The Wi-Fi World Comes to San Francisco

I recently had the honor to speak at the Wi-Fi Global Congress in San Francisco. One thing is certain: Wi-Fi’s importance and industry relevance continues. While not quite the same order of magnitude as the Mobile World Congress, the event attracted 350 people, a tenfold increase over the last time the Wi-Fi Broadband Alliance visited San Francisco. The WBA now has 95 corporate members, reflecting a member base that has doubled over the last 12 months. The membership includes a mix of leading Wi-Fi, mobile, and broadband network operators; global service providers and media players; as well as technology providers and partners. 

I took away five key messages from the conference:

1.    Roaming and Integration Are the Next Big Thing: Everyone is excited by the Next Generation Hotspot (NGH) initiative that allows users to seamlessly roam across Wi-Fi networks locally or around the world. The rollout of NGH will also allow mobile devices to simply roam from the cellular network onto Wi-Fi hotspots using a secure connection.  Recent customer research from Cisco IBSG confirms the pent-up user demand for this capability. Eighty-five percent of people stated that seamless transfer between networks was important to them, and there was an average level of interest of 3.3 out of 5 for Wi-Fi roaming.

2.    Mobile vs. Wi-Fi Is Dead: The question is no longer which is better—mobile or Wi-Fi. The future is now seen as a true marriage between the two access networks. In fact, Korea Telecom talked about how they are creating an “ABC” solution—“always best connection.”  KT, along with other operators, is developing solutions that select the best network for the location, device, and application, and make seamless handoffs between LTE and Wi-Fi. KT remarkably showed how it is currently seamlessly transferring video streaming and file-transfer sessions with customers between its two networks in South Korea.

3.    Small Cells: Smaller licensed cellular and Wi-Fi cells are now seen as fundamental to the next generation of mobile networks to significantly increase mobile capacity to meet explosive customer demand. Unlike macro cells, small cells can also be cost-effectively deployed in homes, businesses, and key public locations to improve coverage, ensuring that mobile devices can always be connected to the Internet. In fact, the 6 million licensed small cells in existence already exceed the total number of macro cells deployed globally.

4.    Monetization—Beyond Offload: As Cisco IBSG identified in “Profiting from the Rise of Wi-Fi,” operators are learning that, while mobile data offload is important, there are lots of other ways to monetize investments in Wi-Fi. MGM explained how it is deploying Wi-Fi throughout all of its extensive Las Vegas properties not only to improve the customer experience, but to drive new value to the bottom line. Location-based services and targeted messaging and coupons to guests’ mobile devices delivers a higher ROI to MGM than it can get from Internet advertising. Similarly, Shaw Communications in Canada described how the extensive public Wi-Fi network it is building helps them differentiate their core TV and broadband services and increase their pricing power. 

 

5.    The Wi-Fi Land Grab: Operators are quickly recognizing that one of the keys to success in building an effective Wi-Fi network is, as in retailing, “location, location, location.” A land grab is going on as companies seek to acquire sites in key areas where people spend their time. Shaw Communications described creative techniques it is using to gain access to these key locations. Shaw’s bag of tricks includes everything from listings on Wi-Fi finders to drive traffic to the retailer; advertising; location-based services; and integrating with its enterprise IT to convince retailers and owners to site Shaw’s access points at their location.

What Do Mobile Business Users Want from Wi-Fi?

Once the exclusive domain of senior executives, mobile devices are now indispensable to most employees for conducting both their business and personal lives. The insatiable demand for smartphones, tablets, and other connected devices is generating staggering amounts of mobile data. In parallel, the use of Wi-Fi for Internet access is exploding as more mobile devices are Wi-Fi enabled, the number of public hotspots expands, and user acceptance grows. Once shunned by corporate IT departments, Wi-Fi has increasingly made its way into most businesses.

 

Business users are the most valuable customer segment for mobile operators. Changes in mobile behavior and usage, particularly with regard to Wi-Fi, could have a significant impact on service providers’ (SPs) bottom line. However, there is little research on how mobile business users are actually using Wi-Fi, how they want to employ it in the future, and, more specifically, what is driving them to connect their devices to the Internet using Wi-Fi.

To learn more, the Cisco® Internet Business Solutions Group (IBSG) conducted a survey of 540 U.S. mobile business users to understand their needs and behaviors, current and future mobile usage, and level of interest in Wi-Fi, as well as new forms of monetization.  The study revealed some interesting findings, including home being the most popular location where business users use mobile devices, far surpassing the office or other place of work as a preferred location. Business users own an average of three mobile devices each, one-third more than consumers. And, close to 30 percent of them own a table. Business users prefer Wi-Fi to mobile to connect all of their mobile devices. In fact, more than one-half of business users take advantage of  a public hotspot  weekly to access the Internet.

