25 May Service providers reap the benefits of holistic access propositions
Service providers reap the benefits of holistic access propositions
Previously, we’ve discussed how WiFi can be used as a disruptive asset in the competitive battle. Now, let’s take a look at how different types of operators can benefit from WiFi strategies.
Today, fixed-mobile convergence builds up at different speeds. While already a reality in most European countries, attempts at achieving a purely convergent proposition in the US hasn’t been as successful. Nevertheless, most analysts indicate that convergence is the natural position for most markets due to high customer acceptance and effectiveness in retention. But this acceptance comes at a price: Convergence has often meant ARPU dilution because bundles are offered at discounted prices.
In this context, all types of operators, can benefit from integrating WiFi into their current access propositions:
– Convergent operators. At first glance, it might not be clear why converged operators would need WiFi services if they already provide DSL/Cable/FTTH connectivity, in-house WiFi access, and connectivity on the move through their cellular infrastructure. Why invest in WiFi strategies?
Well, the main reason is the opportunity to unlock their infrastructure by transforming individual access points into a network of hotspots and provide value-added services like WiFi outside of the home, WiFi calls, and guest WiFi services.
WiFi services allow operators to go beyond 4-play and differentiate themselves from competitors, while reducing costs through offloading. Customers enjoy a best-connected experience regardless of their access technology, meaning stronger loyalty. From a business perspective, these services not only reduce churn and costs, but are also key to avoiding ARPU dilution (offering services for a specific additional fee or bundled in high-value pricing plans to drive upsell).
Vodafone Spain is an example of an operator that complemented its convergent proposition, One, with WiFi services for all customer segments.
– Purely fixed or cable operators who take advantage of WiFi strategies, have not only been able to offer value-added, WiFi-based services, they’ve also triggered convergence without deploying a mobile infrastructure.
Fixed operators can unlock their infrastructure to offer connectivity on the move, which was traditionally mobile-player territory only. This is especially important since it allows fixed operators to go beyond their historical in-house limitations. According to FierceWireless, “Cable operators clearly have some big hurdles to overcome to compete in wireless […] but if high demand truly does exist for WiFi-only data plans, mobile network operators may have major battles on the horizon”.
Lastly, fixed operators can wholesale WiFi capacity and gain revenues from high-value, up-and-coming businesses (IoT, WiFi MVNO), turning a network investment burden into a profit machine.
There are many examples of fixed players triggering convergence by expanding their domestic WiFi coverage, such as BT, UPC and Comcast.
– Mobile operators are also turning toward WiFi strategies despite their initial reluctance due to fears of cannibalization of 4G traffic. But evidence of WiFi complementing LTE, the high acceptance of WiFi among smartphone users, and increasing usage of VoIP OTT applications, alerted service providers of the risk of remaining passive. As a result, perception toward WiFi has shifted from being considered a threat to seeing it as an opportunity. Today, all major global operators are offering WiFi calling services, including AT&T, Sprint, ATM, T-Mobile in the US; EE, Orange and DT in Europe, and Rogers Wireless in Canada.
WiFi complements 3G/4G in high-quality broadband services not only by enhancing coverage through WiFi calling, but also by providing major infrastructural savings through offloading/onloading strategies.
Softbank in Japan is an example, and Masayoshi Son, Founder and CEO, has commented: “We were ahead of our competitors in seeing the importance of offloading traffic via WiFi, and made the first move to introduce it. Our competitors didn’t seem to notice the importance of offloading to WiFi until much later, and then they scrambled to start installing access points.”
Want to learn more about the WiFi services operators can deliver to customers? Click here.