Saturday, November 24, 2012

Why Wi-Fi does not have a future in the long run - an argument based on domestic power generators in India

I'll give the same argument here that I gave during a guest lecture by Ashish Wadhwani, Partner at IvyCap Ventures, in our Corporate Strategy class on 16-Nov-12.

Wi-Fi [including hotspots and tethering] is a temporary solution to the core problem of having a pervasive, low-cost, high-speed, always-available wireless network. Sooner or later, the world will have such networks, and these will most likely be provided by telecom service providers. Just like today we have nearly-universal, always-available, highly-reliable, and low-cost wireless networks for phone calls and SMSes [particularly in developed countries], we will eventually have networks with these desirable attributes for wireless data needs too.

Think about diesel- or kerosene-powered domestic power generators, widely used in homes in India. Why do people install these generators at their homes? It's because the electricity supply in India isn't reliable. Power outages are common and frequent, often unpredictably. Hence people purchase and install their own power generators to compensate for the lack of pervasive, nonstop, reliable power supply. Do people in Singapore also own and use domestic power generators? No, because the power supply there is clean, nonstop and overall reliable.

And sooner or later, this will be the case with India too. India will eventually have a power supply that will be clean, nonstop and overall reliable. You can bet that Indians will then stop feeling the need of having their own generators, and hence will stop buying them. A domestic power generator is a temporary solution to a bigger problem.

You can begin to see the parallels. For similar reasons, as wireless networks keep improving in every dimension, the stopgap solution that Wi-Fi fundamentally is will be needed less and less, as people will increasingly rely on seamless wireless networks provided by telecom companies. So instead of localized pockets of high-speed wireless provided by conversion of wireline broadband into Wi-Fi, there will be all-encompassing wireless networks. Whether 4G does this or 5G or 6G is not the question. The real issue is that this change will happen in the next couple of years.

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