Feature Article

December 04, 2012

Can Carriers Change Public Wi-Fi Revenue Model?

Up to this point, Wi-Fi has been important for high-speed access providers mostly in an indirect way. Generally speaking, public hotspots have been an amenity offered to paying customers (either fixed or mobile broadband). The business value then is “stickiness,” as the perceived value of a particular offer is higher.

But that might change, with public Wi-Fi possibly becoming a “for fee” service, according to Monica Paolini, owner of Senza Fili Consulting. The extent of end user demand for such changes is unclear. Much would depend on new additional value.

But a number of developments might propel the change. Increased use of VoIP applications over Wi-Fi means low latency and jitter performance is more important, and “best effort” public hotspots might not work well enough to suit all users. A quality-assured approach would help. That might create a new level of value that service providers might be able to charge for.

Business customers might be logical customers, which has generally been the case for other third-party public Wi-Fi networks. Among other advantages, shifting traffic to Wi-Fi hotspots would help enterprise information technology managers avoid expensive data overage charges.

Business Wi-Fi provider iPass, for example, projects it will offer a vastly-bigger network by 2015.

The issue is whether carriers can create enough new value to convince people to pay extra for what they have come to see as an amenity. The key will be to create new features, possibly to support quality of service for VoIP, or to allow users to switch automatically to Wi-Fi, from the mobile network.

That might appeal to price-sensitive users, for example.

Edited by Brooke Neuman

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