It’s almost an understatement to say that the Wi-Fi platform is “evolving.” That’s because the rate of its evolution is so rapid and the scope of its impact is so broad. Over the next decade and beyond, we will witness an explosion of new business cases enabled by an array of new and developing Wi-Fi functionalities.
Going forward, we will also see increased investment in the development of new technologies that will drive the evolution of the Wi-Fi ecosystem. As the ecosystem changes, so must service providers. Old use cases will stagnate while new use cases will emerge as we continue to undergo the transition to carrier-grade Wi-Fi.
Business Model Levels of Maturity
Achieving carrier-grade Wi-Fi means that a wider range of services can be supported. It also means that new revenue opportunities will develop.
In the early days of Wi-Fi, providers were able to enjoy revenue growth from the dramatic rise in demand for wireless access. As multi-network integration capabilities became available, MSOs, MNOs, and telecos took advantage of the opportunity to add Wi-Fi to their platforms and construct their own Wi-Fi hotspots. They relied on wholesale and roaming deals to fill in their service area gaps.
Fueled by emerging service opportunities, today there exists a complex web of network ownership, wholesaling, and roaming that allows all of the market players to monetize Wi-Fi connectivity.
At the same time, mere connectivity is no longer enough. Newer revenue streams are increasingly coming from markets in which providers are able to combine connectivity with other services to deliver higher value to their customers. Services like bundling Wi-Fi with cloud storage or applications, using mobile apps that leverage location awareness in a dense Wi-Fi environment, using Passpoint to support personalization and big data create far-reaching opportunities for providers.
We’ve only begun to scratch the surface of the many developments in the Wi-Fi ecosystem and their impact on service providers. To gain a better perspective, it will help to take a top-level view of where many of the business models are in their life cycle.
Well Established Business Models
These are the business models that have been around for quite some time and have very little room for growth, if any:
• Pay-As-You-Go Access
• Wholesale Access
• Free Access to Drive Other Services
• Added Value for Broadband Subscription
• Advertising and Sponsorship
Rapidly Growing Business Models
These business models are rapidly growing and continue to offer substantial opportunities for providers:
• Carrier-Driven Cellular Offload
• Public Wi-Fi Hotspots
• Neutral Host services
• Venue and Brand Managed Hotspots
• Wi-Fi roaming services
• Location-aware services
• Big Data Analytics
• Carrier VoWi-Fi
Emerging Business Models
Here are a few of the many emerging business models that will command significant investment over the next few years:
• Internet of Things
• Connected Automotive Vehicles
• Wi-Fi Multicast and Broadcast
• Smart Cities
• Personalized Promotions and Service Bundles
• Quad Play Supported by Wi-Fi
• Full Wi-Fi/Mobile Integration
The drive towards carrier-grade Wi-Fi fuels the need to invest in and build a carrier-grade infrastructure. This infrastructure must be capable of supporting the emerging business models and related services. Additionally, there is an ongoing convergence of Wi-Fi and other networks as well as the growing importance of wireless capabilities to network operators.
Rising to meet this need is a host of new entrants into the Wi-Fi market. These companies are staking their claim as network builders, wholesale customers, and service providers. Just like the early days of Wi-Fi, operators will need to work together through wholesale and roaming deals to fill out their networks as they engage in new business models.
Within the dynamic Wi-Fi ecosystem, there exists many opportunities for revenue growth as technology advances and new use cases emerge. To take advantage of these opportunities, providers must be creative as business models continue to expand from selling services directly to an end user into an intricate variety of routes to market.