WirelessCo - a new entrant in the WiFi market - will take mobile operators head on. It will be a game-changer in the way people connect to, and offer, broadband because of its carrier-grade open-access mobile; a concept that has previously not been available in SA.
WirelessCo combines WiFi network assets from Dimension Data-owned WiFi provider AlwaysOn, together with MWeb's WiFi assets, and will be 51% owned by Dimension Data, with the balance owned by MultiChoice, which is contributing MWeb's assets. Separately, Internet Solutions (IS) is buying the rest of MWeb's business units, as well as its network, and will provide a backbone to MWeb Consumer, which is all that will remain of MWeb's offerings.
IS MD Saki Missaikos says WirelessCo has the potential to fulfil SA's ubiquitous broadband aim at very low cost. He notes mobile as an alternative would be more expensive, because of the inherent costs of setting up the network. "WiFi is probably the best, if not the only alternative."
WirelessCo is being launched at a time when several government-backed projects are being run in Gauteng and Cape Town to provide free WiFi.
Derek Wilcocks, CEO of Dimension Data Middle East and Africa, says the company is "committed to making the necessary investments to ensure WiFi is available everywhere and to everyone, driving digital inclusion for all of the country". How long it will take to build the network, and at what cost, has not been disclosed.
Domination ambitions
Missaikos notes IS, which will house WirelessCo, has been driving WiFi for about the past eight years through services such as AlwaysOn, and wants to "own" the WiFi space, although it cannot go it alone, which is why WirelessCo will be open access. "You've got to get it [access] to the masses."
IS's agenda is to try and dominate mobility through WiFi, by rolling out carrier-grade WiFi infrastructure at a low cost, says Missaikos. He notes there is currently no company providing open access as a wholesale play.
Access to the network will be sold on a wholesale basis and IS wants to sign up other Internet service providers, retailers and "everyone" it can, says Missaikos. Currently, IS has about 50% of the hotspot market, through AlwaysOn, and adding in MWeb's WiFi will make WirelessCo the largest player in the space, he comments.
Despite its pending dominance, Missaikos is positive the competition authorities will approve the deal, noting "it drives exactly what government policy is". The new company already has four anchor clients: IS, AlwaysOn, MWeb Consumer and MultiChoice, which aims to use the network to stream content, he adds.
More competition
Independent telecoms researcher Samantha Perry notes WirelessCo will be a "game-changer" for Internet access, and is "pretty much taking on the mobile operators head on". She adds, however, that the drawback to WiFi is that it can only be used in a fixed location, as it cannot be "handed over" from tower-to-tower, the way mobile can.
Yet, says Perry, "an always-on lifestyle brings so many benefits" and provides business opportunities for retailers, for example, which can add services on top of the network to provide personalised services.
Perry notes it will cost "quite something" to build the network, although IS has assets it can bundle into WirelessCo, and its relationship with Dimension Data also gives it access to technical "know how" and "pockets".
Nomosphere SA CEO Ellie Hagopian notes, while it remains to be seen what effect the new company will have, it will increase competition and is a good thing for the sector, although its game-changing status depends on what value is added, such as through content. She says the bulk of global data traffic goes over WiFi, although this is mostly home and office use.
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