November 3, 2014

Wi-Fi for Everyone

I found this interesting article on (link here) talking about a report from wi-fi provider iPass saying that there is now one wi-fi hotspot for every 150 people worldwide. This is of course an average number as I imagine the ratio is probably much higher in the Philippines. But this just shows that when there are gaps in the market, people are quick to fill it in if it is a real need.

The research shows that majority of the hotspots are in homes as people have begun to turn home wi-fi routers into public hotspots. This works especially well in densely populated areas like Manila where the mobile networks cannot keep up with the growing demand for more bandwidth.

The market in the Philippines seems ripe for the entry an independent, 3rd party, wi-fi provider as many consumers have become disenchanted with the poor service (and high prices) being provided by the top telecom companies.

Google is starting to dabble in the wi-fi market and there are at the moment thousands of independent, non-telecom wi-fi network operators across the globe (for example, if you log into a hotel chain wi-fi network, it is normally being provided by an independent 3rd party company).

I hope that some viable alternatives begin to challenge the incumbent telecoms to improve their service. I know that these companies are doing their best to cope with the growing demand, but I often wonder if they fear that increasing mobile internet coverage (and speed) will take away from their core business as it has for other telecom companies in most parts of the developed world.

It is a very valid concern for sure, but they risk alienating customers and inviting outsiders to enter the arena at the expense of possibly trying to preserve a business model that clearly has to change (shift away from fixed mobile services like SMS and calls to providing high quality mobile data services) to adapt to global trends and consumer habits.

In the end, the telecom companies are doing what most would do in their situation. Ride out the out-going business model that has worked so well in the past until absolutely necessary to change. Unfortunately, it is the paying consumers who suffer the most. This is especially true if there is a lack of competition to challenge the status quo as is the situation in the Philippine market where only two large telecom companies, Globe Telecom (GLO: Philippines) and PLDT + subsidiary Smart Communications (TEL: Philippines) thrive.