When Information Holds The Key

As WIOM tries to fill a gap it identified, its ability to do so effectively in record time promises to be tested.

Evidence that areas don’t rub off on each other despite proximity is amply demonstrated by Kusumpur Pahari, a mini slum near Delhi’s posh Vasant Vihar, where residents don’t live any kind of charmed existence. Lack of drinking water and electricity, non-existent sewage, open drains with cockroaches, lack of sanitation of any kind and even open defecation is what they grapple with on a daily basis and have coped with for decades.

But since August 2021, a new excitement has entered this basti of around 30,000 dwellings, a previously unknown stranger that is vying for attention with Haldiram namkeens, Rs 10 Lays chips packets and soft drinks for youngsters and children but at times even with more basic household needs in families.

Ever since WIOM started offering data connectivity at rock bottom rates at its first location in the city, kids, in particular, can’t get enough of the Rs 10 coupons that allow them to latch onto a WIOM Internet router nearby and watch YouTube videos, banned TikTok jokes, songs or literally anything they can use to relieve boredom and forget their daily travials. Many first time adult users too are getting hooked as they begin to grasp the ocean of information an hour on this service throws up. Jobs on naukri and other sites, study courses and even getting hitched through shaadi.com: a whole host of previously unavailable information has become accessible to them for prices they can actually afford. It’s life changing for many.

Kusumpur Pahari is one of the 1000-odd unorganized colonies across Delhi - like Laxmi Nagar in East Delhi or Uttam Nagar in West Delhi where WIOM is now offering broadband connectivity at a price 75-80 percent lower than regular fixed-line broadband with the intention of bridging the “information inequality” they have identified, a resource more valuable than gold, as it holds the power to change life trajectories forever. This silent mini-revolution is currently taking place at 75,000-odd locations in Delhi where the company has installed its routers and is offering its service to many first time users

Dream But Dream Small

The right piece of information at the right time is what changed the trajectory of Satyam Darmora ‘s life. Growing up in a tiny village of Darmwaari, Uttarakhand with just 50 homes, the local government school teacher’s son Satyam, now 40, didn’t know much about the outside world and didn’t have very big dreams. He’d read a book as a child which told him that the President of India earned Rs 15,000 a month as salary and this was what he dreamed of achieving. In addition, Satyam wanted to own a motorcycle. That was the extent of his dreams back then.

A bright student, he used to regularly come first in his class of 9 students and was expected to make it to an ITI or a Polytechnic by his family based on his academic prowess. Nobody in his family - including him - had even heard of the IITs, let alone considered studying at one. A chance mention of an institution called IIT by a friend in his late teenage years is what made Satyam aim higher than anyone around him dreamt of. His close competitor who stood second in the class and rival who threatened him through his school years is now in a clerical bank job, not a bad outcome in itself but not perhaps maximising his potential.

It was at the Rose garden in Delhi as he waited for his IIT counseling to begin that he began to grasp how little his exposure to the world had been in his twenty years of existence. For the first time, he saw young lovestruck girls and boys sitting on benches in the park with no care in the world, he felt he was in an alien land. In his tiny village, the only females one ever encountered or interacted with were your sister and mother.

His IIT exposure opened his eyes in ways he could never have imagined as he watched his peers plan to go study or work overseas or in general understood what all was possible if one put one’s mind to it. As he absorbed everything around him, he decided his wisest course was to follow the herd, most of whom seemed to know exactly where they were headed. He applied and got into IIM-Bengaluru for an MBA and then headed to Tokyo in 2005 where he got a job with American Express from campus.

Japan was even more of a life changing experience than he expected as two facts became very clear to him. One, facility with English was not the only determining factor in any society’s development: the Japanese spoke none or little English but were using gadgets and technology far ahead of anything he’d seen anywhere in India. Two, he learnt life lessons from ordinary taxi drivers in the country, who would switch off their meters once in the vicinity of where you wanted to reach so as not to charge you extra while they helped you find your exact address. Coming from India, this approach to life stayed and moved him.

Despite doing well at American Express, Satyam returned and joined the Michael and Susan Dell foundation in 2008-09 which had by then begun operations in India and which allowed him to work on a range of projects including many early stage investments in start-ups on behalf of the foundation that helped him traverse the length and breadth of India in a way most other jobs wouldn’t, deepening his understanding of the inequalities that beset it.

It was after seven years at the foundation that Satyam decided to bite the bullet and fix the biggest problem he saw staring him in the face. As his own life had demonstrated, the right information at the right juncture is key in determining one’s future and too many Indians and the youth in particular suffered on account of the fact that they had limited access to information. During his stint with Dell foundation, he saw and began to appreciate the power of strong leadership and business models, the impact of working at scale and what it does to livelihoods: like what Uber had done to taxi driving in the country. The desire to make an impactful contribution in a gap he could clearly spot seemed attractive.