The research findings are important because they help SPs understand the size of the opportunity, develop strategies for success, and differentiate their Wi-Fi business offerings and initiatives to become more competitive.

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Highlights from the Wireless Broadband Conference

I spoke at the Wi-Fi Global Congress this week in San Francisco.  Attached is a short video of my top take-aways from the conference. 

http://www.youtube.com/watch?v=80J6C7YMfFo

The World’s Wi-Fi Laboratory

I recently returned from visiting the world’s Wi-Fi laboratory – the United Kingdom. Everywhere you look in the United Kingdom, there is a sign promoting the availability of Wi-Fi, and my mobile device was constantly identifying a long list of available hotspots. The world’s oldest subway system – affectionately known as The Tube – even allows you to connect to the Internet as you await your train hundreds of feet below historical London. Visitors from around the world at the Summer Olympics were greeted with high-speed Wi-Fi access throughout the Olympic venues, allowing them to enhance their experience with instant access to additional information, videos, and communications through their mobile devices.  

 

Our recent Cisco IBSG research, “What Britons Want from Wi-Fi and Mobile,” reveals that Britain is definitely leading the way in the availability and use of Wi-Fi. Our study confirms that Britons seem to be content with coverage in first-tier locations such as coffee shops, hotels, and restaurants, but are now looking for Wi-Fi to be just as pervasive in other places where they spend their lives. Hospitals, bus stops, retail stores, pubs, and the High Street (or city centers) top the list of additional locations where Britons would like to access Wi-Fi.

The study revealed that mobile devices are now Wi-Fi-enabled “nomadic” devices. Britons own an average of 2.6 mobile devices, almost all of which are Wi-Fi-enabled. Britons spend an average of 2.6 hours per day using their mobile devices in their homes, compared with only 0.6 hours per day in a typical “mobile” on-the-go world.

The Cisco IBSG study also revealed that mobile users are connecting their devices predominantly via Wi-Fi, including over 80 percent of smartphone owners. In fact, on average, smartphone owners use Wi-Fi slightly more than one-third of the time to connect their devices to the Internet. Remarkably, Britons told us that they prefer Wi-Fi to mobile for connecting their mobile devices. They find Wi-Fi superior or equal to mobile connectivity across all attributes, including security and ease of use. Forty-six percent of Britons even find Wi-Fi coverage superior to mobile and an additional 18 percent consider that they provide equal coverage. And, this could change even more in Wi-Fi’s favor, as one-third of British mobile users now use a public hotspot at least weekly. In addition, up to 95 percent of the time, they access that public Wi-Fi for without paying – either for free or as part of their home broadband or mobile subscription.

There is definitely a Wi-Fi “land grab” under way in the United Kingdom today as every major service provider fights to light up the next tier of prime locations with Wi-Fi access points. BT claims more than 4 million hotspots in the United Kingdom, including community access through the FON network for fellow BT home broadband subscribers. In fact, every major home broadband provider in the United Kingdom now offers free access to an extensive public hotspot network as a way to retain customers. The Cisco IBSG research shows that this strategy works.  Over two-thirds of respondents said that free public Wi-Fi was important to them in choosing a broadband provider. 

Equally, most of the major U.K. mobile operators offload some of their data traffic to one of these nearly pervasive Wi-Fi networks to cope with explosive mobile data traffic and to provide an LTE experience, in a market that, until very recently, has not had LTE. Mobile operator O2 has shaken up the market by creating an extensive network of prime public hotspots and making them available for free to customers and non-customers alike.

Given this Wi-Fi laboratory, operators and enterprises are actively experimenting with creating a new world of mobility. SPs are exploring new Wi-Fi monetization models such as wholesale, new features, and value-added managed services. Big U.K. retailers such as food shopping giant Tesco and the John Lewis department store chain are lighting up their stores with hotspots to create a new high-value, mobile-enabled shopping experience for their customers. Even the High Street banks are getting in on the act as they look to add Wi-Fi to their thousands of branches throughout the United Kingdom. Of all the places in the world, Britain may be the first to deliver what we term “New Mobile” – an environment in which Wi-Fi and mobile are seamlessly integrated and indistinguishable in the mobile user’s mind.

So what does the future hold for British mobility? Here are five predictions for key changes in the British mobile industry over the next two years as an outcome of the Cisco IBSG research:

1. Mobile will become one of the primary ways people access entertainment.

Within the next two years:

·         70 percent of mobile users will access social networks.

·         More than 50 percent of mobile users will watch streamed and recorded videos.

·         Up to 50 percent of mobile users will read eBooks.

2. Home will continue to dominate other locations for mobile device usage.

In the next two years, more than 50 percent of all mobile device usage will occur in the home.

