We caught up with Dave Fraser, CEO of Devicescape, which markets a solution that promises to go further than Carrier Wi-Fi by accessing large numbers of public Amenity Wi-Fi hotspots in a highly controlled manner. I asked him why we haven't seen faster adoption of Wi-Fi by operators – it seems helpful to offload burgeoning data traffic.
"In my view, many mobile network operators don't yet have a classification for Wi-Fi services – there's no "bucket" or line of business that supports and champions it. We've seen plenty of head scratching and uncertainty about how mobile operators fit this in with their overall plans. It's this, rather than any specific technical issue, that has held the industry back.
Perhaps partly for this reason, those that have initiated their own Carrier Wi-Fi programmes have tended to approach it with a traditional network build out model. Given the number of access points required to provide desirable coverage levels this can be costly, laborious and slow.
Carrier Wi-Fi promises a higher quality, more seamless customer experience than some other forms of Wi-Fi, but will only just scratch the surface in terms of the number of hotspots available. I'd expect it to be used mainly in the most congested and/or strategically important locations.
So what happens outside of those locations?
There are many millions of freely available Wi-Fi access points in public venues around the world – something we term "Amenity Wi-Fi". Devicescape has developed a solution that curates these access points into a single, vast virtual network. Our solution locates these access points for the end user, connecting them automatically, ensuring a seamless, high quality experience.
Business owners like this because it reduces their IT burden while bringing customers to their networks where they can be engaged. We have curated over 20 million Wi-Fi hotspots to date, from a total monitored base of more than 315 million. We're on target to grow the curated network to 100 million by 2017 and it's clear that this is an infrastructure which is a natural complement to operators' cellular networks and carrier Wi-Fi deployments.
Our Curated Virtual Network (CVN) provides operators with what we call 'virtual carrier Wi-Fi' capabilities. Like carrier Wi-Fi, the CVN is monetizable, quality controlled, automatic to access, and allows detailed analytics on use. However, unlike carrier Wi-Fi, the CVN is existing, truly extensive and rapidly expanding.
We estimate, for instance, that in the average modern city environment the available, high quality, Wi-Fi hotspot capacity that would qualify for inclusion in our CVN currently outstrips total cellular capacity by a factor of 25. The investment required in operator owned infrastructure, of whatever variety, to match that capacity would be prohibitive, even for the tier one operators.
Virtual carrier Wi-Fi delivers service at a fraction of the cost of carrier Wi-Fi and yet provides even greater monetization opportunities, partly because the RoI threshold is so much lower. Carrier Wi-Fi and virtual carrier Wi-Fi are complementary and can be combined - carrier Wi-Fi for focused locations, and virtual carrier Wi-Fi for broad coverage.
But aren't those "Best Effort" Wi-Fi access points of highly variable quality?
Operators are naturally concerned with ensuring high quality of service, and are aware that Wi-Fi was originally designed on a best-effort basis. But an installed base of hundreds of millions of freely available hotspots around the world is a resource that can't be ignored.
The Devicescape solution actively manages the hotspots we monitor – rejecting those that don't meet capacity, availability and security requirements and incorporating into the CVN only those hotspots that meet the quality standard. This process is perpetual, so only the best connections available in the moment are included in the network.
It's also important to make the handover as seamless as possible, such that the user doesn't need to log in and enter passwords or accept terms and conditions (T&Cs) at each point of connection. Our solution manages this process, creating a carrier class service that can be relied upon.
In other words, it should "look and feel" like the existing cellular data service, just adding extra capacity to the network in a controlled manner.
Any visible signs of progress?
We already have over a dozen publicly referenced customers, including North American operators such as U.S. Cellular, as well as innovative newcomers like Republic Wireless and more recently ROK Mobile. Meanwhile we are expanding into Europe and earlier this year we announced a deal with Virgin Media in the UK.
Thanks to a wider shift in mind-set among mobile operators which is seeing them embrace carrier Wi-Fi, we're now moving into a period of rapid development. We are currently in trials with a number of tier one operators and we're in active discussions with many more, from the largest international players down to very targeted MVNOs.
The European operators have shown a lot of interest in the virtual carrier Wi-Fi concept and they are looking at new use cases for the CVN, particularly in relation to roaming. The CVN provides a more efficient alternative for operators looking to extend their reach internationally and improve the data experience for their roaming customers; in much the same way as it can enable operators to extend their networks capabilities domestically. The beauty of the CVN is that is already deployed and it can serve the specific needs of an operator immediately.
Operators of all sizes are now opening up to the benefits of an Always Best Connected approach to the user experience, which integrates Wi-Fi into the offering. We believe this is going to become commonplace.
How do your customers use the service – does it require active management?
Our operator customers typically preload the Devicescape client application onto the handsets they supply to their customers. For existing customers the app is also available as a download. Switching between cellular and Wi-Fi networks is then entirely automated. The process is simple and the end-user is blissfully unaware of the network management taking place behind the scenes.
As far as the customer is concerned they are able to straddle cellular and Wi-Fi connections without having to enter new passwords, navigate web pages or fiddle around with device settings. Instead they are automatically connected to the best possible network – 3G, 4G, or Wi-Fi – to suit their own, or the operator's preferences.
What's in it for the business owners?
We operate a two-sided business model. We are selling our services to the network operators but we also deliver value to the property managers and small business owners themselves.
For the business owners, I'd say the current mix is about 40/60 between the larger national chains (e.g. Barclay's Bank) and the huge number of small individual businesses (e.g. the local independent coffee shop).
The big chains have good reach but they're not everywhere, so the coverage and capacity they provide is boosted by the smaller outfits that form the growing long tail of Wi-Fi locations – any public areas from dentist waiting rooms to fast food retailers. We appeal to these businesses by simplifying customers' access to their Wi-Fi service, again removing all the hassle associated with agreeing to T&Cs or having to enter a password.
Additionally we provide a specific service to business owners called Popwifi. It's a proximity marketing tool that transforms Wi-Fi it into a two-way communication channel between the proprietors and their customers. They can customise the service with their own branding and they can use it to engage with customers via a social media platform. We even provide an analytics dashboard for business owners so that they can monitor customer feedback. The whole platform is integrated with the CVN.
Mobile operators aren't the only players looking at providing Wi-Fi connectivity to end users. Do you see competition intensifying?
One of the most interesting developments recently has been the emergence of the Wi-Fi first operators. They're buying wholesale cellular access and using it as a supplement to Wi-Fi as the primary means of connection. And then obviously we hear a lot about big internet players being keen to encourage end users to spend more time online. Providing Wi-Fi connectivity is one means of achieving this goal that they seem to be looking at quite seriously.
It's not hard to see why. In one of our deployments average customer use of public Wi-Fi increased 11-fold in the month after our solution was deployed. That's a pretty dramatic uplift.
The important thing to remember is that this is what users want to do. They're naturally seeking out a wireless data experience that takes advantage of the best connection available to them. We believe that whichever players look to harness, control and refine that 'Always Best Connected' experience, improving it far beyond what is available to the end user in isolation, are going to be big winners.
It's for that reason that we believe all operators need to start thinking more imaginatively about how they can exploit what is already there. It's an 'everybody wins' solution. Operators expand reach and capacity cost effectively, customers get the best available data connection and venue owners have a means to directly engage and interact with their customers.
Amenity Wi-Fi and Small Cells: Competition or Complementary? (ThinkSmallCell Article)