WiFi Grows Beyond Cellular Shadow - Multichannel

WiFi Grows Beyond Cellular Shadow

MSOs See Tech as a Revenue, Stickiness Driver
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WiFi’s signal is getting clearer.

The local-area wireless broadband technology already carries more Internet traffic to consumers’ smartphones and tablets, laptops and PCs than licensed wireless and wired connections combined, according to data from the National Cable & Telecommunications Association.

Earlier this month, the WiFi Alliance, a trade group that promotes the technology and certifies products for interoperability, unveiled a set of “Passpoint” certification features that enable WiFi networks to look and behave more like cellular networks (see “Cable Inches Toward ‘WiFi-First,’ ” Oct. 13, 2014).

ONE STEP CLOSER

Passpoint puts WiFi one step closer to becoming a carrier-grade network. This is important because if cable operators want to increase what they charge their residential and commercial customers, they will have to offer them reliable and seamless connectivity.

It’s a scenario similar to cable’s entry into the telephone business in the 1990s. Operators had to prove they could offer a service that was comparable to, and ultimately better than, what the incumbent telephone companies offered.

In May, the Federal Communications Commission made an additional 100 Megahertz of wireless spectrum in the 5-Gigahertz band available for unlicensed WiFi use. This gave carriers and MSOs some much-needed bandwidth to operate WiFi networks without interference and bottlenecks, according to Justin Colwell, CableLabs vice president of access network technologies.

More FCC auctions are expected, which will benefit cable operators wanting to expand their public and private WiFi offerings going forward. The majority of consumer phones and tablets can now live up to their potential with this new spectrum, Colwell said, so the ability to build a bigger and better wireless offering will serve as a value-added service to consumers.

The expansion and interconnection of wireless networks will also likely be a financial boon for operators, experts said.

It’s unclear just how much money can be generated with WiFi networks, but everyone seems to want get into the game. Comcast chairman and CEO Brian Roberts extolled WiFi prospects in a presentation at the Bank of America Merrill Lynch Media Communications and Entertainment conference in Los Angeles on Sept. 16.

“We have a tremendous asset in WiFi,” Roberts said. “Our relationship with our customers and the people who are not our customers understanding how great and powerful a WiFi connection can be … is a great thing for our company and our investment.”

In addition to its pledge to activate 8 million hotspots in its service territory by year’s end and joining with Cablevision Systems, Time Warner Cable, Bright House Networks and Cox Communications in offering customers free access to 250,000 hotspots across the country, Comcast has been busy laying the groundwork for other partnerships.

The company is offering two Asian cellular operators access to its WiFi hotspots in the U.S. Customers of Japan’s KDDI and Taiwan Mobile can use Comcast’s Xfinity WiFi hotspots when they travel to the U.S., reducing the need for their subscribers to pay expensive international roaming charges.

INTERNATIONAL PACTS

Financial details of these deals have not been released, but the pacts serve as an example of the potential windfall WiFi offers to operators.

Comcast has also cut a peer-to-peer deal with Liberty Global whereby the European MSO’s customers can use Comcast’s WiFi free of charge when traveling in the U.S. and Comcast’s customers can use Liberty Global’s hotpsot WiFi services free when they travel in Europe. Right now, it’s a fair exchange of assets and Comcast executives declined to discuss the deal or its long-term implications for the company’s business strategy. But it is another sticky service designed to keep customers happy with and tied into their service.

Most U.S. WiFi users currently connect at home, CableLabs’s Colwell said. But that’s changing rapidly as consumers increasingly want to take their services with them as they venture outside. And operators want that, too.

Yet burgeoning use of cellular wireless Internet devices has created a logjam for providers, who are increasingly offloading their data traffic onto WiFi to alleviate the burden. A Cisco Systems study has predicted that 52% of all worldwide mobile traffic will be offloaded to WiFi by 2018; in the U.S., that number jumps to 64%.

The increase in mobile data traffic will likely result in new and unlikely partnerships and mergers, with cable operators sitting in the catbird seat, some observers have predicted.

“The time is coming when WiFi will shift from being a ‘secondary’ network to being a primary one,” MoffettNathanson partner and senior analyst Craig Moffett wrote in an Oct. 6 research report on WiFi. “[I]nstead of thinking of WiFi as an alternative to cellular everywhere WiFi is available, we will instead to begin to think of cellular as a backup network needed only when WiFi is not.”

Some cable and cellular companies are already making money with WiFi services. Raleigh, N.C.-based Republic Wireless is offering a WiFi-first service starting at only $5 a month and other wireless providers, including T-Mobile and Verizon Wireless, are prepping their own WiFifirst services as well. But some industry experts think cable-enabled WiFi will be in the driver’s seat when it comes to controlling the spectrum and the dollars derived from offering the service to consumers and businesses.

While much has been made about consumer WiFi services, a big potential revenue generator for cable lies within the commercial sector. Comcast is already offering WiFi services in several public spaces in its service territory, including some subway stations in its hometown of Philadelphia, as well as in some shopping malls.

In Santa Clara, Calif., Comcast is handling the backhaul services for Levi’s Stadium, the new home field of the National Football League’s San Francisco 49ers, with service costs offset by leveraging in-game experiences. Event attendees can order food or drinks and have them delivered to their seats — and receive marketing messages touting deals on goods sold at the stadium.

Bright House Networks recently activated free public WiFi in in downtown Tampa, Fla., as well as the area’s riverfront public parks. It’s free to the public for up to two hours a day or 1 Gb per month. BHN subscribers can access the service for free all of the time.

Once a non-BHN customer surpasses the free allocation, there is an option to purchase additional service.

The consumer side of the business is somewhat easy to implement, as dual private/public routers are deployed in millions of customers’ homes, CableLabs’ Colwell said. The business becomes a bit more complicated and expensive on the commercial side of the equation, though. There are things operators can do to mitigate costs using automated planning and project management solutions from such companies as Amdocs.

Moffett predicted the revenue that could be derived from both residential and commercial WiFi justifies costs. The fourth leg of the cable telecom industry’s stool would be complete.

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