STM Term Case

Report on O-Zone networks, leading wifi service provider in India

The document gives insight into wfi industry technology trends, major players and performance of O-Zone Sunita Mishra, U110175, Sec- C 4/11/2011

Contents
Contents..................................................................................................................... 2 Introduction................................................................................................................ 3 Industry Analysis........................................................................................................ 4 3G............................................................................................................................5 Wifi (Wireless LAN).................................................................................................6 Bargaining power of buyers: ...............................................................................7 Bargaining power of suppliers: ............................................................................7 Competitive rivalry in the industry: .....................................................................7 Threat of new entrants: .......................................................................................7 Threat of substitutes:...........................................................................................7 Regulatory Policy Analysis..........................................................................................8 DOT.........................................................................................................................8 It is highly probable that WiFi services would come under the Indian governments proposed Cyber Cafe guidelines. In that case maintaining and filing logs, User Identification and setting up firewalls will hamper the growth of this service. It will also discourage potential users, and make it expensive for small outlets to offer WiFi access. O-Zones WiFi outlets are expected to come under these guidelines. 9 Market Analysis ......................................................................................................9 Performance Analysis............................................................................................12

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Introduction
O-Zone networks is a PAN India company providing wifi solution. O-Zone primarily provides wifi network in public places like Cafs, hotels, hospitals and malls. It builds long term exclusive contracts for Wi-Fi deployment at strategic sites and key locations across India and sizeable O-Zone subscriber base. O-Zone is a neutral host, public Wi-Fi provider. O-Zone networks is Creating a community of WiFi so that the person on the move can always be connected.

O-Zone Networks Pvt. Limited was founded with the aim of providing wireless internet and mobility solutions to the masses across India. It was founded by Mr. Sanjay Bobby Sarin and Mr. Dharmendra Amin. Mr Sarin has around 25 year experience and has worked with reputed wireless service providers like The Cloud in Britain. O_Zone networks is the brain child of Mr. Sarin. In 2007 O-Zone networks signed its first contact with DLF commercial Pvt. Ltd. For the last two years O-Zone Networks has been extending its footprints across India. O-Zone is fully funded and backed by Access Industries, one of leading Private Equity fund house in the world. O-Zone is the only Wi-Fi service provider in India that has successfully integrated and tested multiple Wi-Fi devices including Laptops, Nokia N-series mobiles phones, PDA and gaming consoles on a secure authentication platform. O-Zone networks adheres to Indian government internet security regulations and standards. O-Zone has successfully deployed public Wi-Fi networks across multiple DLF Commercial locations, Ansal Malls, Oberoi Hotels & resorts, Trident Hotels, The Lalit, Radisson Hotels, The Claridges, The Hans Hotels, Choice Hotels and many more.

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Industry Analysis
With the advancement of technology the need for wireless internet has increased in India. The increasing economic growth the usage of internet data, video and music download has increased over the years. The introduction of social networking sites have been giving an opportunity to youngsters to stay connected. With all of these advancements the need to mobile internet has emerged as necessity over couple of years. The mobile internet has come to existence in various forms mainly GPRS, 3G, WiMax and wifi technologies. Following diagram provides and comparative inside into these technologies.

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3G
3G, third-generation mobile technologies allows mobile operators to offer integrated data and voice services over mobile networks. 3G is a technology mostly for mobile service providers. Mobile service providers use licensed spectrum to provide wireless telephone coverage over some relatively large contiguous geographic serving area. The key feature of mobile service is that it offers continuous coverage. Last year we have seen the distribution of 3G spectrums in India grabbing lots of attention and raising huge money. From this we can understand the expected growth of the industry over the years.

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Wifi (Wireless LAN)

WiFi, refers to the 802.11b wireless Ethernet standard that is designed to support wireless LANs. The 802.11x family of Ethernet standards is for wireless LANs. WiFi LAN operates using unlicensed spectrum in the band of 2.4GH.

