In most developed countries, the PC penetration happened before the Internet and mobile

telephony arrived. However, in India, mobile penetration (for basic voice) has already exceeded
PC penetration several fold. PC sales are growing at around 25% year to year. Notably laptop
sales have been doubling. While the linkage to Wi-Fi growth from PC penetration is not a strong
one in itself, increase in PC and broadband penetration especially with the policy push from the
government, could be a big boost to Wi-Fi deployment, especially in rural India. The single most
enabling factor for Wi-Fi in developed countries has been the rapid increase in laptop usage.

The macro-economic trends in India are also driving increase in the adoption and consumption of
Internet data, voice and video in various forms. In the following subsections, we describe the
usage of Wi-Fi based Internet at home, in the enterprise, public hotspots, city/municipal
networks, campus networks and rural deployments.

India’s Wi-Fi market

India’s Wi-Fi market has an interesting set of components many of which are small today but
have a huge promise of growth. A high level view of the market includes WLAN gear (this
includes the Access Points, routers, PCMCIA and PCI cards for Wi-Fi connectivity) and a fairly
large professional services component (this includes Wi-Fi pre-certification services, testing,
customization and design services, custom application licensing and systems integration
revenues from a variety of software services organizations).

India WLAN Network Gear Market

The overall Wi-Fi market is growing at an even bigger pace and promises to take off as a whole
host of professional and customization services are beginning to grow. In addition to existing
Wi-Fi IP products and services, testing and certification, custom IP build-out, licensing revenues
from specialized IP targeted at global verticals (such as the automobile industry, the retail
segment, transport and logistics) are all beginning to be built in India for the global market. This
market is estimated to grow into a $744.017 million by 2011-12. This estimate includes WLAN\
network gear, system integration services around these network deployments, custom software
development and consulting, testing and certification services in the Wi-Fi space developed in
India for both Indian and global customers. This estimate does not take into account embedded
Wi-Fi components in laptops, embedded Wi-Fi devices such as handsets and consumer
electronics. (Wi-Fi market estimates here do not include embedded chip sets in laptops and
devices).

India’s Wi-Fi market

The combined Wi-Fi superset market for India promises to be much larger as the smart phone
segment and PDA like devices are just beginning to emerge. As the cellular market adds on an
average 5 million new subscribers every month, dual-mode Wi-Fi equipped handsets are
beginning to emerge. They are currently premium devices and are priced in excess of $400.
According to one major chipset maker, the Wi-Fi ‘attach rate’ will likely touch 20% of the
handsets sold by 2010-11.
Wi-Fi Access Points: Public domain Hotspots, Kiosks

Wi-Fi hotspots in India are being implemented by systems integrators, ISPs, and some telecom
operators. The hotspot market itself has evolved since the initial blitz of 2003-4 when there were
number of announcements by two major ISPs – Chennai based Dishnet Wireless and Sify Corp.
Both these firms are major players in the broadband consumer market. Dishnet Wireless had
announced its plans to open 6000 hotspots and Sify announced its own rollout as well. This laid
the ground for the expectation that several thousand hotspots would be created in the country
during the ensuing span of 2-3 years. However, after those much hyped up announcements, the
hotspot rollout plan fizzled out. Sify is instead continuing to offer its broadband offering to
homes and businesses using a combination of fixed wireless for back-haul and cable-Internet for
the local loop. Dishnet Wireless (DW) has also confirmed that it has called off its original
hotspot rollout plan and is deploying hotspots now where the demand is certain. All the major
systems integrators have reported to that their hotspot deployments have gone up by 20% since
last year. Systems integrators are good a bellwether for hotspot deployments since in most cases,
even when commissioning entities are ISPs, Telecom operators, or airports themselves, the
actual implementation is done contractually by the SIs.

In specific terms, the growth for hotspots in India is primarily through deployments in hotels,
coffee chains, and airports. Major airports already have Wi-Fi hotspots, more airports are likely
to join the league this year.

Airport authorities in tier-2 towns are currently charging hotspot providers high monthly flat
rental fee, which is impacting profitability. Hotspot providers would prefer a revenue sharing
arrangement with airport authorities instead of flat rates.

While the premium hotels are convinced about the need for hotspots because of globetrotting
travelers carrying laptops, the mid-range hotels were initially slower to install Wi-Fi because
they had not been experiencing a concentration of laptop users at their hotels.
India’s Wi-Fi Eco-system:

Billing and Administration Of Wi-Fi Hotspots

One of the major issues India’s hotspots are facing – particularly at airports and coffee chains is
billing. Systems integrators have reported that in most cases pre-paid usage cards are being used
to charge customers use of hotspots, but these solutions pose administrative difficulties, are not
seamless, and sometimes do not work at all. A second problem is roaming accounts for travelers.
Travelers are often reluctant to buy fixed slots of time from hotspot providers if they cannot use
leftover in another airport elsewhere. At the time of writing of this report, national roaming
accounts are yet to come on offer from hotspot providers at the airports. Billing and roaming at
India’s Wi-Fi hotspots remain in need of seamless solutions. This presents an opportunity to
Wi-Fi solution providers.
Market Opportunities for Wi-Fi

• Organized Retail is just opening up in India and is a significant user of wireless computing
solutions.

• World-class manufacturing facilities in the telecom and automotive sectors being setup in India
are being Wi-Fi enabled.

• Health care seeking tourists are driving demand for Wi-Fi equipped hotels; hospitals are
gearing up to provide the best in connectivity.

• Mobile Wi-Fi will grow as handset markets use Wi-Fi for product differentiation and ISPs find
innovative business models.

• Wi-Fi entering home, portable and mobile entertainment sectors. Falling consumer electronics
prices and a content hungry and tech-savvy younger generation are driving change.

• Wi-Fi penetration in conferences/convention centers going up.

• Expanding and new office complexes will create additional demand for Wi-Fi connectivity for
visitors, vendors and consultants and employees.

A number of market opportunities for Wi-Fi technology are emerging as the Indian economy
continues to grow above 8% per year. The upcoming retail revolution, expansion in organized
manufacturing and the hospitality sector including medical tourism are some key sectors. Yet
another opportunity for Wi-Fi could arise from innovations being attempted to drive the overall
costs of computing down.

Indian youth continue to drive the needs especially in the media/entertainment vertical. Cell
phones are particularly popular, and have become devices not just for communication but for
value added services like gaming, music, mobile chats, and m-commerce. Entrenched experience
in mobility from cell phone usage, will continue to drive the need for access to high speed
wireless Internet services not just for business needs but also for entertainment needs for the
younger generation. A recent news article in Business Standard reports laptop sales are also
being driven by purchases by youth between 18-30 years. Meanwhile MP3 players like the
Apple iPod are becoming popular given the popularity of Bollywood movies and music.
Wireless internet, like the rest of the world, has also taken India in its grip. With time, the
demand for wireless internet service is growing in India. In order to meet the soaring demand for
wireless internet service in India, a number of companies are offering variety of plans for
wireless internet connection. There are a number of wireless internet providers in India:

1) Tata Indicom
2) BSNL
3) Reliance
4) Airtel
5) Spectranet