Mobile operators need to look at Wi-Fi offloading with a fresh business model in mind that may not resemble their former ways of doing business, says Selina Lo, CEO of Ruckus Wireless.
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"The business model requires some creative thinking. It's not the old business model of how many megabytes and what kind of ARPU you can get. It's the business model that combines the service provider's interests and all the ecosystem around that," Lo told FierceBroadbandWireless.
Lo, whose company supplies Wi-Fi products to carriers and enterprises, noted mobile operators worldwide are finding numerous was to monetize Wi-Fi offloading. For example, PCCW operates more than 9,000 hotspots in Hong Kong and provides unlimited Wi-Fi access to its fixed-line or mobile subscribers for just a few dollars extra each month, helping improve customer loyalty. The operator also developed a prepaid 3G program aimed at teenagers, with which it bundles unlimited Wi-Fi, thus grooming cash-restricted youth to consume mobile broadband services. "Later, when they can afford it, they would naturally become PCCW customers," said Lo.
In addition, mobile operators are increasingly partnering with retail chains, including convenience stores, for site placement that provides the operators' Wi-Fi networks with access to street traffic. While supplying the store with its own SSID, operators can operate a parallel network with a separate SSID that serves public users, thus extending their Wi-Fi coverage, said Lo.
However, she cautioned that operators should be selective about where they deploy Wi-Fi, because they don't need blanket coverage. "You need to put it where there is a high concentration of pedestrians or nomadic users, so that tends to be the locations that are train stations, stadiums, airports, central business districts around plazas, restaurants and bars. Those are the places that get the biggest bang for the buck," said Lo, noting that 80 percent of high-density pedestrian locations are indoors rather than outdoors.
She also addressed the debate over who controls smartphone access to Wi-Fi networks. "If an operator wants to control whether a client would use Wi-Fi or cellular, the service provider has to put a piece of software on all their handsets, which many of them are not willing to do. Today, it is still the user's prerogative as to whether they want to want to go onto Wi-Fi or they want to use 3G," said Lo.
She noted, however, that increasingly smartphones, such as the Apple (NASDAQ:AAPL) iPhone, are pre-set to access Wi-Fi networks that have previously been linked to by the user.
Lo said she has high hopes for the future of Hotspot 2.0, an industry initiative overseen by the Wi-Fi Alliance that employs 802.11u technology to enable seamless automatic Wi-Fi authentication and handoff for mobile device users, who will no longer have to be bothered with discovering accessible Wi-Fi networks. "802.11u is going to be a very critical standard. Everything being done by the Hotspot 2.0 group is going to be very critical to the user experience level," said Lo.
She said Hotspot 2.0 is at the plug-fest stage, with the Wi-Fi Alliance putting together a test bed for certification in the second half of this year.
A newer initiative was recently announced by the GSMA and Wireless Broadband Alliance (WBA), which aims to make roaming between mobile networks and Wi-Fi hotspots more seamless by using the device's SIM card for authentication. The groups are aiming to develop a platform that will be available for commercial products in early 2013.
"I absolutely think these are two organizations that are going to make things happen," said Lo.
There are existing technology standards such as Proxy Mobile IP (PMIP) and GPRS Tunneling Protocol (GTP) that can be applied to enable roaming between 3G and Wi-Fi, "but nobody has really done it on a big scale, so you don't know how scalable it is," she said.
Development work such as that undertaken by GSMA and WBA is crucial to making it possible for operators to actually use the technological tools they have at hand to create seamless roaming between heterogenous networks. "Having the organizational structure to define this and certify this is going to be very important," said Lo.
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