Widespread Public Wi-Fi Increases Competition in Mobile Market

Widespread public Wi-Fi access both helps and harms mobile service providers.

In the positive sense, U.S. cable operators and telcos (both fixed network and mobile) have used public Wi-Fi access as a key feature of their consumer at-home highspeed access offerings.

In that sense, public Wi-Fi indirectly aids revenue generation by helping to attract new customers and preventing existing consumers from defecting.

On the other hand, one might also argue that widespread availability of public hotspots, and the consequent ability to offload mobile data demand, has allowed some attacking mobile service providers, including Illiad’s Free Mobile in France, and Republic Wireless and others in the United States, to offer low-cost “mobile” access packages, since much of the actual end user demand can be satisfied using “no incremental cost” public Wi-Fi access.

So some participants in the Internet ecosystem have more to gain than others, in the area of low-power, unlicensed access such as provided by Wi-Fi.

U.S. cable operators are embarked on a long-term plan to create huge public Wi-Fi networks that, while not providing full mobility, satisfy much untethered device demand for Internet applications.

It is not yet clear whether the bulk of future value will come from retail sales to consumers (widespread access to public Wi-Fi as a feature of at-home high speed access) or wholesale sales of access to third parties (app or service providers).

Likewise, it is not clear whether the value will be driven indirectly (public Wi-Fi as an amenity for at-home high speed access providers, as a venue for increased ad sales or on-demand content) or directly (wholesale service provided to third parties, or sale of on-the-go video entertainment services).

But, as a rule, the biggest potential winners are cable operators and competing mobile service providers. The former win by creating a new role in the untethered, on the go services market.

The latter might win by getting access to widespread data offload networks that allow low-cost retail “mobile offers” that are dramatically less costly than traditional mobile service provider offers.

If and when additional unlicensed, low-power spectrum becomes available (5 GHZ, for example), those opportunities should increase.