WIOM (Infinite or Universe) Is Born

What does one do to help millions who don’t have the resources to fulfill their dreams ? For Satyam, information had been a great trigger point. As he researched, many facts stared him in the face. Only 9 percent of Indians and 16 percent of households in Delhi have home WiFi (fixed line broadband) or 8-10 GB of Internet. A majority of Indians access the Internet through mobile data but in a country of 1.5 billion, only 5 percent buy a plan of 1.5 GB per day (at Rs 300 a month) and a majority of those who have mobile phones opt for 2 GB a month data plans. In a country where the average revenue per unit of mobile users is Rs 170 per month, only a very small and select few could afford to pay for as much mobile data as they required or desired. Most made do with far less.

Of the 5 percent who are on a 1.5 GB per day plan, this is often divided between a family of five so at most someone - especially the children who don’t often have their own devices - are at best able to use the phone to access the Internet for 300 MB or barely one hour. Even one hour of usage on the phone means 2 GB data used up!

So, as far as Satyam and his team (more on this later) could see, the demand is by far outstripping supply. Emerging India, as per their estimates, needs or wants at least 10 GB data per day. To watch for instance the India-Australia World Cup final for eight hours would need 8 GB of data which would cost the user Rs 150-200 extra for that day itself even if he or she had a 1.5 GB per day data plan. Moreover, out of 31 crore households in India, 18 crore have cable television but only 3 crore have home Internet. “The arbitrage is 20 times. When people are given home Internet, their consumption increases 20 times”, says Satyam.

Further, in the last two years, the prices of mobile Internet have in fact risen by 35-40 percent. But even if they were to rise, WIOM doesn’t see that denting their demand in any manner. “We are not service providers but distributors or matchmakers in an already functional market. An Uber or an Ola is not affected if the prices of petrol or cars go up or down”, points out Satyam.

Although they didn’t have a background in telecommunications or mobile telephony, he and a couple of co-founders who he’d managed to convince figured that they could create a platform and be a disruptor on the lines of an AirBnb (they don’t create their own homes) or Uber (they did not invest in their own cars): both the organisations picked up those who already had what was required but started distributing it better. Couldn’t they pick up or buy Wifi from those who had excess and sell it to those who needed it but couldn’t afford it at the price points available ? Be an AirBnB or Uber of the Internet ?

Uber Of The Internet

By 2015, Satyam had managed to pull in three co-founders: two former American Express colleagues Nishit Aggarwal, an SRCC and IIM Indore alumni who led lending risk management for international markets and IIT Kharagpur alumni Maanas Dwivedi, who led the analytics for risk management vertical. They also managed to bring on board Ashutosh Mishra, an alumnus of NIT, Bhopal who had worked in the tech team at Microsoft and Adobe.

As the WIOM team soon discovered, there are over 1800 Internet Service Providers (ISPs) and over 200,000 small cable operators. But these are unable to service millions of Indians who need Wifi since their models are pipeline models with high fixed costs and limited reach. A majority of users cannot afford the fixed Internet charges, both for installation and subscription.

That’s when they realized the many regulatory barriers that existed. It was only when PM-WANI was announced in December 2020 that it became possible for WIOM to function. The policy allows two things: one, it allows individuals or entities to sell extra unused Internet plan data and two, it allows aggregators: players who can resell unused data without creating any back-end infrastructure or assets.

WIOM took four years (2017-2021) to build its technology from scratch and this platform allows it to buy unsold or excess data from ISPs and offer it directly to consumers in areas and at price points which neither the mobile operators nor the ISP provider can service with their backend costs. The company installs its router at the customer’s home - 80 percent of their customers are first time Internet users - and then their tech platform allows them to sell the excess data to anyone in the vicinity of the router like a coupon or a pass for as low as Rs 10 for a day of unlimited data in 24 hours. It offers its family plan and service at rates almost 75-80 percent lower than regular ISPs where the upfront costs of installation and other hardware required are over Rs 2500. By building this feature in their tech stack, WIOM has ensured that customers who subscribe to their family plan also have access to their data services at all 75,000 live locations in Delhi, not just where they live.

After Delhi where it continues to add locations, it has started operations in Meerut and Mumbai with a on the ground sales team of around 200 and 90 full-time employees on its rolls. By December 2024, the company hopes to have covered at least 300,000 locations across a few cities in India. Its current revenue is around Rs 50 crore on an annual basis but it is targeting Rs 150-200 crore by the end of the next year. It has raised around US $ 15 million (Rs 120 crore) in equity and has a debt line of around Rs 35 crore from banks and venture debt funds. A chunk of its investment is going into tech building (around Rs 20 crore since inception) and securing the best talent in terms of people.

