Comcast is putting millions of WiFi hotspots to more profitable use through new agreements with Asian cellular carriers KDDI and Taiwan Mobile.
According to Reuters, Comcast Corp. (Nasdaq: CMCSA, CMCSK) has signed deals with the two big Asian operators to offer WiFi as a service to their subscribers traveling in the US. Instead of paying high mobile roaming charges, customers of KDDI Corp. and Taiwan Mobile Co. Ltd. can access Comcast's WiFi network for Internet connectivity on the go.
Only two weeks ago Comcast said it planned to extend its WiFi footprint to 8 million hotspots by the end of this year. And in March, Comcast Senior Vice President Tom Nagel described WiFi as "our mobile network of choice" in an interview with Light Reading. Nagel said hotspot usage is on the rise and that very few Comcast subscribers have opted out of the company's neighborhood hotspot program. The neighborhood initiative turns home routers into dual public/private access points. (See Comcast Whips Up More WiFi and Comcast's Home Hotspots Heat Up.)
Comcast isn't the only provider with broad WiFi ambitions. Cablevision Systems Corp. (NYSE: CVC) CEO James Dolan recently teased the introduction of new and "disruptive" WiFi data products. On the telecom side, AT&T Inc. (NYSE: T) is selling its WiFi network to overseas carriers in much the same way Comcast has done with KDDI and Taiwan Mobile. The US telco signed a deal with Spanish startup Fon last October. (See Cablevision Plots WiFi Market Disruption and WiFi Spreads Like Wildfire.)
Cable companies have been looking to find a way into the mobile market for years. Now that WiFi has proven successful, operators are experimenting with different ways to monetize network access. Service providers are selling WiFi day passes, while also considering offering WiFi as a cellular backhaul alternative and using WiFi analytics to deliver location-based advertising. (See Cable Finally Sees Money in Wireless.)
As a direct mobile alternative, however, WiFi still has many shortcomings. Using unlicensed spectrum, WiFi creates a best-effort network. There are no quality guarantees and cable companies still face multiple technical challenges.
Roaming between WiFi networks is one critical issue. Industry standards organizations are working to solve the roaming problem through a new Hotspot 2.0 specification, but it will take time before most consumer devices are certified to support the technology. (See Can Cable WiFi Scale?)
Another critical issue is the effectiveness of home-based hotspots. Although cable companies are adamant that public traffic on a subscriber's home router has no impact on the household WiFi experience, Light Reading has heard multiple anecdotes suggesting problems exist.
For instance, WiFi chip maker Celeno Communications told us that service providers need more fine-tuned control over bandwidth allocation and quality assurance. The semiconductor company has its own solution called OptimizAIR technology, which allows for dynamic, real-time control of the WiFi user experience. Again, however, technical solutions are still in the early deployment phases. The complexity involved means the consumer experience will continue to be far from perfect.
It's no wonder that service providers are working overtime to lobby Washington for more spectrum. Everyone sees more revenue potential in the future of WiFi. Now providers need to work out the technical glitches to realize that potential.
— Mari Silbey, special to Light Reading