Location Based Services in the Service Provider (SP) world is a very hot topic at present, with many SP’s looking for monetization opportunities for Wi-Fi.
Cisco has been working with our service provider customers to help deliver monetization capabilities; one way of opening new revenue opportunities is by using our new Connected Mobile Experiences (CMX) Solution.
Let’s first take a brief look at some of the drivers for Wi-Fi in the SP world and some steps along the value chain.
- When SPs initially started investing in Wi-Fi, the focus was on Wi-Fi Hotspots as a means of delivering data connectivity service to consumers, sometimes for free as part of a wider service (i.e. cable subscription) or other times for a fee (i.e. monthly fee to roam across hotspots). This model, while still used, is becoming less common as consumers are beginning to expect Wi-Fi for free -- or at least not via an overt charging model.
- Mobile Offload has been spoken about for a number of years. In fact, now many SP organizations, especially those with a cellular divisions, are seeing 3G/4G offload as an important component for mobile data optimization and hence an indirect monetization of the Wi-Fi infrastructure through cost savings. Indeed some see Wi-Fi in large venues as very strategic for handling peak data traffic (i.e. stadiums etc).
- The more strategic and forward looking SP’s are now firmly focused on delivering value added services over their Wi-Fi infrastructure, with some even looking at how to marry their Wi-Fi and Cellular components to accelerate value. This is where Cisco’s CMX solution is fitting very well with the emerging SP minimization strategy around value added wireless services.
So what are the emerging models where SP’s are beginning to focus their attentions on monetization and new, additional revenue opportunities?
As the Wi-Fi space evolves, no doubt the business models will evolve and be refined. However, at this time there are a number of models emerging and being tested in the marketplace.
These can be broadly categorized into 2 areas -- cost reduction and revenue generation:
- Cost Reduction:
- The key measure here is that Wi-Fi can be seen as a means to enhance customer service and in some manner reduce customer churn. There is no doubt that even a 1% reduction in churn rate based directly or indirectly on the Wi-Fi offerings has a major impact on the bottom line of the business.
- As mentioned earlier -- Mobile data offload helps significantly with data traffic scaling and associated costs.
- Revenue Generation:
- Offering Wi-Fi managed services to customers/venues is a very hot trend right now which has created revenue streams for many SP’s
- The opportunities for additional revenues are emerging through Location based Analytics, such as those with CMX Analytics, where SP’s can monetize this valuable data by re-selling analytics reports directly or indirectly to their clients.
- The next wave of monetization opportunities are around location based advertising. While just emerging, SP’s are starting to build relationships and partnerships to be able to deliver real-time, location specific, customer specific highly targeted advertising direct to the handsets, increasing advertising revenues.
Cisco’s CMX Solution is being deployed by a significant number of SP’s globally and we are working very closely with these customers as the monetization models are tested and refined in the marketplace.