Operators turn to Wi-Fi for service differentiation

For many years Wi-Fi was looked upon as a blunt instrument to provide short-range wireless data transfers.

To this end, it has succeeded remarkable well. Wi-Fi-enabled devices are plentiful, and the standard, which had crept forward agonisingly slowly, is now showing signs of having real innovation and urgency.

Up until now Wi-Fi's greatest opportunity has been from mobile operators and network vendors that want to use Wi-Fi as an offload solution to solve the major boom in mobile data. However, increasingly operators are looking to use Wi-Fi to differentiate their service offerings.

This move to use Wi-Fi to open new doors can already be seen by the number of public hotspot that are already installed across Europe.  According to the market research firm Frost & Sullivan, there almost 200,000 in the UK, 40,000 in France and 18,000 in Germany--and this is ignoring the Fon network that claims many millions of hotspots across Europe.

The vast majority of these remain isolated from cellular networks, but standards bodies liek the Wireless Broadband Alliance, operators and infrastructure vendors are working to bring Wi-Fi technology into the cellular environment to enable a high level of seamless handover.

This move is not about gaining additional revenues, and more about customer retention than data offload.

Analysys Mason analyst Chris Nicoll said he believes that Wi-Fi is not necessarily going to contribute to the bottom line. "A net zero would be considered a good result, but the advantage is increased customer satisfaction," he said.

Operators view Wi-Fi as helping to retain customers. "If the operator can control which Wi-Fi network their customers connect to, and it's a good experience for them, then it's unlikely these customers will shift to another cellular provider," Nicoll said. "This will also mean customers will not be subjected to advertising from new potentially rival Wi-Fi networks or branding."

However, Nicoll quashed the idea of Wi-Fi being a new revenue opportunity. He stressed that including Wi-Fi with the cellular portfolio of services is all about providing positive customer satisfaction and experience.

For more insight into the fast-changing world of how Wi-Fi is impacting mobile operators, check out this feature article.--Paul