O-Zone Scripting Success with Wi-Fi Enablement in India

At a time when government of India is going all out to ensure digital enablement - connectivity becomes critical and whether it is business users or end customers - Wi-Fi is one technology that is gaining ground and importance when it comes to connectivity.

Keeping this thought in mind, O-Zone Networks is focusing towards taking Wi-Fi connectivity to the next level in India.

Sanjeev ‘Bobby’ Sarin, CEO & Founder O-Zone Networks speaks with Zia Askari from TelecomDrive.com about the way O-Zone is looking at increasing Wi-Fi envelope and why Wi-Fi is going to be even more important in the coming year.

What are the priorities that O-Zone has for India?

Our priority is pretty straightforward. We believe that over the next decade there are going to be roughly 800 – 900 million people that are going to struggle to connect to the internet. Secondly the 3G Networks are getting congested, call drops are getting worse and that is mainly because of the technology and the congestion that is happening on the spectrum.

The third point is that 4G is coming to market and operators are going to have issues for the next 2-3 years because there are not enough 4G devices in the market for the customers to connect directly to the 4G network. The way customers will connect to the network is via WiFi and then over to the 4G network.

And there is a fourth problem or gap in the market or opportunity for O-Zone, whichever way you want to look at it, is that there is very low penetration of internet in the market. It’s roughly about 8-10% compared to 50% in China and 95% in the US. So India has a long way to go.

And the last point I’m going to make is that there is a huge infrastructure gap in the country. Digging roads is very expensive and the operators are not digging as much anymore as the return on investment takes a long time. That’s why wireless has leapfrogged fixed-line telephony in this country. That’s why there are billions SIMs in the market, close to a billion handsets in the market, close to 450 million smart phones in the market.

Coming back to the question – what’s our strategy?

Our strategy is simplistically a land grab situation. We are looking for high footfall locations like Mumbai Airport, hospitals, and hotels etc. where people are going to use WiFi and we are locking those contracts down for 10 years or longer and then we are rolling out WiFi in those locations.

We are like another tower business. We bring in the broadband into those locations and we connect everything up to our backend, which sits in the cloud. So then what we do - say we have 8000-10,000 locations – we go to an operator and say do you want your customers to use our locations? We have this number of locations and over these locations we have an average monthly footfall of 75 million people for example.

And they say yes we want that network but we want that network to be white labelled. Now what does that mean for a consumer? That means if you are a Reliance customer and you go into a McDonalds tomorrow, once Reliance has signed up with O-Zone, and you want to connect to WiFi under the Reliance brand because there is a Reliance SSID being broadcast in the locations, you can connect to the reliance WiFi network. And the Reliance network today is under the brand name of RZONE.

So today how many operator partnerships do you have?

We have one today - Reliance Communications. And I confidently say that within the next 2 months we will have signed up more.

Today how many customers would be touching O-Zone networks, on a monthly basis?

Out of our network we have about 7,000 hotspots deployed and 1500 of those are public. In India there are regulatory requirements of KYC that we have to do as a public WiFi operator, one you need an ISP license, not everybody can operate a WiFi network.

What I mean by public is that - You can go and download the O-Zone app and register. Once you’ve registered to the O-Zone app, then you can roam across all the 1500 locations. What I mean by non-public is you cannot take the O-Zone app and go into Oberoi Hotels and connect, because that’s a closed Network.

Out of 1500 public locations we are seeing an average of 4.5 to 5 million customer sessions happening a month. The other interesting thing is that a year ago we were burning about 22 Terabytes of capacity a month, we are doing over a 140 TB a month today.

That is a huge jump. That shows you that our average user session is 42-23 minutes and customers are burning about 50 Megabits of capacity per session. It’s huge. 60% of the activity is video.

I wanted to understand there are certain technologies like DAS, Small Cell, Femto Cell enabling connectivity to locations such as stadiums or Golf course or sports complex etc. From an operators perspective these technologies are fitting the boxes. Operators can do things at a certain level and when it comes to last mile connectivity they are definitely looking forward to either these technologies or maybe other?

