Wi-Fi in Brazil, a Conversation with Reinaldo Rodrigues, Strategic Planning at Linktel
Can you tell us a little about Linktel?
Linktel Corporate has been licensed by ANATEL (Agência Nacional de Telecomunicações, the National Telecommunications Agency) in Brazil to provide telecommunications services throughout the country, offering of voice and data services mainly to the enterprise market.
We have our own Metro Ethernet backbone in the Sao Paulo region, composed of microwave radios and fiber optic links and we have coverage in most Brazilian cities. We generated $10 million revenues in 2016 and operate around 16 states in the country.
What about your Wi-Fi deployments?
Linktel has about 5,000 access points around the country and access to 6,500 public hotspots in several areas including from roaming partners such as Trustive, Boingo and iPass. Very small percentage of our access points are hotspot 2.0 compliant but our network has been “approved” by the Wireless Broadband Alliance.
About 80% of our access points are indoors and less than 10% are 802.11 ac with the majority being 802.11n, from Cisco. We have deployed in large outdoor areas such as the largest soccer stadium which has over 300 access points deployed, all outdoor.
Who do you sell to?
We serve various markets such as transportation (airport, highways), hospitality, malls, sport arenas, large venues, hospital, retail, restaurant, among others. Linktel enjoys premium locations and some notable customers include: Infraero (+50 airports in Brazil) McDonalds, Starbucks, Multiplan, CCP, BrMalls, etc. We have about 500 enterprise customers which generate recurring revenues and also generate revenues from one-time marketing campaigns for airports, shopping malls or events in large venues. We also provide Wi-Fi offload services to our telecom clients including TIM and Telefonica and lease SSID in airports, for offload or advertisement.
What is the most promising vertical?
We provide Wi-Fi to 300 McDonalds, 100 Starbucks, so Quick Service Restaurants along with retailers are dynamic markets and we have many projects in our pipeline with big retail chains like supermarkets Carrefour.
In many cases, these prospects do not have realistic expectations, they require very precise location based services which are achievable only if a substantial investment is made in the network with additional access points and a more robust software platforms to integrate with their existing databases and systems. So, we need to spend more time educating our prospects about what is needed to get what they want.
What Wi-Fi platform do you currently use?
We use the venue management and offload solution from Aptilo but have developed our own captive portal content management.
What challenges do you experience in terms of serving the ad market?
Ad agencies asks more information like ad servers which require more capabilities, more data so we need to leverage the infrastructure and put more content in the network to generate more revenue. For instance, we have 10 million unique users for which we need to build more intelligence on analyzing usage in order to leverage cross and ad selling.
Are you generating a profit with Wi-Fi?
Wi-Fi is not profitable yet. Revenues, from offload are increasing but still low at 3-5% of total income while advertisement generated 10-15 % of revenues and the rest is coming from our connectivity services. However we are looking at new business models to accelerate profitability.
What are the particularities of the Brazilian market?
Wi-Fi will become a viable alternative for MNOs who are trying to deploy DAS systems which are expensive and require authorizations which are a headache to obtain. We believe the combination of smalls cells and Wi-Fi has a promising future in the country.
Further, Brazilian mobile carriers are not well positioned to provide great service to venues and public locations, they are busy migrating from 3G to 4G which this is taking all their CAPEX and attention so that represents an opportunity for us.
Most of the Wi-Fi providers in the country do not want to go into the CAPEX model because it is too expensive and business owners are not willing to pay to provide free Wi-Fi to their consumers so we need to find the right business model which solves this equation of Low OPEX, CAPEX with Wi-Fi as a service.
Are cable operators active in Wi-Fi?
No, like Claro, they made acquisitions but the integration is still ongoing so they are still selling triple-play services. Telefonica is investing in fiber, FTTH, FTTX, so it is not so vested into Wi-Fi. We provide 3G offload services to TIM in Brazil, some 3G offload and are working proof of concept with other carriers.
In terms of future growth?
We are looking to reach at least 20,000 hotspots and deploying a combined 10,000 access points in the next 24 months. We have good agreements with Cisco, and HP to help us with long term financing which helps us sustain our Wi-Fi as a service model.
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