WiFi hotspots likely to land several competitors in a spot, Dishnet Wireless
expects to capitalise on its first mover advantage in WiMax wireless
broadband internet access. Venkatachari Jagannathan reports.
From day after tomorrow, which also happens to be Tamil New Year, the privately-held
Dishnet Wireless Limited, plans to aggressively offer wireless internet fidelity
(WiFi) access and wireless microwave access (WiMax) services. In addition,
the company will also offer enterprise solutions.
are planning an investment outlay of Rs250 crore over 18 months," says
V G Suri, 42, vice president, sales and marketing, Dishnet Wireless.
company is part of the C Sivasankaran-owned Rs850-crore Sterling Infotech
group, with business interests in mobile telephony, wireless broadband access,
food and beverages, telecom infrastructure consulting, online education, software
and speciality restaurants.
Sterling group was the first company in India to introduce digital subscriber
line (DSL) technology for net access in the country through its Dishnet DSL
Limited. After ramping up a subscriber base of 50,000 broadband and 1.5 lakh
dial up internet access accounts and setting up internet cafes, the wire line
internet business was sold to the Tata group''s Videsh Sanchar Nigam Limited
(VSNL) 2004 for Rs270 crore. The brand name ''Dishnet'', however, remained with
a new company, Dishnet Wireless Limited, the Sterling group announced its
entry into the wireless internet access sector.
of the roll out plan is to set up 6,000 WiFi hotspots all over the country
in one and a half years time. For the past thirty days Suri and his team were
soft launching around 150 hotspots in three star hotels, coffee outlets like
Barista, educational institutions, shopping malls, trade fair complexes like
the Chennai Trade Centre, Indian Trade Promotion Organisation''s Pragati Maidan
at New Delhi and others. Soon the number of will be increased to 250.
is WiFi? It is the term used for wireless connectivity to the internet or
to the local area network (LAN). It operates on a standard protocol of 802.11b
and enables internet access over a small area, called hotspot, through a transmitter.
Dishnet Wireless is not alone in this field. Bigger telcos like Bharat Sanchar
Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL), Bharti Televentures
Limited and Tata Teleservices Limited are also boarding the WiFi bus.
them the two government-owned telcos BSNL and MTNL have finalised plans to
set up around 500 hotspots. While BSNL will set up 300 hotspots in 15 cities,
MTNL will set up around 200 hotspots in Mumbai and Delhi. The two companies
have awarded the contract to the Chennai-based Microsense Private Limited.
Microsense managing director S Kailasanathan, "The installation for BSNL
will start this month. For MTNL we have already set up around 20 hotspots."
(2004-05 turnover Rs22 crore) won the two government companies after fiercely
competed tenders. "The second lowest bidder quoted twice our rates in
the BSNL tender." Apart from setting up the hotspots, Microsense will
also set up the network operating centres and provide the OSS.
will also set up and operate hotspots for the Bharti group on a revenue sharing
basis. According to Kailasanathan, Bharti will pay for the hardware while
Microsense will use its software and run the hotspots. According to plans,
Microsense and Bharti well set up around 100 Airtel hotspots in cities like
Mumbai, Delhi and Bangalore.
could well earn the sobriquet of India''s Wi Fi king. His Microsense has already
bagged over 25 WiFi contracts from hotels many of them belonging to hospitality
giants like Taj, ITC groups and coffee parlours (Café Coffee Day) in
the country. According to Kailasanathan, the company will manage around 200
other players, we have our own network management and billing software,"
plans to promote around 1,000 hotspots in six cities Mumbai, Delhi,
Bangalore, Chennai, Hyderabad and Kolkata. "In the first phase we will
invest around $3 million. The funding source will be largely through internal
accruals. We are also in talks for funding assistance."
the new contracts Kailasanathan hopes his company reaches a turnover of Rs100
crore within three years.
