Price Matters, Where Public Wi-Fi is Concerned

Causation always is suspect when people say something needs to be done to spur economic growth by the means of better internet access. To be sure, virtually everyone behaves as though there is a causal relationship between internet access and economic growth, even if that cannot be proved.

Quite often, an argument can be made that the reverse actually makes more sense: quality internet access is a result of economic growth or existing wealth, not the cause of those developments.

On the other hand, it bears noting that value and price relationships do have a causal relationship to consumer buying. As with any desired product, lower prices cause more buying of that product.

Way back in the days of dial-up internet access, when most such dial-up services were sold on a metered basis, AOL leapt to leadership of the market by abandoning metered pricing, offering monthly access for a single flat rate.

The point is that, when new supply is added to the market, price matters. In most markets where there is high use of Wi-Fi hotspots for data offload or internet access, the incremental cost of using public Wi-Fi is zero. Low prices should spur incremental use in some markets, but just how much remains to be seen.

Public Wi-Fi now is seen as an important way to make fixed network internet access more widely available in India. As always, much will hinge on market dynamics. In many other markets where Wi-Fi offloading is prevalent, the offloading happens when consumers offload to their own personal internet services. In that sense,  high use of Wi-Fi is dependent upon, and derivative of, widespread fixed network adoption.

Public Wi-Fi (mostly amenity services) also tend to get significant usage because access happens “at no incremental cost” (“free”). It remains unclear how demand will fare in India, if public Wi-Fi hotspot access is a “for-fee” service.

Ironically, high public Wi-Fi usage might be a derivative of already-existing supply of internet access at affordable rates. not a driver of new and affordable supply. So it remains to be seen how well the new push for public Wi-Fi succeeds.