Key to an effective consumer WiFi strategy
Nathan Burley
28/06/2007

As Asia continues to make metro-WiFi commitments, led by Singapore, Hong Kong and Australia, questions must be asked. Questions about metro-WiFi's global success to date, business models and even whether the consumer wireless broadband market exists at all beyond niche segments must be asked. Unfortunately this article can not address all these areas, however we do have room to make some initial observations about the keys to an effective consumer WiFi strategy.

Firstly, as with voice, consumers demand coverage. Network access must be available when needed or else charging must be minimal. Although recent WiFi enhancements and mesh networks can overcome some short falls, WiFi is generally not suited to providing the wide-area wireless broadband coverage users demand. This may limit the business model for general public paid-for access, outside the enterprise. Coverage limitations in Ovum's view necessitate operators provide some level of free or very low cost access (like in Singapore's Wireless@SG), to capture the interest of average consumers. The business case may also be able to be supported with advertising, community network models or other innovate services.

The low cost of WiFi chipsets and embedded connectivity into various devices means, Machine-to-Machine services or partnerships for utility-based applications such as remote reading of electricity or water meters are other possibilities.

Integrated mobile and fixed operators deploying WiFi also have various other alternatives available. WiFi can be combined and leveraged across other technologies, different users and products while using innovative business models and bundling. Broadband or mobile offers can include WiFi access as a differentiating free or low cost value-added service add-on.

WiFi also creates differentiation and potentially new service possibilities in converged services and the home. Converged offerings could be based around voice or data. Voice over WiFi using UMA (Unlicensed Mobile Access) is the predominant voice approach. This strategy potentially enables zone-based (home, office, campus or hotspot) or other innovative tariff options. A similar HSPA/WiFi strategy will leverage each technology's strengths and overcome the inherent coverage weakness in WiFi.

For mobile operators, WiFi can be used to increase network capacity, extend and improve mobile coverage and performance. Moving traffic (voice, but especially data) off mobile networks onto WiFi is advantageous for a number of reasons. WiFi can also allow faster speeds, be used in-doors, the home and in areas where stationary mobile data use is likely such as cafes and airports. Achieving seamless hand-over and an invisible experience from the user perspective between technologies is of principle importance here.

Mobile operators can also use WiFi to help users understand and adopt wireless data solutions. WiFi broadband access can be a low cost, entry level service which can begin to change usage patterns for wireless data and lead to adoption of other wireless data solutions. Even in SingTel's case, where free 512k WiFi is being provided, we believe more opportunity can be created than cannibalisation of existing or potential mobile revenue.

WiFi is a key technology in the wireless future however there is no one clear business model. WiFi will be used for numerous applications and in Ovum's view the business model will come from multiple uses, with more than just paid for access required, especially in the consumer market.

- Nathan Burley is a Research Analyst at Ovum.

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