Though there has been a lot of talk about 3G and wifi over couple of year , still the wireless internet industry is in nascent stage in India. Now with the availability of smart phones at economic prices and increased use of laptops the demand of wireless internet is going to increase and it will add up to 300 million users over next 2 years in India as per the projection. The overall Indian Wi-Fi market (including WLAN hardware, systems integration and software services, not including embedded devices, laptops) is predicted to grow up to $744 million by 2012 (CAGR of 61.4%). The necessary market drivers are in place to propel the growth, development and deployment of Wi-Fi into a mainstream technology across the country. WLAN network gear sector will exceed $275 Million by 2011-12.

To analyse the industry lets take into consideration

Porters five

forces.
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Bargaining power of buyers:

Like telecom sector the wifi industry in India is also price sensitive. The customer is looking for wireless internet solution at lowest price possible. The aim of service providers is to provide quality service at affordable price. As switching cost is very low or almost nothing the bargaining power of the customers is very high.

Bargaining power of suppliers:

In case of wifi solution providers the list of suppliers is enormous especially in terms of technology partners. Mostly companies are tied up with reputed organizations to install and support hotspots and provide maintenance. As most companies are entering into long term partnership with suppliers the bargaining power of the suppliers have been low till now.

Competitive rivalry in the industry:

Though there are many players in the industry the rivalry has been mostly in acquiring seen in terms of starting partnership with renowned operators. Telecom operators on the other hand understand that different service providers have penetration in different sectors ( private, public, retail etc.). So they see a need to collaborate with multiple service providers where as the worth of the deal depends upon the penetration.

Threat of new entrants:

The strict regulations and security needs have kept the threat of the new entrant low in the industry. Whereas many experience players have entered with collaboration with highly sophisticated technology partners. Availing partnership with technology partners is a major barrier. Established wifi service providers are going for long term tie ups with retail chain, this also decreases the threat of new entrants.

Threat of substitutes:
In the wireless industry major substitute to wifi is 3G, which is of popular form. Currently the threat of substitute is high. But it is expected to decrease over the years, especially with the introduction of I-pads and increased availability of laptops.

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Regulatory Policy Analysis

The concern over cyber security has increased especially because of the growing terror threats in the country. To strengthen security and trace the origin to disruptive messages proper regulatory policies are required. The wifi services fall under the strict provision of department of telecommunication. The policies are stringent and being followed across service providers. Following are the guideline laid by DOT.

DOT
Department of Telecommunications (DoT) India has introduced new compliance requirements for all ISPs providing WiFi services. The regulation not only includes public hotspots but also includes residential and business WiFi applications. It extends requirements of centralized management, authentication and provisioning by the ISP for all customers. The outlines are: ISP must ensure that all WiFi access points be encrypted & secured. The list of locations includes: o Public hotspots e.g. airports, transportation hubs, schools, Hotels, restaurants, guest houses, malls & similar locations o Private hotspots or Business and offices who use leased lines and install their own WiFi Access Points (APs) o Residential & Retail customers who install WiFi Access Points. Service providers must offer central authentication and tracking system to secure all WiFi end points ensuring each subscribers access sessions are authorized and tracked. It is requires to keep records of subscriber and records need to be kept for minimum 1 year. The records must also include user metrics for full audit trace. Identity verification of each subscriber is mandatory in form of photo identity based verification using well established address proof documents such as PAN, Passport, Driver License. The particular personal Identification needs to be copied and retained for 1 year; Avoiding Internet DoT License Suspension requires ISPs to: Ensure only secure and authorized subscribers are allowed network access at all wireless end points; Accurately ascertain network access and retain records of subscriber activity including IP address & location where / when an authorized user accessed a specified Internet resource; ISPs must, upon lawful request, enable interception and tracking capabilities for agencies to track unlawful activity.

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These new requirements have come into picture especially after the dreadful 26/11 Mumbai Terror Attacks and other incidents where unsecured WiFi access points were used by antisocial elements.

O-Zone networks provide Delivers layer 2 security which prevents network from Hackers attack. O-Zone networks also has procured ISP(CAT- A) license nationwide. It provides authentication, authorization and accounting. In order to ensure that only authorized users can access the network, all users will go through a set of authentication processes that validate the identification and access rights of the user. O-Zone networks maintains log of users for 5 years, which would help to trace the user. It is highly probable that WiFi services would come under the Indian governments proposed Cyber Cafe guidelines. In that case maintaining and filing logs, User Identification and setting up firewalls will hamper the growth of this service. It will also discourage potential users, and make it expensive for small outlets to offer WiFi access. O-Zones WiFi outlets are expected to come under these guidelines.

