It
is amazing the steps we take to put our smartphones on to Wi-Fi rather than
burn through precious data plans. Short
of forcing consumers into a game of Twister, there are few things more convoluted
(or frustrating) than using a smartphone to type usernames, passwords or credit
card numbers, while sitting in an airport lounge or coffee shop juggling a hot
drink. Still, this learnt behavior can
be seen anywhere a smartphone is out in public.
This
complexity was meant to have been solved years ago with a protocol called WISPr
– a first attempt at standardizing and automating connectivity to Wi-Fi such
that, as consumers, we would never have to deal with pesky web login forms and
endless service menus. Unfortunately, this
protocol never made the headway expected and as a result, only with isolated effort
(think AT&T Wi-Fi access in the iPhone) has automatic Wi-Fi connectivity
become available to consumers out-of-the-box.
In
the absence of a concerted mobile operator, equipment and smartphone vendor push,
independent Wi-Fi operators and app developers stepped into the fray providing
proprietary “islands” of automated connectivity. Consumers typically download an app to
their smartphone, sign-up for a plan and then hope that where they go, service
is available. Some of the networks are
big – Boingo have 600,000 hotspots, Fon have over 5 million through crowd
sourcing, and Devicescape claim 12 million “curated” hotspots – each company with
a slightly different business model. Operators
such as T-Mobile, Orange and PCCW have all built-out their own large-scale Wi-Fi
networks, often available independent from a mobile contract, always with
accompanying iPhone and Android applications.
This
is all set to change with the somewhat low-key arrival of new standards and
products wrapped-up in what is known variously as Hotspot 2.0, 802.11u and Passpoint. All are, confusingly, part of the same
initiative – an industry accepted method for automatically authenticating and
connecting Wi-Fi users using the SIM cards of their smartphones (or cameras,
toys or cars for that matter). There
are a number of additional compelling features too. Encryption to the hotspot comes as standard
and there is a hotspot advertising feature which allows venues or locations
such as stadiums or shopping malls to provide location specific Wi-Fi that
might connect you to a specific web site through an icon that appears on your
smartphone.
What’s
different this time around and why we should see traction is that the industry,
through the Wi-Fi Alliance, has been busy certifying infrastructure products from
companies such as Aruba, Ruckus, Cisco and BellAir, along with chipset and
handset vendors such as Intel, Qualcomm, Marvell, LG and Samsung.
Of
course, just because products are now available doesn’t mean we can get
connected tomorrow. Niels Jonker, Chief
Scientist at Boingo, speaking at CES last month claimed that roll-out would likely
take from now through 2015. Importantly
though, having the entire ecosystem participate should mean that when you
purchase a smartphone with an operator contract, any Wi-Fi hotspot which has a
roaming agreement with your operator should (over this time period) allow
automatic and seamless connectivity.
This
brings us to an interesting position for mobile operators and their focus on
Wi-Fi. The assumption has been that
consumers with smartphones will pay for both a voice and a data plan. Increasingly, this is turning out not to be
the case, especially in countries such as India, China and Indonesia where
smartphones are becoming every bit as popular as the US and Europe. Consumers are buying the same pre-paid voice
plans as before, but exclusively leveraging Wi-Fi for their data.
This
is creating a “dammed if you do / dammed if you don’t” moment for operators. Remember – the master industry plan involves
delivering LTE to everyone everywhere and Wi-Fi expenditure by operators today
is a fraction of the tens of billions being poured into 3G & 4G network
upgrades. From the operator’s perspective, the best
consumer buys service but doesn’t use it – a good reason operators have
encouraged Wi-Fi off-load but a strategy that might be working a little too
well. If consumers have unlimited
Wi-Fi and limited 3G/4G data – more automated and ubiquitous Wi-Fi will lead to
less revenue for the operators.
For
this reason, we are likely to see changes in how mobile operators bill for
Wi-Fi as the lines between 3G/4G and Wi-Fi blur. To put this another way – Wi-Fi has been a
method for keeping users off precious 3G/4G connections but going forward, it
will be integrated into seamless service where the consumer won’t know or care
if they are on LTE or Wi-Fi. Further, as voice services migrate to VoLTE –
which by the way works just fine on quality WiFi networks – Wi-Fi and/or LTE
deployment will be a cost choice decision for the operators based on cell size,
density and available frequency bandwidth. Operator Wi-Fi will finally come in
from the cold.
This
leaves Wi-Fi only players in a different position too. They will
need to leverage their global alliance networks to become full-service players and
deliver voice too. Last month’s FCC announcement
by Julius Genachowski to free-up unlicensed spectrum for Gigabit Wi-Fi will
surely aid in this progression and lower costs for entry, at least here in the
US.
In
many parts of the world, we will likely see LTE and Wi-Fi go head-to-head, especially
in high bandwidth and small cell deployments where cost is a primary
consideration. Indeed, I am reminded of
the battle fought in the 90s over desktop connectivity. Numerous vendors bet against Ethernet, with
Token Ring, Fiber Channel and even ATM. They lost not because they had inferior
technology but because Ethernet price points and the ubiquity of Ethernet devices
ruled the day. In the “Internet of
things” the volume of connected devices will be many times more than the volume
of smartphones and these “things”, for cost and availability reasons will
likely have Wi-Fi, not LTE. Putting
the next billion Wi-Fi devices on service contracts is the next open space.
For
reference, below is a link to a list of Passpoint products certified by the Wi-Fi
Alliance:
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