A recent research report from Informa came up with a startling conclusion about just how little public Wi-Fi is used by smartphones today - they reckon something less than 2% in most countries. With many operators requesting (or mandating) that their small cells incorporate Wi-Fi, usage levels will need to change to justify the extra complexity and expense.
Crowdsourcing the data
By running a client app on 100,000's of smartphone handsets, Mobidia have been able to assemble a pretty comprehensive and wide ranging data sample of how data is consumed on smartphones today. Those using it's Manage My Data app to monitor and control their data usage contribute towards the anonymous aggregate statistics published. This data wouldn't be visible directly to cellular operators, because they wouldn't have sight of Wi-Fi traffic which doesn't transit their network.
There are some caveats to beware of though including:
- there may be some self-selection in the sample who install/use the app. Perhaps the less technology aware consumers might not know about or install the app.
- the app can only tell if a proxy has been used to logon to Wi-Fi, which is how most Service Provider Wi-Fi works today. It excludes/misclassifies connections which don't involve a service provider, such as at an independent coffee shop/bar/hotel who offer free access. It also excludes the new EAP-SIM automatic authentication schemes being introduced for seamless access.
- Some markets, China Mobile in particular, have had unusually high investment in public Wi-Fi. China Mobile users are constrained by the unusual 3G technology deployed there, which is incompatible with today's iPhones, and this has probably skewed Wi-Fi takeup.
- 85% of more of smartphone users using the App, used Wi-Fi. Japan and India had a lower uptake of 60-70%.
- Public Wi-Fi constitutes a tiny sliver of Smartphone data today, less than 2%
- Private Wi-Fi and 3G cellular make up around 50% each
- Public Wi-Fi pricing can be as low as 84x cheaper per Mbyte than cellular, making it uneconomic
- While about 50% of the data that makes its way to (and from) your smartphone today does travel over Wi-Fi, the vast majority of that is through trusted private Wi-Fi connections at home or in the office.
AT&T reported some 1.2 billion connections made during 2011, but when distributed across their 100 million customers and divided throughout the year, that only works out at 1 connection per customer per month. The actual figure is lower because these numbers include connections from non-AT&T mobile customers too.
Boingo reported an average of 6.3 connections per month from its 292,000 subscribers.
I'd estimate that data connections to the cellular network already amount to several per day per smartphone, 100x or more than public Wi-Fi.
Subjectively, my own experience and usage pattern backs that up.
Wi-Fi data is priced much cheaper than cellular
An analysis of China Mobile's pricing per Megabyte for cellular vs public Wi-Fi came up with a staggering 84x lower price per Mbyte for Wi-Fi. Arguably China Mobile figures are skewed by the unusual 3G standard which is currently incompatible with the iPhone. Elsewhere, bundled public Wi-Fi access with landline broadband internet service can make these services very attractive for users.
Where aggregators offer monthly subscription services, it seems that these aren't fully utilised. Perhaps the convenience of being able to connect when travelling offsets the comparatively high cost per Mbyte data consumed.
The introduction of HotSpot 2.0, with automatic detection and seamless sign-on of Wi-Fi hotspots should make a dramatic change to this picture. Secure, simple and speedy service will be more widely available. Once customers become convinced that their smartphone battery life isn't affected too much, then more will enable this option by default.
Implications for small cells
I'm still less convinced about the quality of Wi-Fi when moving around or in an outdoor environment due to the low RF power/short range used. But when stationary, sitting down consuming data, then Wi-Fi certainly has a role to play. Free spectrum, interoperability and the low cost from mass market deployment are all attractive.
So I would expect to see Wi-Fi being adopted for indoor small cells, especially enterprise and in public spaces, but perhaps less so for outdoor use.
This is an interesting and stimulating 12 page paper which I recommend reading. It contains a good set of data broken down by country/region, with corroborating facts and figures.
There is likely to be considerable takeup of public Wi-Fi over the next year or two from recent Wi-Fi standards such as HotSpot 2.0 which will change the shape of the data distribution substantially.
Operating a standalone public Wi-Fi service is financially challenging, because they get relatively little use and can charge much lower prices than wide area cellular networks.
Combining both radio technologies in the same box allows networks to add considerable capacity at minimal cost, changing the economics and accessibility of public Wi-Fi.
The February 2013 white paper is available for free download if you divulge your email address and personal details here.
If you want to compare data from a year ago, the older 2012 version is available for free download (no registration required) directly from Informa's website here