Wifi in Chile grew 120% in 2005

Public Internet connection spots, or hotspots, in Chile grew 120% during 2005, reaching 678 connection points across the country, according to the Wi-Fi map compiled by the Center for Digital Economy Studies of the Santiago Chamber of Commerce (CCS).

Public Wi-Fi access reaches 678 points

Source: Santiago Chamber of Commerce

Checking your email from a café, confirming a hotel reservation from the airport or the bus terminal, sitting down to work on your computer in a metro station, a park or the university courtyard, is an increasingly common practice in our country. According to the Wi-Fi map compiled by the CCS Center for Digital Economy Studies, the number of public hotspots registered in Chile reached 678 in 2005, of which 49% are located in the Metropolitan Region and “light up” 0.13% of the capital’s surface area.

Public connection spots, or hotspots, are physical spaces where a wireless Internet connection can be established using Wi-Fi (Wireless Fidelity) technology within a radius of roughly 50 to 100 meters. These connections can be made in public or private places, depending on the kind of access they give users. Public connections can be open (as in a restaurant) or closed (as in a university), while private connections replace traditional wired networks in companies, institutions, and even in the home segment.

Growth in recent months has been relatively moderate, after a strong push in the deployment of wireless antennas in early 2005. The change of business model in the system, which in many cases went from free access to paid access, has caused a slowdown in demand that will have to be absorbed by the market and/or reconsidered by the supply side. It is currently estimated that there are close to 100 thousand lit points in the world, of which 37 thousand would be in the U.S. and 12 thousand in England. Latin America, for its part, has 4,300 points, of which Chile accounts for 16%. Nationally, the bulk of the connection points are concentrated in the Metropolitan Region (49%), Region X (18%), Region VIII (7.8%) and Region IX (7%), which together absorb more than 80% of the national supply. It is worth highlighting the Puerto Montt “lit city” project, a joint effort between the municipality and the private sector to offer free wireless connection across the whole urban area, benefiting a resident population of 175 thousand people and a floating population of 100 thousand.

In our country, public hotspots are located mainly in cafés and restaurants (32.3%), service stations (17.1%), and hotels and tourist centers (10.2%). Supply is heavily concentrated in these three segments, although a large increase in connection points can be seen in hotels and shopping centers. The café and restaurant category is the most dynamic and, more importantly, a segment with high growth potential. According to the results of the latest World Internet Project study (PUC-CCS), Chilean Internet users are going online more and more often from places other than the traditional ones, namely workplaces and educational institutions. Today’s Internet user checks email more assiduously, looks up information on the Internet, and even carries out transactions from connections at public points such as cybercafés and/or facilities equipped with Wi-Fi connectivity.

Although we are surrounded by these “lit” points, seeing the light is not so easy. First, we have to consider that to do so you need a mobile device, whether a cell phone, a PDA or a notebook, fitted with a card that receives a Wi-Fi wireless signal. Then, to connect to the network through one of those hotspots, in some cases you need a plan with one of the provider companies, which can cost between CLP 10,000 and CLP 30,000 approx. per month. Another possibility is to buy prepaid cards, which cost an average of CLP 24 per connected minute, compared with a cybercafé that offers broadband for CLP 9 a minute. In Puerto Montt, in one of the lit zones, there are around 40 hotspots serving approximately 10,000 users. In a country with a geography like ours, it is far more convenient to provide mass connectivity through wireless technologies than through cable installations. Still, this technology has its limitations too. To light up Santiago completely with Wi-Fi technology, you would need close to 260 thousand hotspots and an investment of more than 50 million dollars. To achieve the much-desired 24/7 connectivity, new technologies are currently being developed that would allow it at lower cost.

Wi-Fi zone

Wi-Fi MESH, or “mesh networks”, is a variant of Wi-Fi in which the coverage area provided by the traditional hotspot is extended by devices that “repeat” the signal, thereby eliminating the problem of signal loss when you are far from the access point. With this new technology the repeater devices communicate with each other without the need for cables, establishing one big macro bubble of coverage that would make it possible to provide continuous, dynamic connection across an entire city, at a much lower cost than traditional broadband since it eliminates the expense of cabling.

WIMAX: (Worldwide Interoperability for Microwave Access) is a type of wireless transmission, based on microwave technology, designed for use in metropolitan areas, allowing access over areas of up to 50 km, at a transmission speed of approximately 70 Mbps. This technology would be very useful outside the capital, since by allowing connectivity without cables, installation costs in remote places drop drastically. Intel, ENTEL and other companies are currently running pilot plans, and it is expected that by the end of this year Wi-Max will be making waves.

Estimates for 2006

For 2006, growth of 25% is expected in the number of hotspots across the country, while the number of users will reach levels on the order of 60 thousand. This will depend on several factors, among them the behavior of Wi-Fi device prices, the business models and prices set by connectivity providers, the maturity cycle of users, and more importantly the capacity to generate applications based on the principle of ubiquity, such as virtual hard drives, corporate web mail, ERPs on Internet platforms, voice over IP, etc.