Carrier WiFi

Commercial Opportunities in the 'Internet Anywhere' Space

In my previous blog, I examined what a real WiFi hotspot 2.0 environment would look like, envisioning a state of play in which users would have access to ubiquitous, inter-operator connectivity through the ability to easily access an integrated global WiFi network. (See WiFi 2.0: Roaming Holds the Key.)

I concluded that conflicting agendas meant that WiFi network operators large and small have created "fiefdoms," but also noted that these will face competitive pressures as their subscribers look for alternatives, and as players in the market embrace the concept of global WiFi roaming.

Customer demand for "anywhere" Internet access continues to grow and there is plenty of evidence that business travelers will go to extreme lengths (such as hanging around outside coffee shops) in order to find and connect to WiFi hotspots, and then sometimes pay an outrageous fee for the privilege.

With this kind of consumer demand, the question is not if we will get to a point when we can access WiFi wherever we are in the world (without having to repeatedly enter credit card details and credentials) but simply when we will get there, and how.

Understanding the consumer is crucial when designing the commercial model and bringing an offer like this to market: Questions need to be asked about how this will be achieved. Commercial plans to offer anywhere WiFi access are really still in their infancy.

However, globally we do see some examples of operators promoting new models that create value. They are bundling WiFi into an integrated WiFi/cellular roaming proposition, where WiFi is a value-added service that drives upsell to more expensive plans; and capturing wallet share from WiFi-only devices.

For example, Brazilian telecoms operator Oi, and Zain Group in the Middle East, are committed to the idea of "Internet Everywhere" and offer their customers access to local and international networks of WiFi hotspots. In the UK, Orange has partnered with BT to offer access to domestic WiFi hotspots, bundled as part of select mobile plans, as well as offering some tablet device-specific plans.

In the US, AT&T also offers WiFi access on a tiered basis with basic wireless services, which may come as standard with some plans.

International WiFi access, however, is a premium service.

Despite these examples, it's evident that there is significant scope for these services to be pushed further. There are clearly some rapidly accelerating trends that will ensure that WiFi access will continue to generate revenue: For example, more and more people are carrying multiple devices, such as tablets, alongside their mobile phones, and, amazingly, of the tablet devices expected to be shipped in 2013, about 74 percent are expected to have WiFi as the only form of connectivity, according to an industry report issued earlier this year.

What's more, there has also been a vast increase in high-bandwidth applications on devices that are being used to perform tasks such as VoIP calls and videoconferencing, which many users may find to be too data-intensive to be used comfortably over a mobile network connection, especially in roaming situations.

It stands to reason that telecom service providers are the best organizations to bring this value proposition to market, if for no other reason other than they are generally the go-to point for consumers in need a communications solution while traveling. While many of these service providers have been resistant to push WiFi services in the past, some have now recognized the opportunity. In addition, many of the mobile operators are seeing cellular roaming revenues threatened by initiatives such as the recent European Union legislation that capped roaming charges.

Meanwhile, new players are coming to the table all the time: Skype Ltd. has become a player in the WiFi service market, and even American Express offers WiFi access to premium customers.

Those communications service providers that have not yet embraced WiFi need to consider its potential to disrupt business models and provide an opportunity for new and varied players to enter the mobile services sector.

— Steve Livingston, Senior VP, Open Mobile Exchange, iPass

Steve Livingston iPass 11/21/2013 | 5:14:24 PM
Re: WiFi upgrades Sarah, that is correct—to create an upgrade incentive Wi-Fi would be bundled with premium plans, and not with entry level plans. Here is a good example: AT&T Data Global Add-Ons
Sarah Thomas 11/21/2013 | 9:52:51 AM
WiFi upgrades Thanks for the post, Steve! I'm curious how operators are using WiFi bundled in as a way to upsell to more expensive plans. I would think it would encourage their customers to stay on lower-tier data plans if they had unlimited WiFi usage. Or, do you mean that they are only offering free WiFi with higher tier data plans?

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