That free Wi-Fi we all love so much? Yeah, it’s never really free

It’s become a thing. Free Wi-Fi for all is the new panacea for all broadband ills and will help the poor escape their plight, bring prosperity to those who seek it. Free Wi-Fi will cure all ills and save the day, along with all sorts of other promises. Simply put it’s the snake oil promises of 2014. There is nothing free about free Wi-Fi, yet “Free” initiative are proliferating across the country from minibus taxis to trendy streets in Durban.

I have to admit it sounds good. There is no offer as good as a free one. The problem is that most people hear “free” and all critical though goes out the window. “There’s no such thing as a free lunch” is a popular adage communicating the idea that it is impossible to get something for nothing. Free Wi-Fi is no different. A more up to date adage is: if you are not paying for the product then you are the product.

There is a cost to providing any service and provision of access to the internet via any mechanism obviously carries a cost. These costs vary from very high to fairly low and Wi-Fi being a ubiquitous mass market communications medium is about as low cost as it gets in the tech industry. Low cost is still not free.

Almost all free offerings are actually freemium services, offering a pittance for no charge (such as the 50 Mbs of “free” data a month taxi users will be getting), and then have a better or more complete service for a charge. Free becomes a marketing term rather than the provision of something for nothing.

The provision of Wi-Fi has many layers and there are a number of key issues that must be dealt with. In the context of a public service that is available in open public areas, the first and most critical issue is coverage.

Wi-Fi works best in controlled environments — such as offices and homes. In an open public area, it is complex and expensive to offer blanket coverage of an acceptable level, along with basic roaming if you wander about that area.

Handoff from access point to access point is not trivial and the channels and interference from other access points must be dealt with without breaking the communication from the devices accessing the network.

The second layer is the management of the various access points from a central hub. Simply plunking down a few dozen access points and hooking them up to a network will never work well. Proper planning, design, and management has to be done. All of which cost time and money.

Once deployed, management of the network also takes expertise, and involves constant monitoring and update. All of this has an ongoing cost. Capacity and user loading of the various access points also need constant monitoring and management for best performance.

Another major consideration is the final back-haul link to the actual internet. Any public service that potentially attracts hundreds if not thousands of users needs very high capacity high speed access to the public internet. Fiber is the best method.

Fiber is still the highest cost access medium in South Africa to the internet. A high speed fiber link of sufficient capacity to service a public access system such as public Wi-Fi can run into tens of thousands of Rands per month before actual data costs.

All the above — from the cost of the equipment to the costs of maintenance and repair, to the actual cost of bandwidth and back haul — make public Wi-Fi anything but free to provide. You simply cannot ignore the fact that there are upfront capital costs along with significant monthly operating costs.

Who will pay for all of this? And if someone agrees to do so what’s in it for them? What is the return on capital for the investor, and what is the revenue model to simply cover ongoing costs on monthly provision?

These are questions that are rarely answered in all the proud press announcements of these “free” initiatives. We hear all about the benefits but rarely the costs.

Why are the above questions important? The main reason is sustainability. Once the initial grant or budget is exhausted, if there is no return on investment, interest falls sharply and the service is terminated or the quality of the services drops so sharply that it becomes another well-meaning white elephant.

Free is never free. It’s laudable to try to connect those who have not been connected before or make a service available to all for the greater good, but ignore basic economics and it’s all hot air and marketing, in the end nobody wins.

Good commercial deployments with solid revenue models and good levels of service will last and thrive. So called Free with no sustainability and no long term plan will fail, it’s as simple as that.

Image: Josh Zakary via Flickr.