Carrier WiFi and WiFi offload: a telecoms business opportunity?

May 12th, 2014, Published in Articles: EngineerIT

 

Worldwide WiFi deployment reached a total of 4,2-million hotspots in 2013, and  it  is forecast to continue to grow at a compounded annual growth rate of 15,0% between now and 2018, to exceed 10,5-million. In South Africa the picture is very different but WiFi is set for exponential growth.  However, lack of spectrum remains a bottleneck.

Sadiq Malik of the Broadband Gurus, Tim Parle of BMI-TechKnowledge, Network and  Zoltan Miklos of Telkom Mobile

Sadiq Malik of the Broadband Gurus Network; Tim Parle of BMI-TechKnowledge
 and Zoltan Miklos of Telkom Mobile.

Three experts: Tim Parle of BMI-TechKnowledge, Sadiq Malik of the Broadband Gurus Network and  Zoltan Miklos of Telkom Mobile fronted a panel discussion at the WiFi Offload Summit Africa 2014, held in Johannesburg recently. The panel discussed the opportunities and challenges offered by WiFi for African carriers. The two main issues confronting carriers is whether Africa, and more specifically,  South Africa is ready for mass-market carrier WiFi  and  how it will affect the existing mobile ecosystem.

Malik set the scene for the discussion by saying the problem lies with the operators siding with the regulators. “This is the game! The game is for spectrum. South Africa operators are crying for spectrum. Have they got it?  No! Will they get it? No!  South Africa started with WiMAX but it did not take off because of lack of spectrum and those that did have spectrum wasted it. The digital spectrum resulting from the migration to digital terrestrial TV will take another four years,” he said.

Malik believes that is better to opt for carrier WiFi.  He also said that the current refarming of spectrum is not sustainable and will further degrade voice services.

Miklos told delegates that Telkom Mobile is aiming  to ultimately have 20 000 hotspots, but  that there too many people taking little chunks out of the market.  Consolidation is necessary if we want to succeed with an efficient national WiFi service in South Africa. “The real challenge is getting the property signed up.  When we sign up a site, we put down the equipment, provide the backhaul at our cost and take responsibility for maintenance and keeping it running efficiently. The problem is that the owner of the site wants to know what is in it for him.   There needs to be an understanding by site owners that it is not possible to just monetise the WiFi.”

Another problem is the question of the length of time WiFi should be provided for free.  Many internet cafe owners will only allow customers 20 minutes, very few will allow up to an hour.  The problem being that often customers will have only one cup of coffee or sometimes just a glass of water and will occupy a coffee shop seat for an hour or longer if free WiFi is provided. (Maybe that is why in Europe you pay for a glass of tap water!)

Summing up the market Parle said that traditional mobile players seek to maintain customer loyalty, plug revenue leakage from smartphones using WiFi,  and build higher-capacity networks at lower cost with WiFi-handoff and gain a foothold in new markets created by WiFi. To do this, they need a deep understanding of the underlying dynamics. Quoting from his presentation:

“Internet-access providers seek to grow the significant opportunity in providing desperately-needed last-mile and local backhaul, increase hotspot coverage and build carrier-WiFi networks from which to offer wholesale and retail services. The opportunities are exponential, but the pitfalls can be deep and caveats abound.

“Service providers across the value chain, as well as application developers, will seek to position themselves to help build and maintain WiFi networks and provide and develop services uniquely enabled by WiFi. They can participate in the boom of WiFi enabled gadgets, products and services if they have the correct framework to understand the trends.

“Location owners, from small café owners to hotels are facing hard choices which are beginning to have a profound effect on their businesses than previously anticipated – if poorly understood or managed.”

But then WiFi is about the experience. It is not there to provide huge bandwidth at high speeds at no cost to the user. Yes, coffee shop owners use it to increase customer traffic, but don’t stay too long!  It should be about checking and sending an email our two, but not to run a business from a coffee shop or even a hotel room.  Conference centres are another problem for WiFi users. When too many delegates log on, the system slows down or even comes to a halt, so out comes the dongle and the logging  onto the service that you pay for.

Is it like that overseas? Not everywhere. Personally I have had good free service at conference centres in the USA and at my favourite coffee shop, Starbucks; and on a USA suburban train but then maybe I was the only user while everyone else was at work!

Ultimately you get what you pay for – or someone else pays it for you!  But I predict that  WiFi will take off big time!

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