Will Wi-Fi Be the Death of Mobile?

In 97 countries around the world there are now more mobile devices than people. No wonder mobile networks are clogged with massive amounts of new traffic!  Mobile operators are struggling with how they can provide customers with the mobile broadband experience they expect, in a cost effective, scalable and profitable manner.  Cisco’s Internet Business Solutions Group (IBSG) believes that Wi-Fi, the “silent sleeper” of wireless access networks, may hold the answer.

The mobile industry is on the brink of a fundamental change. Just think of some recent key developments: There has been massive growth in Wi-Fi-enabled smartphones, tablets, cameras, and game consoles—and nearly half of network traffic growth is Wi-Fi. The number of Wi-Fi access points is also growing, with more and more free public access. At the same time, economic modeling by Cisco IBSG shows that mobile operators can reduce costs and improve customer experience by offloading mobile data to Wi-Fi networks. It’s not surprising that Wi-Fi is becoming an integral part of wireless network design. Wi-Fi has truly come of age and now realistically represents a viable wireless access network.

But will Wi-Fi be a complement, or competitor, to mobile wireless networks? Consider the following:

1.   Wi-Fi covers most of the places where we are: 80 percent of the time, people connect to the mobile Internet from their home, office or other indoor location—all areas that are addressed by Wi-Fi.

2.     Much of what we do is nomadic, not mobile: Two-thirds of the activities people do on smartphones are nomadic activities such as email, web browsing, gaming, using productivity tools and making video calls.  Wi-Fi is ideal for these activities. 

3.   New nomadic devices will consume even greater amounts of mobile data: While a smartphone typically consumes 24 times the data of a standard mobile phone, a tablet consumes 122 times more and a laptop 515 times more than a mobile phone.

4.   Consumers will happily use Wi-Fi as an alternative to mobile: Our research shows that U.S. smartphone users already use Wi-Fi a third of the time to access the Web.

5.   Wi-Fi can offer a more cost effective solution, and a better user experience: Wi-Fi delivers higher speed, good coverage and a better experience—all at a lower cost than mobile.  Complex price structures and device-specific data plans could actually encourage users to migrate to Wi-Fi. 

6.  There are several ways to make money from Wi-Fi: In addition to the traditional business of retail hotspots, there are now several other viable access models where operators can make money by charging mobile carriers or other Wi-Fi providers. 

Several types of service provider can create winning strategies to succeed in Wi-Fi. Mobile operators can use Wi-Fi to offload growing data traffic. Existing Wi-Fi network providers can (1) sell wholesale access to mobile operators for data offload, and (2) sell access and value-added services to retail hotspot owners.  Integrated providers, who typically already have both mobile and some Wi-Fi capabilities, can use Wi-Fi to offload data traffic from their mobile networks and differentiate their fixed broadband offers.

Wireless networks will evolve over time, but one thing is certain: Wi-Fi is a critical element in mobile networks. Wi-Fi is not the death of mobile, but it is the beginning of a new chapter for this revolutionary industry. 

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