the consumer, Microsense'' association with various telcos presents the possibility
of roaming facilities across networks. Currently roaming is available within
only the subscribed service providers own network. Kailasanathan also plans
to offer his subscribers global roaming for which he is already negotiating
with foreign hotspot operators.
the same pie
the players are targeting their hotspots at the same market segment
hotels, restaurants, parlours, airports, shopping malls, exhibition halls
and other public places.
these, hotels are hot properties for WiFi service providers since like air
conditioned rooms, availability of broadband internet access is taken for
granted in better hotels.
is a generic demand for net access in hotels. To some extent the demand also
exists at airports and even railway stations where passengers have spend their
time waiting," reasons Kailasanathan.
hotels, providing broadband net access has become a lucrative revenue source,
similar to the telephone charges before the advent of cell phones. Normally
5-star hotels charge Rs600 per day or Rs200 per hour of internet access while
the 3- and 4-star hotels provide net connectivity for half the amount. In
restaurants the rates hover around Rs40 per hour and at public hotspots Rs25
exhibition complexes, the revenue potential is around Rs25,000 per day. Interestingly,
at ITPO''s Pragati Maidan, three service providers already offer WiFi services.
They are, MTNL, Bharti and Dishnet Wireless.
outlay in the case of a standalone hotspot is estimated to cost around Rs30,000.
For net enabling all the rooms in 3- and 4-star hotels, the outlay is estimated
at around Rs5 lakh and in the case of 5-star hotels the cost would be around
telcos affect stand-alone service providers like Dishnet Wireless and Microsense?
It is worth recalling that the moment telephone companies like MTNL, BSNL
and other private operators started offering dial up net access, the business
of companies like Sify, Dishet DSL was stymied.
Kailasanathan and Suri dismisses the notion. "In the case of telcos the
main revenue would be from voice traffic. The share of WiFi in the total revenue
will be too negligible for them to spend time and effort over. It is better
for them to outsource these from an efficient service provider."
Suri, "We have been in the broadband internet access business for the
past eight years and have learnt the trade nuances. The same cannot be said
of others." Dishnet Wireless has tied up with Pronto Network Inc for
hardware. Though Suri does not want to comment, going by the Sterling group''s
past history, Dishnet Wireless is likely to hve obtained the hardware and
the operations support system (OSS) at rock bottom rates.
specifically to Microsense'' future he adds, "There is always space for
focused players. It may look like David versus Goliath, but you know who won."
is heating up in the WiFi hotspot segment, Dishnet Wireless will have the
first mover advantage in another wireless broadband internet access space
WiMax. Simply put WiMax is the wireless substitute for the wired broadband
access of the variety provided by DSL and cable.
WiMax may appear similar to WiFi, actually it is not. The WiFi spectrum is
unlicensed whereas WiMax requires the spectrum to be licensed. More than that,
in the case of WiMax the reliability is higher and the quality of service
is expected to be better than WiFi.
Dishnet Wireless has set up five base stations in Chennai. According to Suri,
the fiscal 2005-06 will see the company rolling out WiMax in eight cities
the four metros (Delhi, Mumbai, Kolkata and Chennai) plus Pune, Hyderabad,
Ahmedabad and Bangalore.
March 2006, WiMax services will be available in 38 cities around 300 base
stations," Suri says.
out Sify Limited as their competitor in the wireless broadband segment Suri
however remarks, "Competition will come from Bharti and Tata group outfits."
As to the speeds, Dishnet Wireless would offer access speeds starting from
128 kilo bits per second (kbps) and go upwards.
its enterprise solutions, Dishnet Wireless targets corporates, business process
outsourcing units, call centers. The company has contracted domestic national
network in the quantity of STM 64 covering close to 200 cities and towns all
over India. The company is also in the final stages of finalising the international
wanting to talk about the expected average revenue per user (ARPU) Suri says
wireless access would bring in around Rs23 crore during the first year of
operations, that is, 2005-06.