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Project Isizwe founder: “There is no money to be made in the WiFi business”

Given his position at the head of a company which is churning out free internet access hotspots all over the country, it might be surprising to hear that Alan Knott-Craig Jnr doesn’t believe that there’s a sustainable business model in giving away WiFi in municipalities and the like. And yet that’s what he told an audience at Telkom’s SATNAC conference this moning.

“The biggest driver for WiFi is going to be that you can keep the kids entertained,” Knott-Craig Jnr said, conference. “I don’t see any business models in the free WiFi hotspot space.”

You might take this statement to mean that free WiFi has to publicly funded if we want to get more people online – Alan Knott-Craig Jnr is, after all, the founder and CEO of Project Isizwe in the City of Tshwane which is paid for by local government.

Isizwe, he says, is doing a great job at providing internet through WiFi, but it’s not sustainable.

“Getting people to buy into [the model] is difficult. Project Isizwe won’t be able to scale across multiple municipalities. In an ideal world, if we could do that, it would be great if we could monetise free WiFi,” he said.

But he’s also just launched the private WiFi hotspot business, HeroTel. Which obviously he does think is sustainable. He explained that service providers that offer free WiFi hotspots won’t be able to sell access to the internet unless it comes as part of a package.

“You won’t make money unless you have voice as well,” he said.

And that’s the crux of the matter, he says, because WiFi access has to become profitable in order to get more people online. He says that he believes most South Africans will never experience wired access and right now, mobile is too expensive.

“The future of connectivity, in my opinion, is that the top 20 per cent of South Africans will be able to afford fibre-to-the-home. The 5 million that will be able to afford DStv will be using ADSL or some wireless connection,” he said. “But the vast majority of South Africans will not be able to get on the internet [using a fixed line connection] – ever.”

He does however, believe that by 2020 we will have free WiFi everywhere that will be provided by municipalities and not private companies.

“By 2020 we will have free WiFi everywhere. The City of Tshwane has the best model for that. But the tax payer will have to subsidise the cost for rolling out the connections – just like municipalities that are responsible for the provision of water and electricity.”

[Image – CC by 2.0/Nicolas Nova]

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