CCS Insight analyst sees danger for operators in EC public Wi-Fi plan

Shopper with smartphone

CCS Insight warned that European Commission (EC) proposals to deploy municipal Wi-Fi networks could be bad news for mobile operators.

EC president Jean-Claude Juncker detailed the free Wi-Fi plan among other proposals for reforming the telecoms sector during his ‘State of the Union’ speech on Sept. 14.

The proposal, named WiFi4EU, aims to assist communities in the European Union to offer Wi-Fi access to citizens and visitors. The commission said it would invest €120 million ($133 million) to enable between 6,000 and 8,000 local communities to fund the deployment of Wi-Fi hotspots in parks, town squares, libraries and other public buildings. Such hotspots would serve between 40 million and 50 million connections per day, a commission fact sheet revealed.

CCS Insight analyst Raghu Gopal said in a blog post that the plan is likely to be welcomed by consumers, but that it “could be a disruptor to mobile operators and even local Internet service providers,” because Wi-Fi “could be a good substitute for cellular access” for members of the public seeking mobile access to the Web.

Smartphone users have “become clever in juggling their connections,” Gopal continued, hinting that mobile subscribers will inevitably ditch mobile data connections in areas where free municipal Wi-Fi is available.

Gopal added that an EC action plan covering the rollout of 5G networks in the region from 2018 could also be impacted by the WiFi4EU plans. “European wireless operators are already preparing to roll out the next generation networks, but the same efforts to encourage fast WANs could be slowed by plans to encourage fast WLANs,” he explained.

However, Gopal noted that the EC’s public Wi-Fi plan is not a sure thing. “The goal of digital inclusion is admirable, but municipal Wi-Fi has a mixed track record of success, which indicates that the realities of implementation can’t be easily cancelled out.”

For more:
- read Gopal’s blog
- see the EC’s WiFi4EU fact sheet (PDF)

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