Wi-Fi has become well known to consumers as a low-cost and prevalent high-speed internet access mechanism.  It has become a crucial component of the access mix for the modern, always-on, connected society and is increasingly available in commercial locations. The public sector has launched free public Wi-Fi services in most major metro municipalities and it can now be accessed on many modes of public transport: taxis, buses, trains and planes. Most services offer some free access with top-ups available.

Initially conceived as a wireless alternative for the humble office network, and contrary to all expectations, Wi-Fi has become a disruptive technology that has grown by stealth to dominate the global wireless data domain. This is true not only in terms of the number and range of devices in the market, but also in terms of the volumes of data transferred. Wi-Fi has become a crucial component of the access mix for the modern, always-on, connected society.

Wi-Fi is of key interest to both the private sector and the public sector. BMI-T estimates that as of mid-2016 there are arguably well over 900,000 fixed hotspots in South Africa. The bulk of these are in the work place, followed by residences, but there is an increasing number of semi-public and open public sites where users can get some level of free access.

Initiatives such as Project Isizwe in Tshwane (now branded ‘TshWi-Fi’) plus the City of Cape Town’s and Western Cape Government’s Wi-Fi projects have demonstrated that there are innovative ways to provide free Wi-Fi hotspots to the public at large. The City of Johannesburg and Ekurhuleni have followed and now have extensive programmes in place. eThekwini is soon to be added to this list. The Department of Telecommunications and Postal Services (DTPS) is leading the public sector push to provide more free Wi-Fi hotspots in Nelson Mandela Bay, City of Tshwane, City of Johannesburg, City of Cape Town, Ekurhuleni and Mangaung. Access to free Wi-Fi was central to several political manifestos for the August 2016 Municipal Elections. BMI-T estimates that there are around 2,100 hotspots provided by the public sector providing some free internet access.

In the private sector, Telkom dominates the market in terms of the number of unique ‘hotspot’ locations served. VAST networks, formed in 2015 from the Wi-Fi assets of MWEB Business and Internet Solutions, lies in second place but challenges Telkom in terms of the number of Access Points (AP) providing service – a single location such as a large hospital may have as many as 500 APs. Since free access, usually bounded in terms of bandwidth and/or time, is available at these sites, BMI-T uses the ‘semi-public’ nomenclature and counts around 10,000 such locations across South Africa.

The market is driven by a customer appetite for wireless data at lower cost, and supported by a maturing set of technology standards, a prevalence of WiFi-enabled smartphones, the ease of use of WiFi hotspots and the emergence of the Internet of things. In South Africa close on 90% of those aged 15 and above have a cellphone, and over half (51%) of these are smartphones and hence are Wi-Fi enabled.

Telcos, vendors and service providers are deciding where to invest and how to position themselves in this disruptive, strategic and dynamic market. New players have also emerged who will play a prominent role – content providers, location owners and government delivery functions:

  • Traditional mobile players seek to maintain customer loyalty, plug revenue leakage from smartphones using Wi-Fi, build higher-capacity networks at lower cost with Wi-Fi-handoff and gain a foothold in new markets created by Wi-Fi. To do this, they need deep understanding of the underlying dynamics.
  • Internet-access providers seek to grow the significant opportunity in providing desperately-needed last-mile and local backhaul, increase hotspot coverage and build carrier-Wi-Fi networks from which to offer wholesale and retail services. The opportunities are exponential, but the pitfalls can be deep and caveats abound.
  • Service providers across the value chain, as well as application developers, will seek to position themselves to help build and maintain Wi-Fi networks and provide and develop services uniquely enabled by Wi-Fi. They can participate in the boom of Wi-Fi enabled gadgets, products and services if they have the correct framework to understand the trends.
  • Location owners, from small café owners to hotels, are facing hard choices which are beginning to have a more profound effect on their businesses than previously anticipated – if poorly understood or managed.

Governments, in turn, are aware that Wi-Fi can make quick wins to increase broadband penetration and economic growth and are mindful of the view that internet access may be seen as a fundamental human right and that Wi-Fi forms a powerful foundation for driving universal service objectives, both in terms of regulatory frameworks and delivery:

  • Policy-makers need to ensure that competition and innovation are sufficiently enabled. They therefore need to understand the appropriate level of regulation to apply to ensure optimal coexistence on the unlicensed spectrum. Regulation levels could range from ‘light touch’ to active setting-aside of new spectrum to be accessed on a ‘managed spectrum’ basis.
  • Governments at local, regional and national level will be challenged by the multiple, pro-active initiatives and calls both within South Africa and globally to provide Wi-Fi as a means to achieving a range of socio-economic objectives.

As with all disruptive markets, there is every chance that new players who read the trends properly will emerge and dominate in a relatively short time frame, whilst others who fail to understand the signs will stall or lose significant value.

Against this background, BMI-T’s Public and Commercial Wi-Fi in South Africa report details the status quo and the outlook for Wi-Fi in South Africa and sets out to assist and support decision-makers who wish to develop proactive strategies in response to Wi-Fi, both in the private sector and the public sector.

Focus areas and objectives

  • The research, analysis and report provide a sharp focus on Wi-Fi as a commercial threat as well as opportunity. The study frames the information within conceptual models and scenarios which make better sense of the emerging trends. Focus areas and objectives include:
  • Unpacking emerging value and monetisation models from the viewpoint of key stakeholders.
  • Usage and service models and strategies for Wi-Fi are defined and developed. Predictions are made for the uptake of Wi-Fi in South Africa measured against a global backdrop, including approaches that anticipate Carrier Grade Wi-Fi.
  • Consideration of the driving forces leading both private and public sector players to support such models, and the underlying corporate and socio-political agendas.
  • Generating market forecasts for Wi-Fi, taking various deployment and uptake scenarios into account.
  • Techno-economic analysis including a view of the spectrum assignments and allocations in South Africa in the context of the global deployments of Wi-Fi.

Contextual analysis

With the advance of ‘Generation C’ and always-connected people, access to data networks is becoming a determinant in their behaviour. South Africa’s mobile industry is unique in its application of globally standardised technology and approach to market demands. BMI-T’s approach is rich in local context with the analysis tailored for the local environment.