Chennai to be WiFi-ed; Zylog to enter ISP biz via wireless platform

CHENNAI: Come June and Chennai would become the first Indian city to have a high speed wireless data connectivity network, thanks to the WiFi network being set up by Zylog Systems India (ZIL), a wholly owned subsidiary of US-based Zylog Systems.

WiFi is the term used for the technology deployed for wireless local area networks (WLAN) using radio frequency waves and digital data transmission. It is a user interface network and requires a backend wireless or wired data network for operation, apart from its international bandwidth requirements. Reliance Coomunications is ZIL’s vendor for the back end fibre network and the bandwidth.

The company, which obtained a category A internet service provider license – license to operate in all of India’s DoT circles – late in 2008, will then be officially entering the ISP business in the country. Its parent already has its offshore software development units in Chennai.

“Our network gives minimum data speeds of 1 mbps, and we are regulated by TRAI quality of service norms,” said ZIL COO R Janakiraman.

Unlike traditional WiFi, which operates out of ‘hotspots’ – spots where wireless transmission equipments are fitted to provide wired connectivity to a small area around it – Zylog’s network uses a mesh network architecture, which makes the wireless network a continuous one. Popularly called a hotzone, this works much like a mobile telephony network. Zylog’s business model would be similar. The company plans to retail network subscription to individual users on a prepaid rental basis.

Interestingly, the company has deployed a hotzone all along the railway line between Chennai and Bangalore, although subscription is available only to passengers in the Shatabdi express according to ZIL’s tie-up with the railways. “We have used the railways fibre network to pull up nodes, and are in a revenue sharing arrangement with the railways,” Mr.Shivkumar said.

The network, which is on its trial run in specific areas in the city, uses 20 wifi ‘nodes’ per sq. km., enabling a user concentration of 200 at any given point of time. “A subscribed user can log on to the internet on his laptop or mobile handset with a username and a password. Only a desktop requires an additional hardware of a thumb-sized dongle,” said ZIL CTO Shivkumar J.

The company has presently set up 140 nodes in the city and aims to complete setting up 32000 nodes in five cities – Delhi, Mumbai, Bangalore and Hyderabad, apart from Chennai - by the end of the year.

“Our cost of service is minimized since we didn’t have to buy spectrum at a hefty price and assembled our own wifi equipment. These are compact – the size of a shoebox – consume relatively lower power of 20-25 mw and do not need special towers,” Mr.Shivkumar said.

It is due to these reasons that service pricing would be low to the user, Mr.Janakiraman said. The company’s total investment in the network has so far been $2 million and would go up to $4.5 million by the year-end. It has raised its funds through debt from its bankers. The company estimates its turnaround time to be about three years.

“The network has triple pay capability – voice, video and data – and can be deployed for local VoIP (voice over internet protocol) services as and when the DoT allows it,” Mr.Shivkumar said. Presently VoIP is allowed only for international calls, which ZIL plans to monetize. “Though VoIP is the other arm of our ISP business, we continue to see better business prospects and margins in the WiFi business,” Mr.Janakiraman said.

“Our long term plan is to achieve penetration in remote areas using our low cost technology, and the franchisee model would be our mode of penetration.”