Purple Free threatens telcos' opportunity to monetize wifi user data

Public wifi provider Purple has declared war on BT and other telcos providing wifi hotspots, launching its own solution for businesses and venues free-of-charge.

The Purple business model does not compete directly with the telcos, though it certainly will create a problem for those looking to commercialise data with advertisers and third party organizations. Put in the most simple terms, Purple provide free wifi solutions to venues or businesses, but then offer data analytics and customer insight solutions off the back of this. This could be a retailer looking to make better use of physical space in a store or creating more relevant social engagement tools.

Aside from the attractiveness of a free wifi service, the team also claim it is simply a better product as well. Your correspondent is always sceptical when companies claim they are the best, however experiences to data with public wifi would certainly leave me open to the claim.

“Purple Free is sure to cultivate fresh opportunities and cement our place as the leader for wifi and analytics,” said Gavin Wheeldon, CEO of Purple. “Customers simply don’t need to pay excessive costs for a simple guest wifi solution and with Purple Free, the price tag is instantly eliminated and the product is of a superior quality.”

Aside from the money which is generated by the telcos by offering wifi solutions to customers, there is also an opportunity to replicate the Facebook walled garden business model. As the connected economy becomes more prominent, many telcos are hoping to create a services business model, where providing connectivity on the go is a freebie, however commercializing data by selling to third parties is where the profits are made. The model has been proved successful by Facebook, however your garden wall has to be big enough.

With the launch of Amazon’s Echo/Alexa and Google Home/Assistant, the telcos are playing catch up to control the gateway to the living room, though it did look to have a solid start for wifi in public spaces. Unfortunately for the telcos, Purple and similar other companies offering free wifi solutions are making the slice of the pie smaller, and the opportunity to monetize data to third parties slimmer.

We got in touch with Purple and for the moment, there are currently no intentions to create the walled garden business model, however they do offer white labelled wifi solutions for brands. This aspect of the business is essentially skipping out the connectivity provider, as the brands could collect the data directly from the customers.

When we spoke to Accenture’s Francesco Venturini at Mobile World Congress, he highlighted one of the major opportunities for telcos was creating a services business model and controlling access to the user. This could have been a major step in avoiding the decline to commoditization of connectivity, however, as companies like Purple become more prominent in providing free wifi, the opportunity becomes less and less likely.