In the decade or so that Wi-Fi has existed, most technologists and mobile industry executives viewed it as the “poor cousin” to licensed mobile communications. Now mobile operators around the world are asking how they can effectively use Wi-Fi to help them cope with the huge surge in mobile data traffic and to meet customer needs and expectations. In addition, they are all eager to understand how they can make money from Wi-Fi and to make the business case to justify investments in deploying Wi-Fi networks.
As many leading SPs are now discovering building a Wi-Fi network creates not only significant business value, but creates a virtuous circle that leads to ever-increasing sources of new Wi-Fi value. As the Wi-Fi Monetization Virtuous Circle outlined below shows, the reinforcing network and scale effects of Wi-Fi investments not only deliver unique business benefits at each of the levels, but also establish a valuable platform to exploit additional monetization opportunities at the next level.
Deploying an initial public, home, and business Wi-Fi network provides a compelling ROI through customer retention or mobile offload business models. The value of these baseline business models continues to grow in line with the Wi-Fi network. A larger public Wi-Fi network is more valuable to customers greatly reducing their incentive to churn to another provider. Equally, a larger network means that mobile operators can offload more of their data traffic to Wi-Fi with the concurrent cost savings. And there is more…
After this initial network is established there are now new revenue opportunities, such as managed services and roaming agreements that can be built on this growing Wi-Fi platform. As the network expands, and is increasingly available at key venues, service providers can now offer a range of additional value-added services to extract new sources of value from the Wi-Fi network. Services such as advanced advertising, data analytics and enhanced retail experiences increase the value of the Wi-Fi network even further. Now we have come full circle: Expansion of the network to new venues and the addition of new services make the network even more valuable and indispensable to end users, improving the ROI for the all of the business models.
Service providers who are successfully delivering business value from Wi-Fi do not view individual monetization opportunities in isolation. Rather, they view investments in Wi-Fi as a platform upon which they can deliver a pyramid of new business models, creating a Monetization Virtual Circle of increasing business value.
Further details on how service providers can create new and innovative sources of value from Wi-Fi can be found in our recent white paper: Wi-Fi: New Business Models Create Real Value for Service Providers