Airstacks bets on free WiFI hot-spot market

The internet is no more a luxury but a need, and is being offered in election manifestos of political parties.

The various announcements by states and the Centre of providing free WiFi spots across cities and villages have only affirmed the changing status of the internet in the lives of Indians.

Early this year, the Indian government announced that it will step up its own efforts and provide free WiFi to 1,050 villages across the vast country under a new pilot project known as Digital Village.

Amid government announcements, private players are also working to set up WiFi infrastructure in cafés, spas, restaurants, coffee shops and other businesses, which would offer free internet services to customers.

Users are connected to password-less WiFi on venue, where they are automatically presented a self-service login through which they get secure and instant WiFi access.

Of many in the list of service providers, Airstacks is one. Launched in 2015, the Pune-based company aims to address the need for easy connectivity on the go for consumers and businesses building brands by opening up free WiFi.

Akshay Patil, Rishi Hisariya and Anup Bansod founded the company with an initial corpus of Rs 4 lakh, which was invested in hardware research and building a prototype; now with five other team members, they offer the service around 250 venues in Pune.

The startup offers various services to businesses with rates varying between Rs 1,000 and 15,000 a month, depending on the number of login access, marketing facility and other features. In the past two years, it claims to have clocked a turnover of Rs 30 lakh.

What’s there for businesses?

In return for the service, businesses get increased footfalls and enhanced customer tracking, and customers spend more time on the premises.

Airstacks believes that of all the benefits, customer tracking is the most important one for this service where businesses accumulate customer data and target ads directly to devices. This will help the customer to be aware of add-ons, specials as well as other services on offer.

Challenges

Airstacks believes that at a time when software technologies and hardware keep on improving, the company has to keep pace with the upcoming improved technologies to strengthen and mitigate the challenges.

Free WiFi market

Globally, the WiFi hotspot market size was valued over $1.5 billion in 2015 and is likely to reach around $3.5 billion by 2023, growing over 17 per cent. The primary industry drivers includes rising internet user population for personal and professional work.

i2e1 and Wiloop are some of the players operating in the same market segment of free WiFi.

In December 2015, Delhi-based i2e1 raised a seed round of $500,000 led by GrowX ventures and Singapore Angels, apart from a group of angel investors including former Infosys board member TV Mohandas Pai.

The company calls itself a smart data management platform which aims to provide low-cost and free internet to consumers and actionable analytics to providers.

Expert take

When Entrackr spoke to different experts in the sector, it received a mixed response as many expressed a negative view of the market.

According to industry experts, the WiFi hot-spot market size is not more than Rs 200 crore in India, which includes areas like coffee shops, spas, gyms and hospitals.

There is not much scope for companies to grow after a period of time and beyond a particular coverage area.

The smaller market size also stops investors from make investments in the sector, which compounds the challenge for companies when it comes to expansion and growth of the business.

Besides, launch of 4G service has made phone data extremely cheap and accessible. So people don’t require WiFi hot-spots to connect with high-speed internet services as they can do it via their phones.

Experts say the current service providers are going to come across similar challenges and may face a hard time. It will be interesting to see how these companies devise new methods to overcome the challenges.