The term ‘carrier grade Wi-Fi’ is being thrown about the telecommunications industry quite a bit at the moment. Primarily, it is being touted as the answer to the potential spectrum deficit, as mobile service providers (MSPs) aim to move traffic away from their cellular networks to small cell infrastructure.
However, to justify the capex of carrier Wi-Fi, many MSPs will be looking for ways to generate revenue from their small cell infrastructure.
“Offload of data traffic is not enough; Wi-Fi’s got to pay for itself,” says Richard Webb, directing analyst for microwave and carrier Wi-Fi at Infonetics.com.
The quest for monetization of Wi-Fi networks is opening up entirely new business models, services and opportunities.
A recent study conducted by Analysys Mason, on behalf of Amdocs, found that the leading driver for Wi-Fi adoption was in fact not data offload, but differentiation of services.
“Our research shows that while the service provider Wi-Fi market is still in its early stages, service providers are adopting a forward-looking attitude that goes beyond using regular Wi-Fi to offload congested 3G and 4G networks,” said Chris Nicoll, principal analyst at Analysys Mason.
“While offload is still a priority, it’s clear that service providers are looking to
Strategic services platform
By utilising Wi-Fi and advanced analytics, MSPs and their partners can begin to take advantage of a wide range of geo-specific marketing tools; delivering advertising, interacting with customers, gaining insight and building brands.
The model is straightforward; the venue owner pays the carrier for Wi-Fi service. The owner can then offer this to their customers free of charge. In return, the owner gets analytic insight into their customer base, courtesy of the Wi-Fi provider. From foot traffic to demographical data, this customer insight can prove invaluable for venues.
O2 Wi-Fi managing director, Gavin Franks describes this new platform as the B2B2C model, with both the carrier and the retailer working together to deliver better service and maximise revenue.
Premium services
As well as the zero-rated model, there is also the clear potential to offer premium services. A report published in July 2012 indicated that 66 per cent of business travellers would be willing to pay for faster Wi-Fi, even if the option for free Wi-Fi was available.
A recent whitepaper published on cisco.com also floated the possibility of other premium services that could monetize carrier grade Wi-Fi, including delivering secured access to cloud storage and resources over Wi-Fi, international Wi-Fi roaming packages and enhanced in-store shopping experiences.
Two way street
There is currently a land grab taking place for premium locations, with MSPs clambering to maximise their reach and revenue opportunities. However, existing WLAN service providers already have significant infrastructure in place and it is likely that a percentage of MSPs will turn to these providers to fill gaps in infrastructure.
There are certain obstacles that MSPs and WLAN providers will have to overcome in order to forge a working relationship. For example, if an MSP is going to entrust their customer’s data needs to a third party, they will want to have a guarantee that a minimum standard of service is met. This will essentially come down to the physical capabilities of the access point itself; however, as ‘carrier grade’ becomes standardised, it is likely that issues such as this will be left at the wayside, allowing MSPs, hardware vendors, existing WLAN service providers and site proprietors to create mutually beneficial agreements.
Within this new model, everyone stands to gain. MSPs will not only be able to drive down expenditures thanks to low-cost, high-capacity data offloading, but they will be able to explore new revenue streams where none existed before.
Hardware vendors will see increased revenue as the demand for carrier grade wireless solutions continues to explode.
As next generation hotspots become standard, the vendors of policy management solutions and billing software services will also benefit as seamless discovery, security and authentication become more prevalent.
Proprietors of venues will be able to monetize their existing infrastructure or alternatively, will be able to provide consumers with free wireless connectivity and gain access to both customer insight, as well as a highly effective advertising platform.
Mobile users – who are perhaps the most important piece of the puzzle – will experience unparalleled connectivity, regardless of location. Their experiences, both online and off, will be enhanced by hyper-local data.
The whole is greater than the sum of its parts
The technologies underlining the upcoming Wi-Fi revolution are little more than pieces to a puzzle. The potential to build effective business models once the pieces have been assembled will be down to the stakeholders involved. As is so often the case with the digital frontier, the ones who are the most innovative are the ones who are the most likely to prosper.
