KUALA LUMPUR--The provision of free Wi-Fi hotspots in the city center will benefit Malaysians and encourage greater broadband proliferation in the country, according to consulting firm Frost & Sullivan.
Last month, local wireless broadband player Packet One Networks (P1) signed a deal with Kuala Lumpur City Hall (DBKL) and the Malaysian Communications and Multimedia Commission (MCMC) to provide free Wi-Fi service in a project dubbed, The KL Wireless Metropolitan Project.
Frost & Sullivan senior industry analyst Marc Einstein said this move follows a trend in several major Asia-Pacific metropolitan places such as Hong Kong, Singapore and Taipei, which have also undertaken free municipal-based Wi-Fi programs.
"The move will obviously benefit consumers using nomadic broadband-enabled devices, but will also be a boon to businesses in the area," Einstein said.
He noted that when Starbucks started offering Wi-Fi in its stores in the United States, coffee sales went up by 60 percent as people were spending more time at the outlets.
Another potential benefit to consumers, the analyst added, is that consumers might be able to make very low-cost Voice over Internet Protocol [VoIP] calls soon with the advent of Wi-Fi-enabled mobile devices.
In the KL Wireless deal, P1 will invest 50 million ringgit (US$15.5 million) to provide infrastructure which includes the provision of 1,500 Wi-Fi hotspots, to build a WiMax network beginning with Malaysia's main tourist belt situated in Kuala Lumpur. MCMC and DBKL will invest 5 million ringgit (US$1.5 million) each in the project.
Slated to be completed by September, the hotspots will enable users to surf the Net for a period of two years for free with speeds of up to 512kbps. The project is part of MCMC's Klang Valley Broadband Push plan developed to increase broadband coverage within the Klang Valley.
P1chief executive officer Michael Lai said the Wi-Fi hotspots will be connected via its WiMax backhaul offering, which the company began rolling out in stages since January this year. P1 was awarded a 2.3Ghz WiMax license by MCMC, the industry regulator in March 2007.
"The KL Wireless project is running in tandem with our WiMax rollout in the Klang Valley," Lai said. "Our dual-mode proposition is unique; we will provide WiMax service when WiMax-enabled devices become available. In the interim, users will get to access the Internet via Wi-Fi-enabled devices."
Lai said the hotspots are expected to be ready by May just in time for the World Congress on IT (WCIT) conference, which will be held in the city from May 18 to 22. He added that P1 is "very confident that it will be successful in delivering the 1,500 hotspots by September".
According to Einstein, municipal Wi-Fi projects are generally not viewed as standalone revenue drivers and as such, P1 is striving to win consumer mindshare rather than to focus on return on investment.
"P1 is authorized to deploy WiMax and this strategy is likely to acclimatize users to its Wi-Fi service with the ultimate goal of migrating them to a more robust, higher bandwidth WiMax solution going forward," he said.
Einstein noted that since other licensees must deploy their WiMax networks soon, any effort P1 can do to build its brand will give it a head start. To date, none of the other three licensees have indicated when they will launch their respective networks.
Edwin Yapp is a freelance IT writer based in Malaysia.
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