3. Devices will also get “out of the house,” with increased usage in public spaces.

In the next two years, 15 percent of all mobile device usage will occur in retail and public

locations.

4. Wi-Fi will become the predominant access technology for smartphones.

Within the next two years:

·         More than 90 percent of smartphones will regularly use Wi-Fi.

·         Smartphone owners will use Wi-Fi almost 50 percent of the time to connect to the Internet.

5. While smartphone penetration will continue to increase, much of the growth of mobile devices will come from nomadic devices.

In the next two years:

·         25 percent of consumers will have eReaders.

·         30 percent will have tablets.

Cisco IBSG conducted an online survey of 1,095 British mobile users. The study was also undertaken in Brazil, Mexico, the United Kingdom, and the United States. Full results of the survey can be downloaded here. 

Q&A: What Canadians Want from Wi-Fi and Mobile

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The New Mobile World Order

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What We Can Learn from Korea

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The New Mobile World Order

A mobile paradox—huge growth and customer demand, yet significant business and market challenges—is causing many companies in the mobile value chain to question where the industry is heading. They’re struggling to understand the key drivers that will shape the industry and what this new world will mean for them in terms of new challenges and opportunities. Most of all, they want to know the winning strategies for achieving success in this New Mobile World Order.

This paper provides a perspective on the key disruptors and tipping points that will redefine mobility while producing two plausible scenarios for the future of the mobile industry. These scenarios and industry segment assessment provide a framework for mobile industry executives to evaluate their future and rationally assess strategic options under different conditions.

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Mobile users prefer Wi-Fi over cellular for lower cost, speed, reliability

Recent feature article in ComputerWorld where I am quoted extensively on our Wi-Fi customer research.

Mobile users prefer Wi-Fi over cellular for lower cost, speed, reliability
Survey of 1,079 U.S. mobile users predicts even more Wi-Fi use

By Matt Hamblen

August 20, 2012 03:41 PM ET

5 Predictions for the Future of Wi-Fi and Mobile

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South Africa Is Joining the Wi-Fi Revolution

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Wi-Fi Goes Public

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A New Type of Mobility

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What Is A Mobile Device Anymore?

Blog posting on cisco.com

What Do Consumers Want from Wi-Fi?

Until recently, most technologists and mobile industry executives viewed Wi-Fi as the “poor cousin” to licensed mobile communications. And they certainly never viewed any role for Wi-Fi in mobile networks or their business. The explosion of mobile data traffic has changed all of that. Most mobile operators now realize that offloading data traffic to Wi-Fi can, and must, play a significant role in helping them avoid clogged networks and unhappy customers. In addition, service providers (SPs) are struggling to understand new business models for making money from Wi-Fi.

In all of this strategizing about Wi-Fi, there is precious little research about how end users are actually using Wi-Fi, how they want to employ it in the future, and, more specifically, about what drives a user to connect his or her device to the Internet with Wi-Fi rather than “mobile.”

To learn more, the Cisco^® Internet Business Solutions Group (IBSG) conducted a survey of 1,079 U.S. mobile users to understand their needs and behaviors, current and future mobile usage, and level of interest in Wi-Fi and new forms of monetization. The study revealed some interesting findings, including people’s preference to connect their mobile devices using Wi-Fi, the predominance of mobile device usage in the home, and the fact that one-third of mobile users use a public hotspot at least weekly to connect their mobile devices to the Internet. The research findings are important because they allow SPs to understand the size of the opportunity, develop strategies for success, and differentiate their Wi-Fi offerings and initiatives to become more competitive.


Download the paper

Rethinking Flat Rate Pricing for Broadband Services

The telecommunications industry is facing a fundamental issue: on the one hand, increasing requirements for new investments in broadband Internet access and transport infrastructures that support continuous growth in broadband traffic; and on the other hand, reduced ability to exercise pricing power with customers and, thus, increase revenues.

Meanwhile, traditional voice and messaging revenues have strongly declined due to commoditization, and this trend is expected to continue. Therefore, operators are now relegated to connectivity products. The value that operators once derived from providing value-added services is migrating to players that deliver services, applications, and content over their network pipes.

If this is not enough, Internet access prices are dropping, sales volumes are declining, and markets are shrinking. The culprit: flat rate “all-you-can-eat” pricing. Such a model lacks stability—sending service provider pricing into a downward spiral—because it ignores growth potential and shifts the competition’s focus from quality and service differentiation to price.

Now is the time for the telecom industry to consider innovative pricing models for broadband services to enable a better match between the price customers pay and the value they derive from services. Successful pricing strategies will be essential to directly managing profitability for both fixed and mobile broadband operators.


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