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International Wi-Fi roaming - Winning Strategies to Construct Wi-Fi/Cellular Data-Roaming Offers for Retail Subscribers
 

International Wi-Fi roaming - Winning Strategies to Construct Wi-Fi/Cellular Data-Roaming Offers for Retail Subscribers

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International Wi-Fi usage and demand has grown tremendously. Carrier Service Providers have a huge opportunity to offer international Wi-Fi data roaming to subscribers. This paper gives some clear ...

International Wi-Fi usage and demand has grown tremendously. Carrier Service Providers have a huge opportunity to offer international Wi-Fi data roaming to subscribers. This paper gives some clear strategies that CSPs can follow along with the supporting trends.

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    International Wi-Fi roaming - Winning Strategies to Construct Wi-Fi/Cellular Data-Roaming Offers for Retail Subscribers International Wi-Fi roaming - Winning Strategies to Construct Wi-Fi/Cellular Data-Roaming Offers for Retail Subscribers Document Transcript

    • Sponsored byInternational Wi-Fi RoamingWinning Strategies to Construct Wi-Fi/CellularData-Roaming Offers for Retail Subscribers
    • 2© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comWhat is international Wi-Fi roaming?...........................................................................................................3How do strategies to enter the international-Wi-Fi-roaming market differ?..............................................3Why are CSPs exploring a partnership-based strategy to improve their positionsin international Wi-Fi roaming?....................................................................................................................4What types of players are seeking to partner with CSPs to bring theirinternational-Wi-Fi-roaming services to market?.......................................................................................5What are the key considerations for operators seeking to build a Wi-Fi roaming strategy?......................6Why has the industry witnessed an increased interest in international Wi-Fi roamingin recent quarters? ......................................................................................................................................7Why is international Wi-Fi roaming such a ripe opportunity for CSPs?.......................................................9How can operators create business value from international Wi-Fi roaming?.........................................11What are the most important end-user insights that can help CSPs build attractiveWi-Fi-centric roaming propositions and exploit the opportunities to create business value?..................12Density of premium public Wi-Fi infrastructure........................................................................................16Which CSPs have already launched international Wi-Fi retail propositions, and what lessonscan be learned from first-movers?.............................................................................................................17Concluding remarks and recommendations for CSPs...............................................................................21© Informa UK Limited 2013. All rights reserved.The contents of this publication are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Limited, our affiliates or other thirdparty licensors. All product and company names and logos contained within or appearing on this publication are the trade marks, service marks or trading names of their respective owners, including Informa UKLimited. This publication may not be:-(a) copied or reproduced; or(b) lent, resold, hired out or otherwise circulated in any way or form without the prior permission of Informa UK Limited.Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither Informa UK Limited nor any person engaged oremployed by Informa UK Limited accepts any liability for any errors, omissions or other inaccuracies.Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content.Any views and/or opinions expressed in this publication by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa UKLimited.Contents
    • 3© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comWhat is internationalWi-Fi roaming?International Wi-Fi roaming refersto a service that extends Wi-Ficonnectivity to users who travel tolocations outside their domesticservices footprint and wish to useWi-Fi hotspots as if at home.Operators that are pursuing anactive international-Wi-Fi-roamingstrategy aim to enable access to asbroad a footprint of Wi-Fi hotspotsin as many foreign locations aspossible in a simple and easy-to-usemanner, to ensure a positive userexperience for customers.International Wi-Fi roaming is nota new concept, and frameworksdesigned to facilitate such a servicehave been in existence since thefirst phase of public Wi-Fi growth.Efforts to standardize international-Wi-Fi-roaming agreements wereaccelerated by the establishmentof the Wireless Broadband Alliancein 2003, and the first commercialWi-Fi agreement between membercompanies of the WBA followed asearly as 2004.But the commercial success ofroaming propositions built onintercarrier agreements usingtechnical frameworks such as WISPrand, more