The Multiple Dangers of Dreaming Big

In Satyam’s family, providing for your family and achieving some degree of success is actively encouraged as is living by the right values: be honest, be a good human being, be good to others, make money honestly. While these morals and ethics have been drilled into him and his siblings from the start, they’ve also been encouraged to stay within boundaries. Dream but don’t dream too big has been the message But infinity or the universe to his family is treading into dangerous territory of dreaming too big, which they believe can have adverse consequences. His wider family, he says, remain a bit wary of his ambitions.

Family aside, there are many who remain skeptical about the core proposition, its viability, plans, and prospects. Right from the logistics a business like this entails to the regulatory and execution risks, many neutral outside observers and some angel investors argue that WIOM’s journey might not be a piece of cake.

To begin with, if the opportunity is big, there’s no reason it won’t attract many me-toos firms. Goa-based angel investor and IIM-Ahmedabad alumnus Rahul Basu, who has worked with ICICI and Enron in finance roles, argues that there have been similar attempts in the past in the areas of mobile telephony and roaming data but as far as he knows, none have been huge successes for a variety of reasons including high execution risks.

Jayesh Desai, former partner in the infrastructure space with EY and who did a short stint with Uninor, argues that one risk he sees is that the ISPs who sell them their spare Internet capacity might start squeezing them on purchase price if they find they are succeeding. Some might even attempt to ape their model. Second, he argues that customer acquisition and distribution would be critical for success but this is where he has seen many startups stumble.

Rujan Panjwani, former Manipal Institute of Technology engineer and a finance expert raises many red flags. He says that while he can see how there might be a demand, the supply end might not really be lucrative enough to entice people to lease or rent out their excess data. Moreover, like Desai, he feels that the service providers of landline and mobile telephony/data might eventually resort to predatory pricing to prevent such competition as this would go against their business models. Lastly, he argues that there is always a regulatory risk since even one security breach due to someone using your wi-fi connection and IP address with malafide intent can lead to severe repercussions.

The concerns expressed by outside observers and stakeholders vested are not unfamiliar to the WIOM team (raising two rounds of funding often throws up all possible stumbling blocks!) and they have been grappling with these since the word go. While they don’t see the ISPs as their competition - they are helping them by distributing their excess capacity to customers they can’t viably serve - the WIOM team contends that it does have a first mover advantage in particular their tech platform and stack with an investment upwards of Rs 20 crore, which they have built from scratch and are constantly refining with a team of 35-40 people in the team, handpicked from the best institutions. To prevent me-toos, the company has also applied for a total of seven patents, of which has received one patent for its system and method for real time connection with WIFI-enabled user devices. Moreover, it has full control over its routers through its tech stack, which enables it to meet and monitor all security protocols.

The WIOM team says that they are already aware of some smaller and newer entities who are looking at or considering entering this space although not the ISPs who have neither the mindset, orientation nor the tech expertise required to pull off something of this nature. However, seeing the size of this opportunity, they do expect some credible competitors to enter their territory and give them a run for their money in the next 12 to 24 months.

As things stand, the biggies in the home Internet space - Airtel and Reliance Jio - have bigger fish to fry (as they roll out 4G and 5G all over the country) and are hence not actively pursuing the space and audience WIOM is targeting as yet.

While Satyam and Co. are not overly worried about competition for now, what he’s most concerned about is the execution risk that they know any opportunity of this size brings with it. To cite just one instance: almost 15 crore households in India have cable television and are ripe to buy a WIOM connection but these are geographically far spread out, across tiny towns and cities and many potential customers converse or are comfortable with vernacular languages, all of which makes their task quite a challenge. The fact that one can see the sheer size of the addressable market puts pressure to try and scale in double quick time and in making it to the finish line, the sprinters must ensure they don’t trip and fall.

Aditya Misra, director at Omidyar Network India (ONI) and an IIT Mumbai alumni who sits on the board of WIOM, says that he thinks the team has a clear head start in which to quickly and efficiently build something of a reasonable size before competitors fully realise the potential of the market. A consumer-centric approach to the business - the team is constantly asking is this what works best for our customer - and an asset light model are two distinct advantages in their favor as he sees it.

Meanwhile, Satyam and his co-founders are well aware of the fact that reaching the Next Half Billion, as one of their investors ONI refers to this segment, is easier said than done in more ways than one. While this is the single most motivating and challenging factor for the trio, it is also what gives them sleepless nights. But as Africa’s first woman president Ellen Johnson Sirleaf once said: if your dreams don’t scare you, they aren’t big enough.

(Note to Readers: This content was commissioned by Omidyar Network India. We are bringing readers an abridged version of the original.)

(Anjuli Bhargava is a senior writer and columnist based in Goa.)