Market Analysis
The trend in wifi market over the years has been captured in the following graph. The overall Wi-Fi market is growing at an even bigger pace and promises to take off as a whole host of professional and customization services are beginning to grow.

Market Opportunities for Wi-Fi Organized Retail is just opening up in India. It is a potential and significant user of wireless computing solutions. Wi-Fi requirement for conferences is going up.

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In hospitality sector with the increasing number of foreign tourists visiting India demand for Wi-Fi equipped hotels is growing. Hospitals are also gearing up to provide the best in connectivity, especially to connect to remotely located places. Mobile Wi-Fi will grow as handset markets use Wi-Fi for product differentiation and ISPs find innovative business models. World-class manufacturing facilities in the telecom being setup in India are being Wi-Fi enabled. Wi-Fi entering home, portable and mobile entertainment sectors. Falling consumer electronics prices and a content hungry and techsavvy younger generation are driving change.

Expanding and new office complexes will create additional demand for Wi-Fi connectivity for visitors, vendors and consultants and employees A number of market opportunities for Wi-Fi technology are emerging as the Indian economy continues to grow above 8% per year. The upcoming retail revolution, expansion in organized manufacturing and the hospitality sector including medical tourism are some key sectors. Yet another opportunity for Wi-Fi could arise from innovations being attempted to drive the overall costs of computing down. The major Players in wifi industry are 1. Spectranet 2. Tikona 3. Airlink 4. O-Zone 5. Airtel wifi 6. Aircel wifi 7. Tata indicom O-Zone networks around 60% market share as of date.

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Performance Analysis
O-Zone networks has about 5,000 hotspots across India. The growth rate of the company in terms of users is 30%, on a month on month basis. It has carrier partnerships with Aircel and Airtel for WiFi hotspot access in the domestic market. It also has international roaming tie-ups with Ipass, Boingo and Comfone. It has plans to tie-up with 20 more international providers by end of 2012. The major strength of O-Zone has been collaboration with major conglomerates as technology and service providers including best in the line names like Airtel, Oberoi Hotels, Trident Hotels, Claridges Hotel, Cafe Coffee day, Choko La, Om Book Shops, Fortis Hospitals, Ansal Plaza, Hard Rock Cafe outlets to name a few. O-Zone, a WiFi service provider in India, and Vyke, a mobile Voice over Internet Protocol (VoIP) service provider, began the roll out of their exclusive partnership to provide Vykes mobile VoIP service to O-Zones wireless customers across India from August 1,2010. O-Zone has added many new Wi-Fi hotspots for its consumer across Delhi, Mumbai, Pune, Agra, Udaipur, Jaipur, Cochin, Bhubaneshwar, Allahbad and Bangalore. O-Zone has built a wireless broadband entity that is a hybrid of owned, overlay and roaming networks across retail, commercial, leisure, hospitality, transportation and residential locations. O-Zone has joined hands with Coffee Bean and Tea Leaf to give its customer a joyful experience of enjoying O-zones Wi-Fi service. The tie-up will enable customers of Coffee Bean and Tea Leaf to use O-Zones Wi-Fi service at all the outlets of the caf chain through pre paid vouchers. The Wi-Fi services can be enjoyed by the customers at all the Wi-Fi enabled devices including mobiles, laptops and tablets. O-Zone has location partnerships with Cafe Coffee Day, DLF, Fortis, Hard Rock Cafe, and Om Book Shop, among others, for facilitating internet access. Following are the major tie ups with retail chains.

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Following are the major tie ups of O-Zone networks in real estate sector.

Following are the major tie ups of O-Zone networks in hospitality sector.

Following are the major tie ups of O-Zone networks in hospital and education sector.

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O-Zone networks also has partnership with the following organization to provide quality service to the customer.

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Reference

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About organization and history, www.o-zonewifi.com, 8th April, 2011 Regulatory policy, http://www.inventum.cc/news/dot-wifi, 8th April, 2011

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