(ECNS)-- D-Guiyang, the award-winning free Wi-Fi project in Guiyang, capital of southwest China’s Guizhou Province, has suffered nearly 10 million yuan （$1.45 million） in losses in the three years since it began offering the service.
Project operator Guizhou Fanya Xintong Internet Technology is a joint venture between the Guiyang People's Government, major Internet and data center service provider 21Vianet Group and Foxconn, the world's biggest electronics contract manufacturer and a key Apple supplier, along with e-commerce giant Alibaba.
The service allows people to easily access the Internet free of charge after passing verification on popular social networking app WeChat or through a cellphone text message.
Guiyang was the first Chinese city to offer city-wide free Wi-Fi services accessible through a smartphone, tablet PC or laptop. The province, one of the least developed regions in China, has become a leading hub for China's big data industry, gathering Tencent and other global tech giants.
The original plan for D-Guiyang was to complete the project in three years with an investment of 2 billion yuan.
Song Xiajin, marketing director of the company, said D-Guiyang has now covered main streets, the airport, bullet train railway stations, parks, squares and other public spaces in the city by installing 4,500 access points. Actual spending for the project so far has totaled 120 million yuan.
D-Guiyang has 110,000 daily users on average and 3.4 million monthly users, according to the company, but many have complained about slow Internet speeds. A telecommunication expert said current technical difficulties mean users cannot get a quality Internet connection.
Tao Pei, a mobile Internet analyst, noted the rise of 5G will mean the end of Wi-Fi services, which suffers from Internet stability and safety problems.
The bigger challenge is that the company has failed to find a business model to become profitable. It had planned to collect user data, perform data masking first, and then sell it at the Guiyang Big Data Exchange, but the approach proved unsuccessful.
Song said as part of city infrastructure, the project needs mostly governmental funding when the business model is unclear. He said the local government only provided several million yuan in three years while the company itself lost nearly 10 million yuan.
It struggled to win business contracts and at the same time had to downsize from 100 employees to the present 32.