Back in the days of GPRS, EDGE and even the first tottering steps of 3G, mobile operators would publicly harangue handset vendors for being too slow to produce devices that could exploit their new services. Today, that device/service dynamic has been stood on its head, thanks in large part to the ubiquity and appeal of WiFi.
Cellular and WiFi have been side by side in the smartphone for years, vastly improving device utility and user experience. Today it is the service that lags the device, with many operators apparently unwilling or unable to provide managed connectivity tailored to the capabilities of the smartphone, or to the patterns of user behavior those capabilities have spawned.
This is beginning to change, and change fast. So much so that a smartphone connectivity service confined to cellular will, before long, be about as appealing to the mass market as a smartphone without WiFi.
But the change is not coming from mobile incumbents, despite their historical role as guardians of the mobile experience. Instead it is being driven by a range of non-cellular challengers, including established fixed and cable service providers with quad-play offers and newcomers to the sector with ideas and resources on an altogether grander scale, such as Google.
Connectivity is not the product for these players. They simply want to harness it to give their customers near-ubiquitous access to content and services. So they're alive to the potential of all forms of connectivity that will help them do that: cellular when their customers are out and about and WiFi when they're indoors, at home or in public, where the mobile network often cannot deliver.
There are obvious economic efficiencies, too. Any player that has to buy wholesale cellular capacity is quick to look for ways to reduce its wholesale bill -- and just as quick to promote its ability to pass on those cost savings to customers.
All of which also enables them to provide a customer experience that, right now, is superior and differentiated.
Mobile operators are different. Their DNA is laced with network ownership and, truth be told, they are home to more than a few senior network execs whose purity of vision results in a wrinkled nose when WiFi gets a mention.
There's nothing wrong in that. WiFi, especially public WiFi, is something of a Wild West landscape; fragmented in terms of ownership and quality. Moreover, these guys have spent their careers being incentivized to build and operate the best cellular network in the market. And if you've got the best cellular network in the market you couldn't possibly need WiFi... right?
To champion a service that manages the quality of user experience whatever the bearer, then, can be interpreted as a direct challenge to the network-centric cellular status quo.
This is why, during his time on our board, former Vodafone CEO Arun Sarin was fond of classifying such a stance as a "CEO pitch."
Offer it to the network guys, Arun said, and they'll put up the shutters. But the CEO thinks in broader terms -- he or she has no entrenched function, department or world view to defend.
Unsurprisingly, he was right. All the movement we're seeing in the market right now -- in public and in private -- is the result of top-down pressure from executives responsible for strategic vision. WiFi, whether operator- or affiliate-owned, domestic or public, is increasingly being seen as a strategic resource that is pivotal to customer experience, market positioning and operational efficiency.
The question now is how mobile operators will respond. It's no secret they like to be fast followers, and more than once we've heard from MNO insiders that they would accelerate rapidly if they saw a competitor move first.
But their competitive landscape is far wider than it once was; they no longer compete solely with other mobile operators. So it will be interesting to see whether movements from large international cable players, not to mention Google, will prove the catalyst mobile operators themselves say they've been waiting for.
Owning the network may be important but owning the customer is surely paramount.
— Dave Fraser, CEO, Devicescape Software