What is WiFi 2.0 and what does it mean in today's services market? That is the focus of this first of four blogs, which outlines some of the factors, mainly the roaming issue, that have been standing in the way of its full deployment.
Later in the series, I'll elaborate on how the industry can drive the development of WiFi 2.0 forward, addressing topics including commercial models, technical challenges, standards development, and hardware deployment.
What is WiFi 2.0?
At a high level, the concept of WiFi 2.0 is simple: It's about delivering a seamless, secure, and globally robust WiFi roaming experience that is similar to that experienced by consumers when roaming on cellular networks.
However, only the concept is simple -- making this a reality is far more complex. The Wireless Broadband Alliance (WBA), through the Next Generation Hotspot (NGH) program, is creating standards around interoperability, network discovery, and authentication.
But the challenges go far beyond technology. The business models and practices of all the different players and stakeholders in the WiFi industry must evolve for consumers to experience this friction-free usability: They need to take into account where users can travel locally, nationally, and internationally without the need to log onto different provider networks multiple times.
The commercial fiefdoms
Today, there are several different types of players in the WiFi market, ranging from 3G/4G service providers that own WiFi networks to wireless Internet service providers (WISPs) and retail businesses -- they all have different objectives. As a result, roaming agreements among them have been limited or economically unattractive.
When we examine the different categories, some exhibit a degree of monopolistic behavior in their business models and practices. For example, with 3G/4G mobile operators it's obvious that the ability to switch between cellular and WiFi networks makes a lot of sense. Not only can they offload traffic onto WiFi networks, they can also offer their subscribers more value through WiFi roaming services and connect those with tablets.
However, enabling WiFi roaming between the WiFi networks operators own and those run by competitors is a more sensitive issue. Most, in my view, are extremely selective of whom they will work with and place onerous commercial terms on those that do access their WiFi networks, effectively creating a monopolistic environment in the regions in which they operate.
On the other hand, the small providers are concerned about revenue erosion and establish fiefdoms in response, to protect their interests. Examples can often be seen in the hospitality sector, where some hotels are unwilling to allow WiFi subscribers from a mobile operator or a WISP to roam onto their WiFi networks, as they are concerned that it will erode their daily WiFi revenue models.
Of course, this is a justifiable concern. However, by monopolizing WiFi in their hotels, I believe they risk creating customer dissatisfaction in the longer term. If someone buys a global WiFi roaming plan, they would want access to the hotel WiFi network -- and they will chose hotel providers where this is the case in order to avoid paying for WiFi network access twice. In this way, short-term revenue protection around WiFi could actually lead to longer-term loss of business across the board as customers choose alternate hotels.
These are just some of the examples of commercial fiefdoms that have been created. But not everyone is creating them: Some forward-thinking players are recognizing that as WiFi networks continue to expand in numbers and reach, not just by operators but also through community WiFi projects, the fiefdom-based business model will come under attack. These players are taking a much more open and opportunistic approach, focusing on the consumer mobile experience. They realize that consumers are expecting this experience and are choosing where to buy services based on open WiFi support.
There is an opportunity to accelerate the commercial adoption of WiFi by understanding this consumer need, which is simply the ability to enjoy the same wireless connectivity experience while traveling as they do while at home, bringing their smartphones and tablets and enjoying their apps, connectivity, and content with them wherever they go.
As WiFi deployments continue to grow, monopolies and fiefdoms will come under attack, and their customer bases will look for alternatives: That's not an easy position from which to recover, whereas opportunistic players will find ways to embrace the concept of global WiFi roaming and build a much more loyal customer base.
It will be a great contest to see who captures the consumers by providing them the capabilities they now demand. The competitive landscape is equally open to service providers, hospitality providers, travel providers, device manufactures, and over-the-top (OTT) Internet players alike.
— Steve Livingston, Senior VP, Open Mobile Exchange, iPass