recently, WISPr 2.0 hasbeen limited when measured interms of end-user adoption and theoverall scale of income generatedrelative to the unquestionablemarket potential of internationalWi-Fi roaming.A large number of factors havehampered the development ofinternational Wi-Fi roaming,including a general lack of customerawareness, surprisingly high costsfor customers, the slow and limitedexpansion of roaming footprints and– most of all – the substandard userexperience that has faced customerswishing to roam onto Wi-Fi hotspotswhen traveling internationally.Until recently, it has been far toodifficult, confusing and frustratingfor customers to discover andsuccessfully connect to hotspots viaa roaming service provided by theirdomestic communications-serviceproviders (CSPs).The sluggish progress madeby established Wi-Fi-networkoperators in striking roamingagreements opened the door forthe emergence of Wi-Fi roaminghubs and aggregators, such asiPass, Trustive and Boingo. Thesecompanies have invested significantamounts of time and resourcesto stitch together large numbersof Wi-Fi networks to build globalhotspot footprints that far exceedthe scale of roaming footprintsreliant exclusively on bilateralintercarrier agreements.How do strategies toenter the international-Wi-Fi roaming marketdiffer?The main focus of Wi-Fi-network operators in terms ofinternational Wi-Fi roaming isto develop intercarrier roamingacross premium public Wi-Fihotspot footprints, an activitythat falls under the umbrella ofthe initiatives managed by theWireless Broadband Alliance(WBA), an industry association setup to promote the development ofpublic Wi-Fi on networks ownedby operators. The expandedmembership of the WBA and thehuge increase in its addressablefootprint of hotspots, to more than5 million worldwide as of April2013, has undoubtedly contributedto the encouraging momentumbehind such activities.The activities of the WirelessBroadband Alliance are focused onremoving the technical barriers tointernational Wi-Fi roaming. A jointtask force announced in March 2012marked an important partnershipbetween the WBA and the GSMA,with the aim of developing technicaland commercial frameworks forWi-Fi roaming and setting thefoundation for greater interworkingbetween cellular and Wi-Firoaming. In February 2013, theWBA publicized the successfulcompletion of network assessmentsby several of the world’s leadingWi-Fi operators as part of itsInteroperability ComplianceProgram (ICP), an initiative aiming tostreamline the common frameworksused to underpin Wi-Fi roamingamong WBA member companiesmore efficiently and consistently.The Wi-Fi-network-operatorcommunity is supportive ofbuilding an ecosystem on the basisof ICP-compliant networks andintercarrier roaming agreementsthrough the WBA, but this shouldUntil recently, it has been far too difficult, confusing andfrustrating for customers to discover and successfullyconnect to hotspots via a roaming service provided by theirdomestic CSP.”“
    • 4© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comnot mask concerns that have beenpublicly voiced by some aboutthe expected commercializationtimeline of Wi-Fi roamingpropositions reliant on thedeployment of infrastructure anddevices compliant with the Next-Generation Hotspot and Passpointprograms. Many operators havealready commenced the rolloutof NGH-compliant equipment intheir networks, and many moreare committed to doing so in thenext two to three years; however,the complete changeover andmodernization of networks willtake considerable time for all butthe most aggressive and heavilyspending operators.So the speed at which next-generation hotspots are rolledout, together with the uncertainavailability and rate of adoptionof Passpoint-capable devices byusers, will undoubtedly limit theoverall reach, addressable marketand consistency of experience ofsuch roaming propositions in theshort and medium term, in spiteof all industry efforts to acceleratemomentum.This time-to-market challenge isleading some players to examinealternative options that can bridgethis gap and enable them tosuccessfully capture and monetizethe opportunity that exists for Wi-Firoaming.Looking beyond the traditionalWi-Fi roaming model of building aglobal footprint through individualbilateral agreements betweenWi-Fi network operators, a numberof alternative approaches haveemerged to enable Wi-Fi roamingand to meet the demand ofinternational travelers for Wi-Ficonnectivity, including hubbing andcrowdsourcing.Arguably, the most significantmoves around internationalWi-Fi roaming have been theestablishment of a numberof interesting commercialpartnerships (see fig. 1)between CSPs and global Wi-Fiaggregators, such as iPass,Boingo and Devicescape, for thepurpose of targeting the marketfor outbound internationalWi-Fi roaming services. Suchagreements differ from the moretraditional bilateral roamingagreements that Wi-Fi aggregatorsmight have signed with nationalWi-Fi-network operators that werelimited to facilitating roamingacross each other’s footprints asopposed to any joint service orproposition development.Why are CSPs exploringa partnership-basedstrategy to improve theirpositions in internationalWi-Fi roaming?This considerable momentumbehind partnership-basedapproaches to international Wi-Firoaming for CSPs can be attributedto two key market drivers: