There are two types of broadband connectivities right now:
Wired broadband has 7% penetration in India (TRAI-Nov 2016). There aren’t many people who can afford the pricing of wired broadband.
A majority of the people whose average mobile data bill is high are from the same 7% of people.
Excluding the top 10% of Internet users in India, what remains is low income group market.
Of this market top 50% of users comprise of the LIG market, about which we have done studies and experimented in the market.
LIG has following characteristics
POP installation is carried by XtraWiFi technical team. Each POP is capable of handling 10,000 WiFi routers. Other than the number of hotspots, geographical proximity is taken into consideration while installing POP.
POP requires UPS, OLT and rackmount device (XtraWiFi server). Rackmount device is an Intel atom based processor with 4GB RAM and 4GB solid state HDD.
After coming out of the XtraWiFi Office, Only the IP address configuration is required on the XtraWiFi Server. Everything else is automated.
Landing Point does not have any configurable devices. Installation is straightforward. Take devices from the packing and place them in a particular order: semi skilled technicians can install a landing point with ease. Training required for this technician is 3 days.
One landing point is required for each village.
Router installation is the simplest of all. Any technician who can crimp CAT5 cable with RJ45 jack can carry out the installation. Training required is 1 day.
Testing is carried out by on field technician by browsing on his/her smartphone. It cannot get simpler than that.
GPS positioning is done automatically from the router after installation. The hotspot is visible on the map within 2 minutes of physical installation.
All configuration required in this case is done automatically by the servers in the cloud after presence of wireless router is detected.
Time required for installation (ignoring reaching the location, permissions & material availability):
This market is about 5 times bigger than the wired broadband / premium market. This market segment contributes more revenue than the other segments to telcos. There haven’t been too many telcos which have catered specifically to the concerned market; yet they enjoy the high revenue that the LIG market delivers for their meagre services. Telcos can tap into this available resource to further multiply their revenue; but there is still the fear of reduced revenue from premium customers that holds them back.
LIG market does use wired broadband, albeit through sharing. About 5 people come together and take wired broadband service at a common location. They install a router and share the service amongst themselves. At times fights break out about the usage and contribution. They prefer having individual connection so that they have control; but they cannot afford the opulence.
Telcos are aware of the LIG market; however, they cannot afford to offer better services to this segment because they fear of reduced ARPU (Average Revenue Per User). ARPU has been driving the strategic direction of telcos.
LIG market uses the mobile data with small recharges. Aircel Rs. 24 plan (125 MB, 3 days) is one such example. Telcos do not declare the statistical segregation of their revenue but a significant portion of their revenue comes from small recharges.
XtraWiFI has identified this market and designed a solution for this market.
Taking advantage of the fact that LIG is densely populated and geographically segregated has made it easy for implementation of solution.
We do not implement XtraWifi in areas where there are premium market consumers; not because we do not get revenue from non-LIG market, but because we want to complete covering LIG area and then cover other areas too. Returns per hotspot are higher in LIG areas is a contributing factor to this decision
During our beta trials, we have focussed on LIG areas. Since these areas are densely populated, one hotspot covers more number of users. In extremely low income group areas like slums, our coverage is much higher.
We sincerely hope that our service will help them come out of this area and move to premium service. This is nation building, isn’t it?
Since the cost of implementation of XtraWiFi is low, the pricing is designed in such a way that we offer our services with small margin while professionally maintaining the infrastructure.
XtraWiFi pricing is specifically designed to cater to LIG market. The premium market does not find this pricing very attractive. But to the LIG market these are very attractive prices. We have perfected the pricing based on our study and market experiments. We have changed our pricing 4 times within 6 months.
Let us look at some numbers to analyze the service utilization data for the month of January 2017 in Mallepally area.
Statistical highlights of XtraWiFi prepaid services for the month of January 2017:
We have observed that large percentage of users are not floating users. They use the service from their place of work or near home.
Let us look at rural broadband market objectively. There isn’t a lot of demand for wired broadband services in rural areas. The infrastructure cost to cover rural areas is so high that cost of providing wired broadband service to this market is almost 6 times that of urban areas. Adding to the fact that there isn’t enough demand to compensate for the high infrastructure cost, there isn’t a large penetration of commercial private players in the market.
Rural market is almost entirely left to the telecoms market, who are not willing to offer services tailored to LIG market needs; they fear losing their prime customers’ revenue as mentioned above.
Rural Market perfectly fits into the LIG market by definition. The only difference being that they are not as densely populated as urban areas. Nevertheless, it is well compensated by the fact that there is not much WIFi interference in rural market.
XtraWiFI has identified the needs of the LIG market and designed products and services catering to the aforementioned. Rural public WiFi will increase penetration of high speed broadband in the country; this will fuel growth of the country to its rightful place in the world.