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TRAI moots ad-based models for free Wi-Fi; estimates cost at less than 2p per MB

15-July-2016
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TRAI moots ad-based models for free Wi-Fi; estimates cost at less than 2p per MB

TRAI yesterday released a consultation paper on proliferation of broadband through public Wi-Fi networks. One of the key factors TRAI mentioned in the consultation paper for providing free Wi-Fi to the general public includes the sustainability of the network.

This means that the network needs to monetise the service just like other countries in the world where a number of different models for the deployment and monetisation of Wi-Fi hotspots are in place, where the costs of access may be borne by the end user, owner of the site where the access point is deployed, advertisers, sponsors or the Government.

According to the Ericsson Mobility Report of June 2016, over 85 per cent of data traffic generated by the use of smart phone video apps goes over Wi-Fi. The study notes that although cellular data usage on smart phones is growing, Wi-Fi data growth is dramatically outpacing it.”

This indicates that the use of Wi-Fi for internet access is exploding as more mobile devices are Wi-Fi enabled, the number of public hotspots expand and user acceptance grows.

TRAI has recommended various models for the provision of Internet access through public Wi-Fi networks which include Paid model, Freemium model, Ad-based model and aggregators.

Paid model: In such a model the end-user or the Wi-Fi hosting venue bears the cost for the use of the Wi-Fi network. The venue hosting the Wi-Fi may in turn provide the service for free to its customers or indirectly build it into the amount charged to the customer, for instance by incorporating Wi-Fi charges in the price of the food and beverages served at a cafe.

Freemium model: Access is provided for free until a specified quota after which the user is charged for any additional access. The quota may be fixed in terms of usage time (e.g first 30 mins) and/or amount of data (e.g. first 500MB). This model is commonly used in airports, stations and other public places.

Advertisement-based models: The service is provided for free to the user but the provider earns revenues through advertisers and sponsors. There could be several variations of this model, for instance, the user may be required to view advertisements from sponsors or connect with the advertiser on social media in order to gain access to the network. Further, personal data collected from the user at the time of sign-in could also be monetised to earn revenues.

Aggregators: Wi-Fi aggregators like iPass and Boingo bring together the Wi-Fi networks of various operators by allowing customers to connect to affiliated hotspots around the world. The user may be required to pay a fixed monthly fee for the service or may be charged on a pay-as-you-go basis.

TRAI has also tried to find out approximate cost per MB for the Wi-Fi network. On the basis of informal discussion held with various stakeholders, TRAI says a Wi-Fi network of 20 hotspots was designed for a tier II city catering to around 40,000 subscribers and 10,000 concurrent users, it is estimated that cost per MB in Wi-Fi Network could be less than 2 paise per MB.

TRAI further mentioned that consumers on an average are paying around 23p per MB for the data usage in the cellular Network (2G/3G/4G). This shows that the consumer tariff for data may reduce as much as 1/10th in Wi-Fi compared to mobile data.

TRAI has asked its stakeholders about the challenges faced in making payments for access to Wi-Fi hotspots while asking for a suggestion to a payment arrangement which will offer frictionless and secured payment for the access of Wi-Fi services.

With the constant increase in connectivity and growth of Wi-Fi across the country mobile advertisers could be optimistic that this would only provide more avenues for advertising and marketing various brands and products among one of the largest populations of the world on every smartphone that people own.

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