Mobile operators may want to reconsider their level of investment and commitment to the broader deployment of public Wi-Fi hotspots, based on a new report that finds smartphone users much prefer to access private or unmanaged Wi-Fi networks.
Smartphone users rely on Wi-Fi for their primary data connection, but they rarely turn to managed, public hotspots, favoring instead private or unmanaged, self-provisioned public Wi-Fi hotspots, according to mobile analytics vendor Mobidia Technology and analyst firm Informa.
The findings were based on data collected in January 2013 from an anonymous sampling of millions of users who have downloaded Mobidia's smartphone application, My Data Manager.
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Source: Mobidia |
Wi-Fi data consumption is important to smartphone users and is two to 10 times that of cellular data consumption. Users in most developed countries--Japan is an exception--consume well over 80 percent, and often more than 90 percent, of their total mobile data on Wi-Fi networks, said the Mobidia and Informa in their report.
Private or unmanaged, self-provisioned public Wi-Fi hotspots, such as those found in many small businesses, account for more than 90 percent of smartphone Wi-Fi traffic.
However, managed, public hotspots, such as those offered by Wi-Fi network providers or mobile operators, consistently account for very little traffic across all countries analyzed. "For example, traffic on these hotspots was just 3 percent and 2 percent of all Wi-Fi traffic in the leading Wi-Fi markets, the U.S. and the U.K., respectively," said Mobidia and Informa.
"While 2 percent may not appear to reflect the hallmarks of a leading market, at that level, the U.S. can actually be considered to be in the leading pack of markets in terms of the distribution of smartphone-originated traffic to managed public Wi-Fi hotspots," the report added.
AT&T (NYSE:T) "has unquestionably been an innovating force behind the renaissance of public Wi-Fi efforts," said the companies, but even AT&T's public Wi-Fi hotspot usage results leave a lot to be desired.
The operator stopped reporting statistics on the volume of unique connections to its public Wi-Fi networks in January 2012, when it announced more than 486.9 million unique connections in the final quarter of 2011 alone and over 1.2 billion for the full year, said the report.
Given AT&T's 2011 mobile customer base of some 100 million mobile connections, "in that context the 1.2 billion connections to its 30,000-strong hotspot footprint represented the equivalent of just one connection per customer per month," said Mobidia and Informa.
They noted that number is even skewed by the fact that a much lower percentage of AT&T's customers are likely to have access to the operator's hotspots, which were also available for use by the general public. The companies further noted AT&T's CEO Randall Stephenson said in June 2012 Wall Street Journal op-ed that his AT&T mobile customers only offload about 1 percent of their total traffic to the operator's 30,000 Wi-Fi hotspots.
Mobidia and Informa couched their findings by saying the Wi-Fi usage report should not be "interpreted as an indictment of the value of managed public Wi-Fi to smartphone users." They noted some users value managed public Wi-Fi usage as evidenced by their selection of tariff plans contain bundled managed public Wi-Fi access. Further, there are some indications that such access can enhance customer loyalty.
A recent study conducted by Analysys Mason, on behalf of Amdocs, placed service differentiation ahead of data offloading as the leading reason why operators are adopting Wi-Fi. Yet the value of market positioning and differentiation will likely be difficult to quantify, which is why operators might be wise to consider the actual return on investment they will get from public Wi-Fi network rollouts.
Mobidia and Informa caution that "as the industry enters a crucial commercialization phase of networks and devices using Passpoint and Next-Generation Hotspot technology in 2013, it is undoubtedly time for operators to realistically evaluate the role they will be able to play in providing an enhanced Wi-Fi user experience to their customers."
The companies suggested operators may want to take another look at their deployment plans for public Wi-Fi hotspot networks.
"The question of whether this investment can be justified on the basis of mobile network congestion alleviation looks increasingly shaky. Not only are cellular traffic growth forecasts now subject to major revisions downwards, it is clear that where Wi-Fi is being used to serve connectivity needs it is, for today and in the short- and medium-term, being primarily driven by usage of self-provisioned/private Wi-Fi hotspots," said the firms.
Mobidia and Informa also warned operators that they could suffer serious marketing stumbles if they promote a "seamless Wi-Fi and cellular experience" that only applies to the "5 percent or fewer occasions when usage is actually taking place over the operator's own managed public Wi-Fi."
For more:
- see this Mobidia and Informa release
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