In Part 1, Verizon Wireless and AT&T were discussed. To summarize, AT&T has good depth in hotspot/hotzone assets that formulate their WiFi data offload strategy. Verizon Wireless on the other hand does not have any assets and currently partners in a white label fashion with Boingo to offer WiFi access as a benefit for mobile broadband customers. Therefore, Verizon Wireless does not really have a WiFi offload strategy (aside from some stadium/convention center WiFi buildouts to save its cellular network). That can change possibly with a potential CableWiFi partnership.Now onto the other Tier 1 carriers.
Sprint: Sprint currently doesn't have a WiFi offload strategy. They do not own any WiFi assets and like many carriers, encourage their subscribers to use WiFi with the smartphone WiFi feature. Sprint got out of the WiFi game in 2007 with the sale of some airport assets to Boingo. Given that one would expect a WiFi relationship like Verizon Wireless'.
Yet Sprint's unlimited data proposition, its background Clearwire WiMAX flate-rate wholesale deal, and tenuous financial state at the time may have negated a need for a WiFi partner. Going forward, it remains to be seen if WiFi is a necessary strategy component given the pending SoftBank deal and Sprint's majority control of Clearwire (use more 2.5 GHz bandwidth for capacity and speed). It now for the most part has owners economics in furthering the unlimited data proposition. Aside from the broader Network Vision sites, small cells and/or distributed antenna systems are likely going to be deployed to help with meeting subscriber capacity issues. Nevertheless, the wild card is Boingo and its strategic WiFi provider partnership with the Competitive Carrier Association or CCA (which Sprint is a member).
T-Mobile: Similar to AT&T, this carrier owns its share of WiFi hotspots. Though the numbers are much smaller, they do at least provide a wholesale and direct to subscriber revenue opportunities. T-Mobile's WiFi strategy foundation was also based on supplementing the lack of cellular coverage and then building services such as Unlimited Hotspot Calling and Hotspot@Home.
Unlimited Hotspot calling also addressed adding additional calling minutes. Not that it makes a difference today, a WiFi calling feature is a popular feature for globetrotters as a free alternative to paying for global voice roaming rates, provided there is WiFi access.
When AT&T purchased Waypoint, it grabbed the Starbucks contract from T-Mobile. But as anyone knows who frequents that coffee chain, the WiFi is free and clear. T-Mobile still has WiFi presence in airports and hotels. Some can argue that it provides a dual benefit. The direct to consumer WiFi allows for the company to opportunistically address the tablet/laptop user who must have a WiFi connection. With hourly, weekly or monthly plans (and global roaming), T-Mobile no doubt eeks out some revenue from this line of business. With this and the lack of substantial WiFi hotspot assets, carrier offload is not a the core of its WiFi strategy. As with Sprint, Boingo is a wildcard for T-Mobile (as a member of CCA) to embrace since.
As stated, Boingo is a possible resource to tap for carriers to expand a WiFi offering but Boingo is a WiFi aggregator (cobbling smaller players like hotels, motels, RV campgrounds, independent coffee shops, etc.) with limited WiFi assets (mostly in airports). The issue for Boingo is how they can bring substantial domestic WiFi hotspots to the table without outlaying any CapEx.
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!