Technologies like Small Cell, Femto Cell, DAS are technologies that go into stadiums, shopping malls to booster cellular signals. One of the big issues with 3G and 4G is that as the technology comes in the building, the signal deteriorates heavily, because of the physics of the technology. In India that problem is compounded even more because the buildings are concrete.

That’s a challenge that operators are facing, because they cannot afford to put a booster or a miniature DAS in every single room in the country. There is no business case for that. It will be too expensive. What do they do?

They know a large percentage of the country already has WiFi in residential apartments, in office buildings so they are going to ride on the back of that. So when it comes to DAS we are looking at programs where people have called us, as there is number of IBS (in building solution) companies that have built technology in buildings and campuses in universities and stadiums and they are asking us to come and overlay Wi-Fi on the same technology. The opportunity for players like O-Zone is that the other players don’t understand the Wi-Fi business.

When we ask them these questions they say they are ready to invest in Small cell/ Femto cell. Unless they understand that it is the overall ecosystem approach they have to take to amplify the communication. It is very difficult for an operator to look at plugging those gaps in the last mile.

Ask a simple question when you talk to any of the operators – When you want to make a voice call today or you want to do a whatsapp message -do you select the base station you want to connect to before you make the call. You should ask that question.

And, if you don’t do that if you start building standalone networks all over the country you are almost making the user to re-register every time they go to somebody else’s different network and connect again. One of the big answers coming back from worldwide Wi-Fi users is they find the process of login very cumbersome and 30 to 40% of consumers worldwide stop the activity in between because they don’t want to keep doing it.

They want a seamless exercise just like cellular connectivity, they don’t want to think they just want to dial-in to make a whatsapp call over WiFi and don’t want to login again. If operators start building their own networks all over the country the consumer experience is just going to shatter. They will kill the whole hope of the users wanting to offload onto the network.

Operators are very anxious these days and they are under a lot of pressure, for margins and so much competition, network issues and the biggest issue is JIO coming in the market. They feel a lot of pressure on what to do and how to react.

There are two sides to Wi-Fi.  From the telecom operators perspective it is everything to do with monetization. The user side - Wi-Fi has to be useful in uploading all things to the network and watching movies and so and so. So as a technology how is Wi-Fi evolving to handle these two paradigms?

1st Why the operators worldwide look at Wi-Fi –

To de-congest their current networks-so they have looked at this as moving traffic on their congested cellular networks, on to Wi-Fi like in stadium, hotels etc.
The other thing is Wi-Fi is really taking off because its been the video service medium for most of the consumers as well as the operators. It’s the ideal way. If I ask this question-How often do you watch videos on 3G compared to when you watch videos at home. I very rarely look at videos on 3G because of the experience but more so because of the cost.
3rd reason that operators are looking at WiFi is because of the lower of cost. If you look at the cost of per megabit on 3G today (excluding the license cost) it is mostly promoted at 22 paise per mb. We can get the mb cost down to 5 – 10 paise today.

With volumes to come in years from now we may be able to get it down even lower. It shows you we are already 50% the cost of a cellular network or a 3G network. One of the senior guys in one of the mobile company in India told me - it is cheaper for us to push the traffic to your network and make money than keep it on our own network.
If you look at the technology itself Wi-Fi has grown through different standards A, B , G ,N , AC and AX. We are at AC standard today .AC standard means it has offload capabilities in the technology, but also it has one gig of speed .If you compare the AC standard with 3G, 3G has 7.2 megabits of speed, 4G has theoretically 75 mbps of speed. Wi-Fi is far ahead and the AX standard that is coming out in 3rd quarter 2017 will have 10 gig of speed.

There is no cellular technology in the next few years to come that will ever come close to this, it will always be ahead. For example to download a one gig, 2nd half hour of high definition movie at home it will take you 60 to 90 minutes and it will cost you probably 100 rupees out of your data plan.

