A closer look at Wi-Fi’s evolving technology and services
Once viewed as a threat to mobile operators’ valuable 3G and 4G services, Wi-Fi (family of technologies under the IEEE 802.11 protocol) is now seen as a cost-effective way of helping operators meet their customers’ insatiable demand for bandwidth. Historically, mobile operators have followed a “mobile first, Wi-Fi next” strategy in designing their networks, but times have changed.
What began as a simple way to wirelessly network isolated clusters of home or business infrastructure within a limited area is today an essential component of wireless communications. However, the biggest challenge that both mobile and fixed-network operators face in deploying a monetized carrier Wi-Fi service is ensuring an acceptable user experience. So much so, if an operator can’t guarantee the required service levels, it cannot monetize them. Additionally, Wi-Fi technologies are offloading large portions of consumer wireless data consumption but there is currently no effective way to monetize this Wi-Fi usage.
With the emergence of “carrier-grade” hot spot technology, Wi-Fi is becoming as robust as carrier cellular technology. Other than seeing demand on their own networks, mobile operators today have little insight into the traffic that has been offloaded from their networks because they have no visibility into behaviors or performance issues. As they compete for more control over the user experience, carriers need to develop a better understanding of Wi-Fi data traffic by gaining more intelligence into the performance of these networks. The line between mobile operators and cable providers blurs even further as interoperability between these technologies achieves more traction, causing the entire mobile ecosystem to face a strategy rethink.
Wi-Fi offers an attractive business case to carriers as it supports unlicensed spectrum in the wake of increasing spectrum crunch and spectrum demand. Additionally, Wi-Fi equipment sourcing and installation is less expensive than 3G/4G equipment, thus lowering operational costs.
While global Wi-Fi business models favor paid service, U.S. public Wi-Fi relies on lower-cost and free models. Many U.S. mobile subscribers prefer free Wi-Fi as a complement to 4G/LTE, rather than as a substitute, given it is often a lower-cost or free alternative. Further, consumers prefer speedier response times with high reliability at their preferred locations. While privacy and security still remain a top concern, users are willing to cede control over more information on the Wi-Fi network.
Operators are continuing to focus on deploying carrier-neutral and vendor-agnostic Wi-Fi offload solutions. Further, 802.11u, “white space” spectrum recently vacated by television broadcasters, new-generation hot spots, and the Federal Communications Commission’s view on “Internet for all” could transform the Wi-Fi landscape in the U.S. Meanwhile, many operators continue to view Wi-Fi as a means to expand service coverage with very low capital and operational expenditures. In this context, it is imperative to ensure optimal performance to deliver seamless mobility and enhanced quality of user experience to subscribers.
Pierre-Alain Sur is PwC’s global communications industry leader and a partner in the assurance and business advisory services practice with a primary focus on technology, information and communications companies. In addition, he currently serves as the U.S. cross-line of service leader for technology, communications, entertainment and media industries. Sur is the subject matter expert for the firm on the wireless industry and often participates in the design and development of training programs dedicated to improving the knowledge base of PwC’s telecommunications professionals. From 2006-2012, Sur led the internal team that designed and wrote PwC’s Wireless Industry Survey, which has become the industry reference tool on accounting trends and practices among wireless carriers.
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