Why is WiFi on buses not as popular as on subways?

Public transport Wi-Fi operator 16Wi-Fi recently announced that 5,487 buses in Shanghai have officially launched free public transport "16Wi-Fi", and all Pudong bus routes have basically been covered by Wi-Fi. Prior to this, 16Wi-Fi also announced that it has opened free public transport Wi-Fi for more than 9,000 buses in Guangzhou, and buses in Beijing, Kunming, Fuzhou and other places are also covered by Wi-Fi networks.

Public transport Wi-Fi is not new. In fact, 16Wi-Fi was tried on thousands of buses in Pudong, Shanghai two years ago. Now that it is making a comeback, can public transport Wi-Fi create a new market?

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The comeback of public transport Wi-Fi

For three consecutive days, the reporter experienced free Wi-Fi access on routes 980, 986 and 1018, which have already been covered by Wi-Fi.

During the morning and evening rush hours, the Wi-Fi speed on the three buses was stable, and the online HD video was smooth without any lag. It took only 1-2 minutes to download a 4M music file. Moreover, it was not a problem for passengers to use the free bus Wi-Fi. After downloading the 16Wi-Fi App and completing the registration, the system would automatically complete the identity authentication each time they connected to the Wi-Fi on the bus. In general, the renamed 16Wi-Fi performed more stably and smoothly than the e-Route Wi-Fi two years ago.

Two years ago, eRoute Wi-Fi was first launched on 3,800 buses in Shanghai Pudong. Half a month after its launch, a reporter from IT Times tested it on multiple bus routes including Route 986. The experience was not good, and Wi-Fi connection frequently failed. For a period of time afterwards, eRoute Wi-Fi gradually withdrew from the market. Now, it has made a comeback after being renamed 16 Wi-Fi, and its momentum is particularly fierce. Not only has the 3G signal been fully upgraded to 4G, but the coverage has also been further expanded. The bus routes with free 16 Wi-Fi have been expanded from Pudong to Songjiang, Qingpu, Jiading, Fengxian, Jinshan and other suburbs. The number of covered buses has increased from 3,800 to 5,000, and the number of routes involved has reached 598.

Regarding the previous failure, 16Wi-Fi CEO Lin Feng explained that the storage of early products was SD card, and the bumpy vehicle could easily cause the SD card to loosen. At the same time, the storage capacity was small and the number of read and write times was too high, which could easily cause the device to paralyze or even damage. At the same time, all users had to go through a unified AC outlet to authenticate and obtain network addresses. Once the in and out is frequent, user authentication will be very crowded. At present, 16Wi-Fi has fully upgraded its hardware and software, not only upgrading the SD card to a 128G solid-state hard drive, but also changing the software system from thin AP mode to fat AP mode... and the investment cost of all this is 10 million yuan.

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Another money-burning road

After a brief trial in the Shanghai public transportation market two years ago, 16Wi-Fi has been silent for a long time. 16Wi-Fi explained that due to the implementation of the new cybersecurity regulations of the Ministry of Public Security, the public transportation Wi-Fi it built did not implement the real-name system technically, so it was forced to shut down.

However, funding is obviously also a key factor affecting 16Wi-Fi's expansion. Last year, Baidu promised to lead the investment, but it has not yet been delivered, which has affected the development of 16Wi-Fi. In June this year, 16Wi-Fi received 300 million yuan in Series B financing.

"The competitive barrier for bus Wi-Fi is still scale." In the opinion of industry insiders, it will be difficult to stop the pace of burning money for bus Wi-Fi in a short period of time.

At present, 16Wi-Fi has been implemented in 70 cities including Kunming, Fuzhou, Beijing, Guangzhou, and Shanghai, and has the exclusive right to operate Wi-Fi on nearly 200,000 buses. According to the backend operation of Beijing buses where 16Wi-Fi was first launched, the average daily traffic consumption of each local user is about 100M, and every 50 passengers consume at least 2GB of traffic every day. The current backend data shows that there are about 200 people connected to 16Wi-Fi in each bus in Kunming. According to the planned value of 500-800 passengers/bus, the online rate of a single vehicle of 16Wi-Fi has reached 40%, which is a very high level.

The reason for the expansion is "burning money". According to Lin Feng, the cost of deploying a Wi-Fi bus includes at least 2,000 yuan per bus for equipment installation and 400 yuan per month for operation and maintenance such as bus sites and manpower flow. Not counting time costs and equipment updates, the cost of 100,000 buses includes at least 200 million yuan for installation and 40 million yuan per month for operation and maintenance.

In Lin Feng's view, only by deploying more than 100,000 buses can it achieve profitability. 16Wi-Fi is trying to carve out a path by burning money. Its competitors are mainly small and medium-sized Wi-Fi operators in the regional market, such as Huashi Interactive Entertainment and VIFI, which have a place in Shenzhen and Hangzhou.

Industry insiders believe that in the ever-escalating competition in the mobile Internet, public transportation Wi-Fi is still a very potential offline mobile traffic portal. According to the 2015 Statistical Bulletin of the Ministry of Transport, the average daily passenger volume of taxis and public buses in 2015 was as high as 210 million, and that of urban rail transit was 38.36 million. When passengers become accustomed to using public Wi-Fi, the market value will become apparent.

Profitability remains a major challenge

How does bus Wi-Fi make money? What is the profit model? These are the biggest issues that industry insiders are concerned about.

According to Lin Feng, 16Wi-Fi is still in the investment and loss-making stage, and is expected to achieve profitability next year. Traditional bus Wi-Fi relies on advertising for profit. Lin Feng expects that 16Wi-Fi's main profit in the future will still come from advertising, and the profit points will mainly focus on three businesses: one is advertising, the second is e-commerce and Android version of the game, and the third is the big data analysis business jointly promoted with partners such as Ctrip.

At present, the functional services provided on the homepage of the Bus 16Wi-Fi App include real-time bus inquiries, news information, mobile search, videos, novels, games, website navigation, life services and other content. These may become an important way for the platform to make profits. According to Lin Feng, on the content platform, they will introduce more self-made short video resources to attract more users, and will also add social functions such as "fellow travelers" to increase user stickiness.

However, some industry insiders have expressed doubts, "The profitability of bus Wi-Fi still depends on the backward business model, but so far, there are no successful cases." Although advertising, e-commerce, O2O, games and big data analysis will be the main sectors of the backward business model, how to charge and how to achieve profitability are still unknown. But from a longer-term perspective, bus Wi-Fi can provide support for intelligent transportation through real-time communication, positioning, sensing and big data collection and analysis, and its value cannot be ignored.