"WiFi is a threat because we're vulnerable," the CEO of a Tier 1 US mobile operator said as he explained how the acquisition of a hotspot operator would enable his company to co-opt that threat. "It's coverage where they want it and speed where they need it."
No, you didn't miss a big merger and acquisition (M&A) story. That was VoiceStream CEO John Stanton at the 2002 CTIA show, where the hot topic was whether cellular and WiFi were friends, enemies or something in between. Stanton shared the keynote stage with Boingo Wireless founder Sky Dayton, who agreed that some synergy was in order: "Sooner or later, it's 'Your chocolate fell in my peanut butter.'"
That analogy must have stuck with Tom Wheeler, who was there as CTIA president and CEO, as he dusted off part of it a few weeks ago when announcing that the FCC would free up another 100MHz in the 5GHz band to alleviate WiFi congestion. "In 2014, licensed and unlicensed spectrum are more complementary than competitive," Wheeler said. "They are less oil and vinegar and more peanut butter and jelly."
When smartphone usage skyrocketed circa 2008, that synergy was in the form of offload. But that role is becoming secondary as mobile operators find additional uses for WiFi, including as a way to enable international roaming and get around LTE's band fragmentation. That's one key finding from the new Heavy Reading 4G/LTE Insider, "Carrier Wi-Fi Roaming: Old Dog, New Tricks."
For example, in April 2013, AT&T added 1GB of data per month to its 300MB and 80MB Data Global Add-On package via Boingo's hotspots in 30 airports. "I don't look at it as necessarily freeing up capacity on the cellular network," says J.R. Wilson, AT&T vice president of partnerships and alliances and Wireless Broadband Alliance chair.
Many hotspot aggregators agree: "We believe that the industry has moved beyond offload," says Brian Metzger, iPass head of marketing for global channels. "The approach the mobile network operators are taking with WiFi is far more thoughtful and far more sophisticated. They're now looking at WiFi as a strategic integrated network asset."
That ability is getting a boost from cable operators' aggressive forays into WiFi, as well as from industry initiatives such as Hotspot 2.0. Those activities are inching WiFi closer to cellular-style and cellular-scale roaming.
But in the process, they're making WiFi more of a threat than it was back in 2002. Case in point: Scratch Wireless is an example of a new breed of mobile operators that use cellular as a fallback to WiFi, a reverse of the far more common model. These operators wouldn't exist if WiFi weren't prevalent enough to stand in for cellular in the eyes of many consumers. These operators will benefit as WiFi roaming becomes easier, more robust and more widespread thanks to MSO buildouts and Hotspot 2.0. "The cable WiFi initiative is a great benefit to us," says Jon Finegold, Scratch Wireless vice president of marketing. "Anything that makes WiFi more cellular-like is good tailwind for us."
Scratch bears watching by cable operators, consumer electronics vendors, social networking companies, and other businesses that are interested in whether a WiFi-centric or WiFi-only service resonates with enough consumers, or whether a cellular-first strategy makes more sense. One thing is clear: WiFi will be shaking up telecom for years to come.
— Tim Kridel, Contributing Analyst, Heavy Reading 4G/LTE Insider
This report,"Carrier Wi-Fi Roaming: Old Dog, New Tricks," is available as part of an annual subscription (6 issues per year) to Heavy Reading 4G/LTE Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/4glte.