Survey: Wi-Fi becoming critical for differentiation
Wi-Fi isn’t just for data offloading anymore. It has become a major differentiator from other service providers, albeit a problematic one.
A survey conducted on behalf of Amdocs reveals that service providers have an intense interest in Wi-Fi, even as they struggle with technical and business issues. Authenticating customers as they roam and as they juggle devices remains an issue, and service providers are still casting about for sure-fire ways to monetize the service.
Service providers are certain that providing Wi-Fi is important. Eighty-nine percent of all service providers surveyed (including fixed, mobile and cable) have either deployed, or plan to deploy or leverage, Wi-Fi networks. On average, respondents ranked Wi-Fi’s importance as 7+ out of 10, underscoring the strategic value of Wi-Fi for service provider growth.
People want Wi-Fi connectivity, and they want it everywhere, not just in the home. That desire has been reflected in a long string of municipal Wi-Fi efforts. Though most of those have thus far been aborted, cities are not giving up; Chicago and Seattle are pursuing public-private networks, and Google just agreed to wire part of New York City.
Amdocs’ survey indicates that Wi-Fi roaming is a priority for service providers. On average, Wi-Fi roaming – while still a relatively immature market – was ranked 8 out of 10 in terms of strategic importance.
Forty percent of service providers cited service differentiation as the main driver for their Wi-Fi strategies, indicating that operators expect Wi-Fi to be more than a solution for simply offloading congested networks and are interested in using it to provide incremental value to their customers, Amdocs noted.
A seamless experience is considered strategically important, but authentication issues are viewed as the top technical barrier to deploying Wi-Fi. Providing a seamless subscriber experience between cellular and Wi-Fi networks was weighted strongly (average score: 8.1 out of 10) by service providers, which suggests that they view a high-quality customer experience across 3G/4G/Wi-Fi as a top priority. However, user authentication ranked highest among the top technical barriers to deploying Wi-Fi, highlighting the importance of flexible and secure authentication in achieving a seamless experience.
Technical issues tend to get sorted out. Making money is a different issue. Service providers report that new monetization models are needed. Fifty-seven percent of service providers that have deployed Wi-Fi claim they are monetizing their offerings, but the survey also found that many of them are looking for innovative models that go beyond directly charging customers (who typically equate Wi-Fi with free Internet access). These findings suggest that operator business cases for Wi-Fi services are underdeveloped.
The survey also reveals that the first-mover advantage is critical: capturing key strategic locations for Wi-Fi hotpots before they are claimed by competitors is a key objective for many service providers. Even “build-only” service providers will need to partner to capture these key sites.
“Our research shows that while the service provider Wi-Fi market is still in its early stages, service providers are adopting a forward-looking attitude that goes beyond using regular Wi-Fi to offload congested 3G and 4G networks,” said Chris Nicoll, principal analyst at Analysys Mason. “While offload is still a priority, it’s clear that service providers are looking to service provider Wi-Fi as a competitive differentiator, and there is strong interest in exploring new and innovative business models for Wi-Fi monetization.”
Rebecca Prudhomme, Amdocs vice president for product and solutions marketing, said: “This underscores the importance of having secure, scalable authentication and authorization solutions in place for ensuring a seamless experience as customers move in and out of the Wi-Fi network. Furthermore, real-time policy control opens up new opportunities for Wi-Fi monetization by allowing service providers to offer a range of differentiated services over Wi-Fi, such as tiered services and premium quality of service.”
The research was conducted for Amdocs by global research and consultancy firm Analysys Mason.