Reprise: Is WiFi Becoming the Unregulated Stealth Carrier of the Future?

skypewifitruphonelogos-thumb[1] Over the past several months I have written three posts about WiFi’s ever-increasing role as a complement to the wireless carriers:

Basically, in my recent travels I have found that WiFi access is becoming more readily available at home, in the office and, as I travel, in hotels, airports and restaurants. Especially when in countries where roaming charges can be excessive, I seek out WiFi access points when on my BlackBerry and iPhone to minimize roaming expense for data.

Now that Apple is allowing VoIP over 3G, this strategy will become even more critical when using the Skype and Truphone applications for the  iPhone where the conversation uses VoIP technology over the data channel. While my home network data plan has sufficient monthly capacity for making these calls from within Canada, I’m not sure I want to be paying $1/MB when roaming in, say, the U.S. for a Skype call.

Brough Turner has built up an immense wealth of knowledge about Internet infrastructure and wireless carriers, not only from the technology perspective but also the business implications, including costs. He has recently published a post, WiFi Offload, not Femtocells, where, while postulating that Femtocell technology is too complex and costly become mainstream, he supports his argument by pointing out the business reasons for relying on WiFi as a primary “carrier” for wireless:

  • “most mobile data is destined for the open Internet, not for someplace on the mobile operator’s network” Apparently 96% to 99%. Yet, relative to a direct broadband Internet connection, it’s much more costly per user (and more complex) for a wireless carrier to provide the tower and backhaul infrastructure required to connect a mobile phone to the Internet.
  • “the primary sources of mobile data demand are laptops, notebooks and smart phones”. It’s become reality that most mobile devices these days support WiFi in addition to 3G/LTE/4G. And the iPad is a “data only” device. Demand for wireless connections will continue to grow rapidly; carriers need to look at the cost of new towers vs encouraging installation of WiFi access points (for which they have zero cost if the subscriber installs the access point).
  • “WiFi access points cost less than femtocells” When end users can set up a WiFi access point for around $100 whereas the carriers’ towers can run $1MM to $2MM per tower and require a backhaul Internet link, it is actually to the carrier’s capital cost advantage to support the build out of WiFi access points, whether private (home, office) or public (hotels, restaurants, airports, etc.).
  • “WiFi access points are showing up everywhere”. Yep, see the posts referenced above.

Three instances where WiFi has “bailed me out” recently:

  • On both my January trips to CES and IT Expo, I had set up voice roaming with Rogers. Just one complication – over 80% of the calls I received, via roaming partner AT&T, had such poor call quality I had to ask the party to hang up and call them back. But when I called them back it was using Skype for iPhone over WiFi connections to have a more than acceptable call quality. AT&T simply failed, big time.
  • At one recent hotel the hotel wanted to charge $14.95 per day per PC or smartphone for a WiFi connection. However, the hotel chain involved also had an arrangement with Boingo. Once I got the Boingo availability reminder I simply upgraded my mobile Boingo plan to a combined plan at $17.95 per month, connected my laptop, BlackBerry and iPhone and bypassed the hotel charges. As a bonus, I was also able to use the plan while waiting for my flights at two airports, amongst other Boingo-supported locations.
  • During my trips to Spain last fall I ended up in situations where no public carrier access was available but there was WiFi access – once in an office with no 3G signal and once in a hotel in an ancient building with WiFi but no landline phone. Once again in these situations WiFi was the path to get data and Skype for iPhone or Truphone was used for voice calls.

The Bottom Line: Brough says it best in answering his own question “What should an operator do?”:

Mobile operators need to focus on providing bundles of connectivity, not on whether its 3G/4G or Wi-Fi. They should be encouraging Wi-Fi offload by bundling “free” public Wi-Fi access with their mobile data plans.

In the long term, it’s likely most mobile data bytes will go over Wi-Fi.  The 3G/4G network is still necessary to provide a backup path when no Wi-Fi is available. Mobile operators who recognize this can still come out on top, if they focus on facilitating connectivity for their customers regardless of the technology involved.

Note to Rogers: while Andy makes great use of UMA from T-Mobile’s @Home service during his overseas travels, Canadians would appreciate the same level of support for Rogers’ UMA-based services, which are currently limited to access from WiFi hotspots within Canada.

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About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.

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9 Responses to Reprise: Is WiFi Becoming the Unregulated Stealth Carrier of the Future?

  1. James Body February 11, 2010 at 6:14 am #

    Thanks for this well written and well thought out piece of work.

    Like you and Andy, I spend much time ‘on the road’. The one single innovation that has revolutionised my nomadic internet experience is my little Huawei ‘MiFi’. This allows me to generate my own personal (and often mobile) ‘bubble’ of WiFi wherever I go, using a 3G link for the backhaul.

    This allows me unbridled access to Skype and Truphone concurrently on a selection of devices (MacBook Pro, iPod Touch, HTC Hero and Nokia E71) at a capped fixed price – so no billshock. When in the office, at home or in the hotel – where there is good WiFi – I will use the ‘fixed’ WiFi – but where this is either not available (due to movement or other technical reasons) the MiFi comes into it’s own.

    I now listen to streamed internet podcasts whilst driving along the motorway in my car, listen to Spotify tracks on the fly on my iPod whilst walking over the local Chalke Downs – and video conference from the train (not sure on the etiquette aspects of this) – all of which work reliably and in a predictable manner!


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