Labelled “explosive” by Microsoft boss Bill Gates, wireless networking arrived in South Africa this week, with Telkom and M-Web announcing plans to pilot wireless public areas or “hotspots”.
Wireless networking, marketed as WiFi (wireless fidelity), has swept across Europe and the United States as the next big thing in the combined IT and telecommunications industries.
For typical Internet uses such as e-mailing or browsing, WiFi is cheaper than data access services via cellular telephony. Laptop users also automatically have bigger screens and more functions than cellphone users.
Laptop and hand-held computers that have WiFi antennas can access a WiFi network, which extends coverage up to 100m, depending on walls and users. For laptops without an antenna, a card not much bigger than a credit card can be inserted.
WiFi’s biggest proponent is computer chipmaker Intel, which is investing $300-million in marketing to promote its new Centrino processor and the WiFi movement it will use.
At a WiFi conference last month, Intel CEO Craig Barrett said there are already about 40-million WiFi users, and some 15 000 new access points — the base stations that broadcast the WiFi signal — are being sold a day.
The number of hotspots is expected to jump from the current 20 000 to 190 000 by 2007.
South Africa caught up with the rest of the world this week when Telkom announced it will soon provide up to 100 “hotspots” on a trial basis. They will be available free of charge to the roughly 10 000 ASDL (asymmetrical digital subscriber lines) subscribers in South Africa. This will also allow the telecoms utility to gauge the extent of demand and calculate a pricing model.
ADSL lines are super-fast, always connected to the Internet and aimed at small businesses and high-end home users.
M-Web, the country’s largest consumer Internet service provider, launched four pilot sites at Mugg & Bean coffee shops. It already has a test site at Johannesburg International airport. It is charging its subscribers R150 for 20 hours, and R1 an hour after that, as well as an option to pay for half-hour or hourly increments by credit card.
Internationally, coffee shops, airport lounges and hotels were the first major venues to provide a home to WiFi, keeping in mind its potential to extend customers’ time (and conceivably purchases).
One of the models emerging for coffee shops and restaurants gives away access time for free, usually half an hour or an hour, with a meal or coffee. Coffee chain Starbucks and fast food chain McDonald’s have introduced pilot projects based on this idea.
Telkom has 10 hotspots, called “T-zones” — two at Telkom offices and eight at Southern Sun hotels in Johannesburg, Cape Town and Durban.
“We are targeting hotels, business centres, as well as airports and shopping centres,” says Nombulelo Moholi, Telkom’s chief sales and marketing officer.
Unlike the coffee shop model, Telkom’s model targets business travellers. It also provides the new service as a wholesale access medium to other service providers.
“We have great plans for it. We realise it is going to be embraced as an access technology of the future,” says Steven White, Telkom’s executive for ASDL and WiFi product development.
“We have a focused and targeted approach. We are not overly excited about the coffee shop model and the campus model … we can provide a more cost-effective approach to real customers,” he said, adding that shopping centres are likely to play a key role.
WiFi has been slow to take off in South Africa because of uncertainty surrounding current regulation that still gives Telkom some exclusivity in providing specific services.
“Our view is that the legislation as it stands … does not prevent public WiFi hotspot use. It is very much akin to an Internet café — it doesn’t take any revenue away from the telephone company,” says Russell Dreisenstock, general manager of wireless at M-Web.
“We believe that the Independent Communications Authority of South Africa will take that position, too. The document they sent out for private sector comment seems to indicate that as well. We don’t think it is a change of regulation, but a clarification of regulation.”
Moholi says it is too early to talk about pricing and for how long it will be free. “If you look at Europe, hotspots were only launched last year. The usage patterns haven’t been clear yet. We need to look at what customers needs are going to be, and determine how bandwidth-intensive the users will be, and then allocate the cost of it.”
Telkom’s equity partner, SBC Communications, announced this month it is in the process of setting up 6 000 hot spots in the US at hotels, airports, convention centres, restaurants and other public locations.
In Europe hotspot roll-outs are widespread. Telecoms equipment maker Ericsson says it is building 5 000 hotspots in the United Kingdom alone, while Intel and the Marriott chain of hotels are installing them at about 400 hotels in the US, Canada and in Europe.
WiFi is being seen as a much cheaper means of rolling out Internet access than the cellular system, and as a major threat to the European third generation (3G) networks, the licences for which were bought at huge cost at the end of the dot com boom.