Tomizone lands 105-city India wi-fi deal

Tomizone boss Steve Simms wants his company to become the Skype of wi-fi. That is, anyone with a Tomizone account will be able to secure a casual wireless internet connection in almost any location.

He’s just taken another step closer. Mr Simms (pictured) spoke to exclusively to NBR earlier this week after returning from Bangalore, where his company has just closed a deal with Reliance World - part of the giant Anil Dhirubhai Ambani Group, which has a $US80 billion market cap.

Reliance plans to roll-out Tomizone network software - which enables casual wi-fi connection and billing via credit card - at its 242 wi-fi outlets, which span 105 cities.

Auckland-based Tomizone now has four staff in India, led by country manager Girish Hiremath who has previously held management positions at Reliance, and rival telcos Tata and BPL Mobile.

For a country with 1.2 billion people, 242 outlets seems tiny (the deal is worth around $2 million to Tomizone during its roll-out year).

And even by Mr Simms’ own standards, it’s modest. In March his company announced a deal with Coordinate Technologies Communications (CTC) that has seen Tomizone software installed to run around 2000 wi-fi hotspots around Beijing and Shanghai, operated by China Mobile and China Unicom. By the end of the year, 10,000 hotspots should be operating in five Chinese provinces under the CTC deal.

But in fact, 242 hotspots equals around 20% of the Indian market, for there are only around 1600 public wi-fi hotspots in the country.

Indian law requires that a person’s identity be authenticated before they gain an internet account, which has retarded the growth of commercial wi-fi. (And complicated life in other areas; if you lack a credit card, opening a new cellphone account can entail a visit to your home by the phone company to confirm your address).

Mr Simms said that Tomizone has custom-developed cyberlaw compliance software for the Indian market. Dubbed Virgil, it is designed to ensure a user’s identity (via their credit card details), and associate that identity to a wireless internet connection.

Virgil gives his company a unique ability to deal with India’s regulatory issues, Mr Simms said. He hopes the technology will see Tomizone software, deployed though hotspots owned by Reliance and others, control a majority of public wi-fi outlets in the country.

Beyond the cyberlaw, another restriction on wireless internet in India is that there are only about two million people with wi-fi equipped notebooks at this point.

But as in many areas on the sub-continent, rapid growth is ahead. Market researcher Tonse Telecom says the India wi-fi services market will grow 300% by 2013 to hit $US1 billion.

In almost any country, wi-fi is not the only way to grab a wireless connection to the web.

But in most instances, it represents a cheaper and faster alternative to a 2G or 3G cellular data connection.

Mr Simms maintained that he does not see rapidly growing 3G as a threat to his company’s wi-fi-based business, but a complement. Looking into the future, he sees his company’s connection software managing all types of wireless connections. Many cellphones - and even notebooks - now come with both 3G and wi-fi radios; consumers will be looking for software, such as that that runs the Tomizone network, that lets them choose the best connection at any given time.

What next?

Tomizone is already the largest wi-fi operator in Australasia, with its software facilitating wireless internet connections at around 11,000 metro wi-fi, campus and coffee shop hot-spots - or around 60% of the market, according to Agitavi Research.

And a hook-up with network hardware maker D-Link, which sees Tomizone software bundled with D-Link wi-fi kits, is helping to spread a DIY version of the company’s hotspot management software.

Mr Simms conceded that the North American and European markets - unlike fast-growing India and China - are already densely penetrated by wi-fi providers.

But he still sees expansion possibilities for Tomizone everywhere, given that his company’s services platform is centrally managed via cloud servers in the US and elsewhere.

Mr Simms mused that one a could provide a VoIP service via the Tomizone network (making the Skype comparison more literal); he also sees potential in sponsored wi-fi, either though a free connection drawing punters to a retail outlet (such as, locally, the Esquires chain of coffee houses), or direct advertising through Tomizone’s sign-on page. “After all, people see our page before they see Google’s.”

Further expansion will require further capital. Privately-held Tomizone already counts Stephen Tindall among its investors. In June it will issue more Series A private equity shares in a bid to gain another major tranche of capital.