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China Mobile Abandons WiFi Rollout

Ray Le Maistre
7/11/2014
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Having built out a network of 4.3 million hotspots at a cost of 17 billion Yuan Renminbi (US$2.75 billion), China Mobile has put a halt to its WiFi deployments because the economics don't stack up.

Instead, China Mobile Ltd. (NYSE: CHL) is directing all its resources towards its 4G TDD LTE network rollout, and is on course to have rolled out more than 500,000 basestations in 300 cities by the end of 2014. (See China Issues 4G TDD Licences.)

Meanwhile, China Telecom Corp. Ltd. (NYSE: CHA), which has only just been handed its FDD LTE license, is forging ahead with its WiFi access point deployments. (See China Issues More 4G Licenses.)

For the full story, see this blog by Light Reading's Hong Kong-based contributing editor, Robert Clark.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
8/6/2014 | 3:29:37 PM
Re: Has any large scale WiFi deployment ever worked out?

How about Gogo Wireless or Boingo? Large-scale hotspots is their business. 

I guess I need to define "large scale" -- because, to my knowledge, Boingo and Gogo are targeting specific niche markets in airplanes and airports and specific retail locations. So that's a very different model from wireless "everywhere" that would or could be competitive with LTE wireless coverage.

nasimson
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nasimson,
User Rank: Light Sabre
7/12/2014 | 9:55:33 AM
Re: $3 Billion Down The Drain?
Its not $3 Billion Down The Drain. Surely not. China has dense urban areas that are thousands in number. Before 4G, WiFi was the only option to complement mobile services with higher than 3g broadband Internet.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
7/11/2014 | 7:44:15 PM
Re: Has any large scale WiFi deployment ever worked out?
mhhf1ve - Oh, darn. Here I thought I caught you out at something. :)

How about Gogo Wireless or Boingo? Large-scale hotspots is their business. 
mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
7/11/2014 | 6:33:50 PM
Re: Has any large scale WiFi deployment ever worked out?
FMW, I wasn't trying to hide anything... offering free hotspots is a great promotional strategy for Google and others, but I'm legitimately trying to find out if there's ever been a pure large-scale WiFi network buildout that supported itself as a business. I know a bunch have tried and failed.. and I know there are some small scale WiFi hotspots that target very specific users and use cases that seem to do okay. But... large scale WiFi? hmmm..
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
7/11/2014 | 5:22:21 PM
Re: Has any large scale WiFi deployment ever worked out?
mhhf1ve - I saw you palm that card. A loss leader is not necessarily a failure. It can lead to greater profits for a company. It's a perfectly legitimate business strategy -- if it were not, restaurants would not offer free bread. 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
7/11/2014 | 5:20:53 PM
Is WiFi a short-term solution?
Will technology such as small cells and the emerging 60 MHz network make WiFi obsolete?
mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
7/11/2014 | 4:29:15 PM
Has any large scale WiFi deployment ever worked out?
The history of large Wifi hotspot networks is filled with failures and overbuilding that didn't make economic sense in the end. It makes me wonder what telcos are thinking when they come up with these plans to build out large WiFi networks. I'm not sure I can think of any large scale WiFi network that became economically sustainable. Users generally think of WiFi as a free add-on, and few are willing to pay for spotty service.

Can anyone give an example of a large Wifi network that is not a loss leader?
mendyk
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mendyk,
User Rank: Light Sabre
7/11/2014 | 12:45:47 PM
Re: $3 Billion Down The Drain?
The point is that mobile operators were using WiFi for offload, i.e., to handle traffic that their conventional networks couldn't handle. As Mr. Clark points out in his blog, there is little direct revenue to be gained from that for mobile operators. So once stronger networks are in place, WiFi offload becomes a revenue drain. The end game is to have robust mobile broadband networks that do not require WiFi. For other operators and businesses, WiFi is a very different value proposition. And  obviously it's great for end users.
CraigPlunkett
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CraigPlunkett,
User Rank: Moderator
7/11/2014 | 12:26:24 PM
Re: $3 Billion Down The Drain?
I think the money quote from the blog is that they built Wi-Fi where users were less dense, which is a backwards approach.  Wi-Fi is a small cell technology, suitable for nomadic urban use in dense areas.  You have to build it where the customer density is.
mendyk
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mendyk,
User Rank: Light Sabre
7/11/2014 | 11:56:44 AM
Re: $3 Billion Down The Drain?
Well, it's not $3 billion flushed down the hole -- there's still value to extract from that. The point is that WiFi offload becomes less relevant as better-performing networks are put in place.
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