The Connected Life

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.

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.

Download the paper

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