Based on research and engagements with leading operators
throughout the globe, the Cisco® Internet Business Solutions Group has
identified six important trends that we believe are redefining this new world
of Wi-Fi:
1. Predominance
of Wi-Fi for Wireless Access
Almost all mobile
devices, including smartphones, now have Wi-Fi as their core access
technology. And people are using these
mobile devices to access increasingly data-intensive applications. Recent
research by Cisco IBSG found that roughly half of mobile users are now watching
video on these mobile devices. Today, mobile is less about walking or driving
and more about the convenience of a “nomadic” lifestyle—moving,
sitting/stopping and connecting, then moving on again. Such nomadic locations
are ideal for high-speed Wi-Fi, which easily handles those data-hungry
applications.
2. Proven
Ways to Use Wi-Fi to Improve the SP Business
The explosive demand for mobile
traffic has left mobile operators scrambling for ways to meet this demand, while
overcoming spectrum constraints and managing CapEx expenditures. Offloading
some mobile-data traffic to Wi-Fi promises savings to carriers of $2 to $5 per
GB in deferred CapEx and lower operating expenses. Providers that bundle access
to a public Wi-Fi network with their home broadband service are finding
significant improvements in customer retention and acquisition. Privately, SPs report
churn improvements of 10 to 15 percent through the strategic use of Wi-Fi,
delivering a substantial impact to the bottom line.
3. Growing
Use and Importance of Public Wi-Fi
IBSG’s mobile research found that
one-third of mobile users access public Wi-Fi at least weekly. Many expect to find Wi-Fi in key locations
such as airports, stadiums, town squares, coffee shops, and retail sites. Overwhelmingly,
they expect this public Wi-Fi to be free or, at least bundled as part of their
broadband or mobile service.
4. “Land
Grab” of Key Locations to Deliver Public Wi-Fi
As with retail, public Wi-Fi is
all about “location, location, location.” A public Wi-Fi provider needs to
provide access in key Tier 1 locations such as airports, cafes, and hotels. Increasingly,
people also expect Wi-Fi in the other locations where they spend their time. Tier
2 locations, such as hospitals, schools, sporting venues, and public
transportation hubs, are increasingly near the top of network deployment lists
of Wi-Fi network providers.
5. Consolidation
of Public Wi-Fi Providers to Deliver SP Wi-Fi
As recently as five years ago, most
public Wi-Fi was managed independently, by the venue owner or by a start-up
Wi-Fi provider such as Wayport or The Cloud. As SPs begin to see the strategic
importance of Wi-Fi, they are acquiring these independently managed Wi-Fi
providers and becoming the predominant providers in many markets. At the same
time, the venue owners realize that they need to provide much better Wi-Fi
service, meet more complex technical and business requirements, and conform to increased
regulatory demands. Many are looking to service providers to remove much of
this complexity and manage the services for them.
6. Providers
Seeking Ways to Make Money From Wi-Fi
SPs recognize that mobile-data offload
and broadband-churn improvement provide very compelling business cases for
Wi-Fi investments. Beyond that, they are looking for ways that those
investments can deliver new sources of revenue. Research by Cisco IBSG revealed
a number of new business models that operators can exploit to profit from
the rise of Wi-Fi. Premium access, managed services, business solutions,
roaming, and wholesaling are some of the key models that providers are
currently experimenting with to deliver new revenue from Wi-Fi. Of particular
interest and potential is providing value-added services to enhance core Wi-Fi
connectivity. Many retail and venue owners, for example, are looking to combine
Wi-Fi capabilities with customer location to provide data analytics, enhanced
customer experience, and hyper-targeted and relevant advertising.
As we have seen, Wi-Fi’s days as a “poor cousin” are over.
Service providers that ignore the compelling cases for Wi-Fi will risk drop-offs
in efficiency, profits, and customer satisfaction.
Those who treat Wi-Fi as a preferred partner will thrive.