Feature Article

April 24, 2012

Wi-Fi Business Case isn't What it Used to Be

Reported and actual Wi-Fi business cases have changed over the last fifteen years. It might be hard to imagine now, but there was serious talk about Wi-Fi competing with mobile broadband networks. With some exceptions, Wi-Fi then became an amenity for buyers of telco and cable fixed broadband service.

As mobile data consumption has grown, the emphasis has shifted largely to data offload. One recent example is France’s “Free Mobile,” which has launched a network of four million hotspots its smartphone customers can use, creating what is billed as the world’s largest carrier-run mobile data offload network.

The Wi-Fi network was originally built as an amenity for Illiad’s fixed network customers (Illiad owns Free).

So we now come full circle. Wi-Fi hotspots were once deemed competition for mobile networks. Now, Wi-Fi hotspot networks are part of the mobile broadband network, and the primary business case is offloading demand from the mobile networks.

And naturally so; the proportion of in-building mobile data consumption is markedly higher than that of consumption in outdoor public places, or while users are in motion. And the trend is even more pronounced for tablets, which tend to be used heavily in homes and offices, rather than “in motion.”

A study of 150 smartphone users over a three-week period finds that panel members consume an average of 723 MBytes of data a month, an average of 24.1 MBytes of data a day. Of that, 21.5 MBytes is received, while only 2.6 MBytes is sent. Those figures include both wireless network and Wi-Fi consumption, according to the Yankee Group.

Looking only at data sent over cellular networks, the average data transfer is 12.1 MBytes a day, with Wi-Fi representing the remaining 12 MBytes of daily usage.

The study suggests fully half of smartphone use occurs over indoor and Wi-Fi networks. So the new business case for mobile service providers is data offload and “avoided costs” in the form of additional cell sites and spectrum.

Edited by Braden Becker

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