Friday, October 19, 2012

Carrier WiFi Offload - Some Thoughts - Part 1

It's well known that WiFi plays an important role in mobile data consumption.  From the consumer view, it's faster than 3G (and maybe 4G in some cases), it's usually free, and it's seemingly ubiquitous.  

From the carrier view, any subscriber getting off the cellular data network helps capacity and saves on the customer's data caps, if any.  Some carriers can argue that open WiFi is not secure and worried about possible liabilities of customers throwing their data 'in the clear' on unsecured networks.
Given the differing carrier stances, here is where I see carriers' WiFi strategies. 

AT&T: Before the company bought Wayport in 2008,  it boosted its hotspot count.  Since then, AT&T has been reinforcing its national leadership in WiFi hotspots. AT&T smartphone and mobile broadband customers get the benefit of automatically connecting into AT&T hotspots or HotZones.  Their nice (and proprietary) smartphone client does this seamlessly without the customer needing to hunt for the correct SSID.  In this instance, it's a win-win. Customers get a seamless fast experience and AT&T offloads the data traffic.  It continues to invest in this technology with more and more hotspots deployed monthly, quarterly, annually.  So AT&T's WiFi strategy is to own the assets and in directly monetize through customer subscriptions.   

Verizon Wireless/Verizon: Verizon has never really warmed up to WiFi in the cellular network. These statements were made in the 3G deployment era and have continued as the corporate position when executives are asked about their WiFi strategy.  On the surface, it appears Verizon Wireless' WiFi strategy is not to have one.  However, a little known fact is that they indeed have a relationship with Boingo albeit a white label one.  Boingo powers both Verizon fixed line as well as the wireless business unit.   Unlink AT&T, only mobile broadband and specific fixed hi-speed internet (e.g., FiOS) customers are eligible.  Smartphone customers cannot take advantage.  But that may soon change with the introduction of CableWiFi in May 2012.

Cable is my Frenemy:

Cable companies have always been aligned with Sprint but with missteps on Clearwire, cable wireless retail strategy (Pivot), the relationship ended.  In 2006, cable companies' AWS spectrum foray (a.k.a. SpectrumCo) also included Sprint. But Sprint got out of SpectrumCo in 2007 cashing out its share. Fast forward to August 2012.  The FCC approved the sale of the former SpectrumCo AWS portfolio to Verizon Wireless.  Verizon Wireless and the cable companies are friends. Verizon Communications (fixed line) are enemies. All this closeness opens up the possibility that Verizon Wireless will use CableWiFi coverage to address data offload and will be Verizon Wireless' WiFi strategy.  

If so, Boingo is left without a dance partner.  To its credit, Boingo saw the writing on the wall and going to court members of the Competitive Carrier Association in September.  In fact, Boingo became CCA's strategic WiFi partner.

 More on other companies in the next post!