Wi-Fi (Wireless Fidelity)

I have been reading about a humongous trend in the US. According to Fortune, wireless hotspots are sprouting like mushrooms. (If you ask me, more like the zagu or lechon manok franchise bandwagons.)

Hotspots are anywhere you can have access to a Wi-Fi network. At the end of 2002, there were about 4,000 hotspots in the US. Depending on who you ask, it is projected that there will be between 30,000 and hundreds of thousands of hotspots in the next three years. The telcos have been targeting multiple location chains like McDonald’s and Starbucks to locate their hotspots.

Setting up a hotspot is easy. One can buy a wireless router and compatible receivers like DLink or Lynksys for $500, and plug and play. For a homeowner with several PCs, wireless networking is a godsend as you avoid cabling up and drilling holes in your walls.

Globe recently launched its Wi-Fi product called the WIZ. (Hmm…did not get an invite to their launch, wonder why.) I wonder where it is targeting its hotspot locations.

For Wi-Fi to work in the Philippines, you need sufficient critical mass of laptop users. Despite the continuing drop in prices, I don’t believe there are enough laptop users to justify it yet.

Could this be another bubble? Maybe yes or maybe not, I am still in a quandary as to how the business model works in retail locations. Who makes money? In Starbucks or McDonald’s, I can’t see it. It could be argued that the Wi-Fi surfer increases his purchase of coffee or French fries while downloading. It might work in the US but in the Philippines, expect our Pinoy coffee drinkers to stretch their café latte to at least three hours. (Translation: lower table turnover, which could mean lower revenue.)

However, I do see the benefits for hotspots in hotel rooms or hospitals. In hotels are billeted the high-end road warriors who need to be constantly in touch with their home offices. For an additional $10 a day, the road warrior is plugged in. In hospitals, nurses and doctors doing their rounds can have wireless tablets (higher-end laptops) or PDAs (personal digital assistants like Palm or Ipaq) where they can input their patients’ data on the fly as well as double-check the patients’ prescriptions and records.

My Two Cents: Watch out for a company going public on the 4th of July this year. Its business model is in the wireless space but not exactly Wi-Fi. It will be hard to beat.

IT and separation

Just went to dinner with an old Japanese friend. I met him in New York when he was a client in my past life as a merchant banker. He was telling me that in the last 10 years he has been living alone in Tokyo while his wife and two kids live in California. They live apart not for reasons of divorce but because when they lived in the US as expats, the kids could not get back into the Japanese stream of education in midstream, thus they chose to stay in California. He only sees them three times a year.

I have a Filipino friend whose three boys live in Washington D.C. with his ex-wife. He could have stopped them from going but he thought they would have more opportunities if they studied in the US. He has not seen his kids since they left two years ago.

These are just two cases of family separation. Is the sacrifice of being absent from their daily lives in exchange for their future worth it?

Our OFWs constantly go through this decision tree. However, in their case, the decision is quite easy. They normally would make five to 10 times their pay. For some it might even be a choice of having a job or not.

Coping with the situation is then the only issue to address. Technology has helped bridge this physical divide.

Telephone. The simple telephone continues to be the great connector of distant families. With the introduction of cellphones and SMS (Short Messaging Service), families now text each other several times a day. Although overseas voice calls have dropped in price from $1 a minute to 40 cents a minute, the Philippines’ telecom costs are still on the high side if you consider it costs less than 20 cents to call from the US to the Philippines. (Ah…but that is fodder for another column.)

E-mail. I used to say, "How can we live without the fax machine?" These days I do not know what to do without my e-mail. In fact, I force all my suppliers to deal with me via e-mail or they are off the list. If not off the list, they can expect my response to them to be slower.

My Japanese and Filipino friends communicate with their distant families through e-mail. Some OFWs and their families, who are no longer intimidated by the computer, are encouraging a new cottage industry of Internet cafés. Some families still cannot afford to buy a PC. Even though the low-end PC has dropped to P25,000, this is still a luxury product to most of our kababayan (countrymen). Internet access in these cafés has dropped to P30 per hour in some cities.

Webcasting. Using the same Internet infrastructure, one can connect a Webcam and see your kids 6,000 miles away. Although one sees a very choppy picture, a picture is still worth a thousand words. And speak to them on the chat or instant messenger, a simultaneous version of e-mail.

With the recent SARS epidemic, some companies have resorted to videoconferencing, a higher version of webcasting. Vidcons (just made this up) need a relatively high bandwidth of at least 512 k.

VOIP. Slowly but surely, VOIP (Voice over Internet Protocol) is coming. My guess is the technology would be mature in two to three years. Despite its sounding really high-tech, this is nothing more than making voice calls using your Internet connection. The telephone company will surely fight this. This is a tsunami of epic proportions that any telephone company with a high dependence on overseas call revenue will surely be at risk. (Do I hear a sell order for TEL?)

My Two Cents: For those of you who are lucky to be in the same city as your loved ones, give them a hug while you can. You never know when the next time you can hug them will be.

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Dickson Co is CFO (C is for Cheap) for Dfnn, Intelligent Wave Philippines and HatchAsia.com. For comments or suggestions, e-mail [email protected].