The Connected Life deals with interesting business issues and opportunities facing the Communication and High Tech industries today and in the future. My postings share well informed, researched and structured analysis from my extensive experience in working on these issues with leading digital companies around the world.
Tuesday, July 2, 2013
Creating a Wi-Fi Monetization Virtuous Circle
In the decade or so that Wi-Fi has existed, most
technologists and mobile industry executives viewed it as the “poor cousin” to
licensed mobile communications.Now
mobile operators around the world are asking how they can effectively use Wi-Fi
to help them cope with the huge surge in mobile data traffic and to meet
customer needs and expectations.In
addition, they are all eager to understand how they can make money from Wi-Fi
and to make the business case to justify investments in deploying Wi-Fi
Based on extensive research and consultative engagements
with leading global service providers Cisco has identified a number of new and
innovative business models which we characterize as The Wi-Fi Monetization Pyramid – 3 layers of monetization
opportunities which support the subsequent layers below (described in detail in
our recent white paper W-Fi: New Business Models Create Real
Value for Service Providers).
Approaching the fundamental question of Wi-Fi
monetization as a pyramid, or series of layers of business opportunities, creates
not only significant new business value for a service provider, but also a
virtuous circle that leads to ever-increasing sources of new Wi-Fi value. As
the Wi-Fi Monetization Virtuous Circle outlined below shows, the reinforcing
network and scale effects of Wi-Fi investments not only deliver unique business
benefits at each of the levels, but also establish a valuable platform to
exploit additional monetization opportunities at the next level.
Deploying an initial public, home, and business Wi-Fi
network provides a compelling ROI through Baseline business models.
However, after this initial network is established there are now New Revenue
opportunities that can be built on this platform. And, expanding the
network through managed services and roaming agreements at key venues allows
service providers to offer additional Value-Added Services to extract
new sources of value from the Wi-Fi network. Now we have come full circle:
Expansion of the network to new venues and the addition of new services make
the network even more valuable to end users, making the ROI for the baseline
models even higher.
Service providers who are successfully delivering
business value from Wi-Fi do not view individual monetization opportunities in
isolation.Rather, they view investments
in Wi-Fi as a platform upon which they can deliver a pyramid of new business
models, creating a Monetization Virtual
Circle of increasing business value.