opinion


Will Google be your future wireless provider, or how about Microsoft or Facebook?

Wifi

Telecoms.com periodically invites expert third-party contributors to submit analysis on a key topic affecting the telco industry. In this article Evan Kaplan, President and CEO of iPass Inc., discusses the increase of Wi-Fi hotspots, and how tech companies and OTT service providers are fuelling the growing use of Wi-Fi. 

Imagine a world where your iPhone, or iPad comes with an Apple-branded global Wi-Fi service, Microsoft gives you global Wi-Fi with your Windows tablet and every time you walk into a retailer or café you are connected to Wi-Fi by Google. Such a scenario may not be as far away as you think. These tech platform players could soon become significant connectivity providers for millions, perhaps billions of people. You only have to look at the current state of wireless to see that the market is ripe for disruption. In fact it’s already started.

A few years ago pundits and analysts were declaring the end of public Wi-Fi but clearly that was the wrong call. If you look at the latest industry figures Wi-Fi is on fire; its growth is showing no sign of slowing down, with predictions that there will be in excess of 100 million hotspots by 2018. The huge boom in smartphones, tablets and laptops and more specifically the explosion of apps fuelling the increasingly connected bandwidth-hungry users has unleashed a global explosion in Wi-Fi build-outs. In fact, for many people Wi-Fi has become a vital utility, supporting their day-to-day interactions.

Such is the demand it is hardly surprising that the Federal Communications Commission (FCC) in the US has freed up additional spectrum for unlicensed Wi-Fi use. While globally there is an increasingly positive reception for growing unlicensed spectrum and publically funded Wi-Fi build-outs in schools, municipalities and other public venues.

A decentralised global Wi-Fi ecosystem is now fast emerging. Today, anyone can build a Wi-Fi network and while this unregulated organic dynamic creates some challenges it is also rapidly disrupting traditional ideas of wireless and creating new business models and monetisation opportunities. While all of this is very exciting it’s still chaotic and can often be frustrating for the end user who has to jump through constantly changing hoops to get connected. However, public Wi-Fi is very early in its evolution and there is a tremendous opportunity to bring increasing order to the chaos.

The alternative network?

Public Wi-Fi for many has already become a viable alternative network and it’s almost certainly going to continue to grow in coverage and quality. The ecosystem has some great dynamics: an effective standards body, a positive volume-cost-curve (as Wi-Fi chipsets are part of the standard build of almost every connected device), and tremendous backwards compatibility between each new iteration of the standard.

That is not to say that the current Wi-Fi experience isn’t without its challenges. Undoubtedly, quality remains a huge source of friction; the Business Traveler Connectivity Report 2014 (conducted by iPass) highlighted that users’ expectations for Wi-Fi are still not being met. For instance, in airports 53% of respondents found Wi-Fi services below their expectations. What’s clear is that there are few players in the industry who currently have the incentive to make their networks high-performance. This is changing as brands, real estate owners, municipalities, and the telcos themselves are increasingly moving towards providing quality high speed services and focused on finding better ways to monetize them.

This is where the technology platform players Microsoft, Google, Apple, Amazon, Facebook, and others step in. These platform players provide services whose value is only realised when people are connected and any friction in getting connected is a decelerator. Take the recent iPhone 6 launch where Apple made a big deal about the device’s Wi-Fi calling capability. When you combine this with ongoing rumours about Apple getting into the music streaming business to compete with the likes of Spotify, it is clear connectivity will be fundamental to its success. For a company that is renowned for controlling the user experience, there is certainly a lot of sense in getting more involved in Wi-Fi.

Paying with a meaningful currency

Why do these platform players have the ability to break down the friction and encourage the expansion of Wi-Fi?  The answer is they are global, have huge user bases, and the ability to monetise their service offerings. This means they can pay the real-estate owners, municipalities, and brands in meaningful currencies – namely cash, advertising and user data.

It goes without saying that to use services such as those from Google and Facebook you need to create a user identity. The value of these identities is huge and being able to link them to Wi-Fi services presents real-estate owners with an opportunity to monetize their networks through leveraging user data. For instance, retailers offering in-store Wi-Fi could use such data to better target shoppers. To use a travel analogy, if the real-estate owners are empty airplanes, the platform providers have the ability to fill the seats and create demand for more planes.

Maximizing the value of the network

The ability to serve everyone’s’ interests is the key to the success of a truly global Wi-Fi network. In many respects the real-estate owners, municipalities and brands have now become the network owners, but the challenge they face is being able to maximise the value of this asset.

Does this sound familiar? If you look back 10 years, many businesses were under-utilising their online assets before the emergence of Google AdSense. Now many are monetising their online real estate and content much more effectively. Google has already applied such thinking to the virtual world so don’t be surprised to see them take a similar approach to the physical one. They are unlikely to be alone, as we are already seeing the likes of Facebook and Microsoft getting actively involved in the Wi-Fi space. For instance, Facebook Wi-Fi turns a business’ router into a Wi-Fi hotspot, connecting Facebook to their customers and bringing additional visitors to their Facebook page. These users can then be targeted with offers and announcements.

The Wi-Fi revolution is yet another shift in value from telecoms to tech, as this global alternative network evolves as a result of the platform players coming to the party. The winners will be those real estate owners, brands, municipalities and telcos who get on board, build and embrace the new Wi-Fi future. Those who don’t will certainly be left behind.

Evan Kaplan_iPass_resizedEvan Kaplan, President and CEO of iPass, was brought in by the board of directors in 2008 to lead iPass through a turn-around. He has been tasked with transforming the company and reinventing its product lines to take advantage of the growth of Wi-Fi. Kaplan was voted one of Network World’s 50 Most Powerful People in the Networking Industry in 2003, and was recognised as Ernst and Young’s Entrepreneur of the Year in the Pacific Northwest in 2001. He has served as a board member for the Center for Innovation and Entrepreneurship at the University of Washington; the Washington Software Association (WTIA); and the Networld + Interop industry trade show.


One comment

  1. joe schmelzer 27/01/2015 @ 11:39 pm

    Hmmm. A lot of interesting points in here, some I agree with, some I struggle with.

    That aside, seems like a bit of an in-congruence to admit, for example, “53% of Wi-Fi users in airports are unsatisfied…” to saying this is the future of networking…

    And while I am open to giving alternative strategies a fair review, personally, I don’t believe the ad model is the way all technologies will head…nor do I think there’s much place in the enterprise for the ad model…which is why companies like Microsoft are still doing well, and we’re seeing a resurgence from Blackberry…

Leave a comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Polls

With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?

  • Yes, Google and Amazon will now dominate this space (65%, 40 Votes)
  • Consumers won't have made up their mind (19%, 12 Votes)
  • No, Google and Amazon will not be able to replace the telcos in the mind of the consumer (16%, 10 Votes)

Total Voters: 62

Loading ... Loading ...