Facebook. This was the path to secure their vote. But, how? No government could offer free laptops or smartphones for all. It seems the political parties settled for the next best idea: Free connectivity. Wi-Fi delivered at every bus halt and railway station, absolutely free of charge.
It’s immaterial which party first came up with the idea, comparable statements appeared in both manifestoes. So it looked like a bonus to be received in either case. It was not a bad idea too as an election promise. For a moment, it seemed everyone forgot what happened to the promises of previous elections. They thought this time would be different. Many, especially the youth, believed in the idea’s feasibility.
It wasn’t an international first too. Arvind Kejriwal, Aam Aadmi Party leader and a candidate for Delhi Vidhan Sabha elections in early 2015, had given a similar promise. Surprisingly, that too has been taken seriously by the constituency despite its limitations: Wi-Fi can be used only in public places, can only be used for thirty minutes, and cannot be used for private purposes like Facebook, Twitter, WhatsApp or even emails. Kejriwal still attempts to deliver at least part of his promise.
Same here. An attractive election promise it was, but not a workable one. Simple calculations can demonstrate its fallacy.
Your ISP offers 15GB data for Rs1,000. This is how he calculates. The off-peak data cost is very low because only little international bandwidth is used during that period. Peak usage is what matters. Say it counts for 60%. That is 9GB. So 1GB is about Rs100. This value may not be exact, but it’s close. It can be used to determine the price of the proposed ‘free lunch’.
The Telecom Regulatory Commission estimates the number of local broadband users at 4.2 million (about 3.4 mobile broadband and 0.8 fixed). Let’s assume 60% of current users (or 2.5 million) opt to use free Wi-Fi and each user, on average, needs 5GB a month. The assumptions are reasonable – 5GB is the size of the date usage on the lowest cost post-paid monthly package in the market. With current prices, the ‘Free Wi-Fi’ package costs Rs500 per user. Multiply this by 2.5 million and you get Rs1.25 billion per month or Rs15 billion annually.
Somebody should pay for this. In comparison, in 2015, the government spent Rs14 billion to operate the railways. So this is equivalent to running an island-wide railway system – with no income (Railways, on the other hand, returned Rs6.3 billion to the treasury. Not adequate to cover expenses, but enough to reduce the loss).
Certainly, a debt-ridden country cannot make such a huge investment on its own without a return. Thus, if offered as a completely free lunch, the ‘Free Wi-Fi’ option will have its wings so trimmed that it will not fly – irrespective of its attractiveness as an election promise. Still, compromised solutions do exist. They are not ‘free lunches’. The user must bear part of the cost. Return comes in two parcels. Free data, till a certain limit, and then at reduced charges. The free limit may not be as high as 5GB, but 1-2GB, or even more during off-peak hours is not inconceivable.
[pullquote]No government could offer free laptops or smartphones for all. It seems the political parties settled for the next best idea: Free connectivity. Wi-Fi delivered at every bus halt and railway station, absolutely free of charge.[/pullquote]
This is possible because of one key economic factor – Wi-Fi. It is less expensive compared to mobile broadband. Telcos have already made their international bandwidth investments. Most have enough redundant capacity. Wi-Fi at public places needs no towers. Last mile data transmitting costs are low as users are closer to the transmitter. Payment collection can be done through channels established already, so it costs less.
This business model, if it ever happens, will be a new beginning. It will move broadband users back to a more ‘fixed’ technology than the now dominant ‘mobile’. While not necessarily ending the latter, it can seriously diminish further mobile expansion. If the government can persuade some ISPs to offer special midnight packages with high data limits, it could trigger a new trend. Say, lower-cost packages to be used between 2am and 6am, when internet activity is minimal, can move all heavy downloaders away from mobile broadband.
As we have already seen, teleco reactions can vary. Those who are more into ‘fixed’ services than mobile will gain from the transformation and thus will like the idea. Mobile operators, unless they too can offer Wi-Fi, may lose market share. The most objectionable can be small mobile players whose survival depends heavily on low-cost data packages offered to special categories like university students. This will be the market to be invaded by ‘Free Wi-Fi’. A fact: The same group of telcos once vehemently objected to the ‘Free-Wi-Fi’ project. They claimed that even an offer of 100MB can kill 40% of their existing market. Getting their consent will probably involve offering new Wi-Fi licenses to small players, so they too can play the same game. It is not a costly exercise, as no spectrum allocation is involved. Unlike in the case of mobile broadband, multiple players can operate in the same frequency range offering Wi-Fi.
The only question: Is the government really interested in keeping this important promise? We see no such indication. It is the mandate of the Ministry of Telecommunication and Digital Infrastructure. Strangely, both the minister and his deputy don’t speak of this. Even the president and the prime minister, who ceremoniously opened free Wi-Fi zones before the general election, are silent. Perhaps they are waiting for the project’s natural death. That is truly sad. It will be great if the government seriously re-analyses the entire project. It will be remembered for the delivery of a promise, its own promise – at least partially.