One of the technologies we built is for a company called Speedfetch (micro cashing), and fundamentally that allows consumers in an O-Zone environment to download a one gig, 2nd half hour of high definition movie as fast as 40 seconds with zero broadband cost. This is the game changer for India. This is where we believe the 800 million people will go.

What are the growth opportunities that you see in India? The other question would be around offering Wi-Fi as a service opportunity for ‘n’ number of customers. You can have operators, enterprises and SMEs as your customers. So are you looking at that kind of model as well?

The growth prospects are actually huge. We have put a plan together that in the next 4 years the company is going to be generating over a billion dollars of revenue. So, we are pretty comfortable and conservative that that is going to be achievable.

That is doing a worse case plan…and that is with a million hotspots. If we multiply it, which I believe the market in next 10 years needs probably in the range of 20 to 30 million hotspots because of the size of the country and the lack of infrastructure. The business plan looks obviously very differently. You can just pro or deprata the revenue alongside.

So, the prospects are huge. If you look at our business model, we charge our partners on a per mb basis and as I mentioned to you, traffic levels were running at 20+ terabytes a year ago and today, we are over a 140 terabytes… you can calculate the growth yourself.

Now this is purely with one operator, and as we go to 16 tenants the traffic levels shall explode. The other checkpoint you should look at or talk to, and I can connect you with them if you need to, is Google for example. Google is experimenting for Wi-Fi at railway stations, as you would know. And what they are seeing is 16 times more data usage on a single Wi-Fi user than 3G at the railway stations. Now we can argue that it is free, but at the end of the day, the consumer is still consuming 16 times more data. So, when they get to a commercial model for charging …I hope that answers your question on growth prospects…its huge. When I present to an audience and to my critics who are out there, I say how many of you guys stay connected to your cellular network when you go home.

We talked about Wifi offload and we know that’s a huge opportunity and that needs to be there. But there is also a number of retail products. So, if you go and talk to McDonalds or Costa Coffee, and if you want to do a survey of who is buying what at their stores, whether the person is male or female, what is their age group, etc., they would not know.

What they do is they go and talk to a thousand people, and that is how they do their survey. They have about 20-22 million people a month across the country. Now with Wi-Fi, the type of things that we can do and we are in the process of doing is – now they are of setting up WiFi kiosks - ordering kiosks at McDonalds…How this works is that you enter McDonalds and then go straight to your seat and your Wi-Fi app registers with the location, and because of the wifi network it  identifies where you are sitting in the store. And then over the app and the kiosk, you place your order. After 5 minutes the food is delivered to your table. Now because you have registered to the McDonalds app, we know that it is Bobby Sarin, that he is of age 50, we know other things like he is a diabetic and other stuff.  But all of that information is now registered.

We also know that Bobby comes back to McDonalds three times a week, and the location he likes better than any other is South Extension. Now, ‘wifi as a service’ what I am talking to you about is something like the next big thing, the next Google…a hyper local data analytics. What does that mean? That means, today Google knows when Zia goes onto internet, they know what you search and if you are searching for an iPhone on Flipkart, immediately your next search will give you more advertisements from Flipkart. But they don’t know you are sitting in Ghaziabad or in Costa Coffee. They don’t know your hyper local nature of what you are doing.

The other big thing, I remember talking to the Costa Chief Operating Officer two years ago, and he asked us to do this…we were sitting at the CP outlet and he said, “Bobby, I have the Costa App. How do I make sure that when people are driving on Janpath and they cross my store but are not coming into my store, how do I send them a message to pull them into the store saying, “Bobby come in and get a Café Latte at 30% off. Your signal goes out 50 meters. ” This can be done only over wifi and no other way.

We are building all of these types of hyper local products, we are ahead of the competition by far and we have launched some of them and we are going to be launching a lot more as we go through the year. This is where people are scared of us because we are going to have much more products for the retailers.

This is because Vanilla Wi-Fi is easy, anyone can go in and put a Wi-Fi router and offer public Wi-Fi. But actually to add a lot more value services to the retailer, the operator, the e-commerce company and the consumer is a very difficult thing to do. I hope that answers your question.