a desireto accelerate the time-to-marketof international-Wi-Fi-roamingservices, and a desire to leveragethe knowledge about best practicelearned by Wi-Fi-roaming-serviceproviders.1. Accelerate the availability ofattractive international-Wi-Fi-roaming servicesThose operators that can bringdifferentiated Wi-Fi roamingpropositions to market early canexploit first-mover advantage tocapture the demand that existsamong international travelers foran improved roaming experience.By partnering with third parties,operators can both accelerate theavailability of new propositions andavoid the hefty investment inherentin a do-it-yourself approach.Fig. 1. Selected outbound international Wi-Fi-roaming-partnership announcements, Apr-13Country Operator Partner Date announcedChina China Telecom iPass Feb-11South Korea SK Telecom iPass May-11Brazil Oi iPass Apr-12Japan KDDI iPass Jun-12France Bouygues Devicescape Jun-12Thailand DTAC Deutsche Telekom Jun-12Kuwait Zain iPass Sep-12South Africa AlwaysOn iPass Sep-12UAE Etisalat iPass Oct-12Japan NTT DoCoMo Boingo Dec-12Saudi Arabia STC iPass Feb-13US AT&T Boingo Apr-13Singapore M1 iPass Apr-13Note: This list refers only to announcements covering partnerships for the specific purpose of outbound international Wi-Firoaming. It might exclude partnership agreements established to enhance domestic Wi-Fi roaming.Source: Informa Telecoms & Media
    • 5© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com2. Leverage the best practicelearned from existing partnershipsBy leveraging the best practice thatthird parties have learned from theirexisting partnerships, operators canmitigate the risk of making costlymistakes and improve the likelihoodof building propositions with provenmarket potential. The supportoffered to operators by aggregatorsin areas such as applicationdevelopment, marketing strategyand proposition building form a keypart of the value of a partnership-based strategy in international Wi-Firoaming and are important reasonswhy more and more partnershipdeals are being struck.What types of playersare seeking to partnerwith CSPs to bring theirinternational-Wi-Fi-roaming services tomarket?There are three types of potentialpartners for operators seekingto accelerate the time-to-marketof international-Wi-Fi-roamingpropositions built on the servicesoffered by third-party players:1. Premium public-Wi-Fi aggregators:Players in this category effectively actas roaming hubs that offer partnercustomers access to extensive globalfootprints of premium public Wi-Fihotspots that have been painstakinglyaggregated through dedicatedcommercial roaming agreements withsignificant numbers of local Wi-Fi-network operators. iPass is the largestof these players, with a global footprintin excess of 1.2 million hotspots, andBoingo (600,000) and Trustive (500,000)have also aggregated large networks.2. Community residential Wi-Fiaggregators: Players in thiscategory have built global networksof hotspots by enabling users to pooltheir privately owned residentialhotspots into a global communitynetwork that can be accessed byany other member of the communityservice. Fon is the largest – andonly global – player in this segmentand has built a network of 8 millionresidential hotspots, and domesticnetworks have been created bylocal CSP such as Ziggo in theNetherlands and Free in France.3. Crowdsourced long-tail publicWi-Fi: Players in this categoryhave built large global networks ofhotspots by crowdsourcing free andpublicly accessible hotspots into asingle network. Such networks aretypically curated in order to excludehotspots that are not open to usersor that suffer from a compromiseduser experience. There is typicallyno contractual relationship betweenthe hotspot owner and the serviceaggregator. Devicescape is thelargest player in this market andhas a curated network that exceeds12 million hotspots worldwide.Although all three approaches offer away to deliver an international Wi-Firoaming service to customers ofCSPs, not all Wi-Fi roaming servicesare created equal. If operators wishto make the best-fitting partnerchoice, it is critical for them todevelop a clear understanding ofthe major differences that existbetween each of the three types ofplayers that offer solutions for Wi-Firoaming and to ensure that the valueproposition of the player they chooseis aligned to the intended corporateobjectives of a roaming strategy thatleverages Wi-Fi.The footprints of players targetingthe Wi-Fi roaming market vary infive key ways:1. Footprint-aggregation model:The approaches adopted bydifferent players in Wi-Fi roamingvary according to the modelused to aggregate hotspots intoa single network. The classicapproach, as promoted by theWireless Broadband Alliance, isbased on bilateral agreementsnegotiated individually betweennetwork operators. The inherentcomplexity of adopting such anapproach created the marketopportunity for hubbing providersthat negotiate agreements withWi-Fi network operators thatcan then be leveraged by anyplayers connecting to the hub.More recently, crowdsourcingmodels have been adopted to poolboth long-tail public Wi-Fi andresidential Wi-Fi into huge globalnetworks.2. Types of hotspots: Mostapproaches are focused on buildinga global footprint of premium publicWi-Fi hotspots, typically thoseowned by incumbent CSPs or pure-play Wi-Fi-network operators, butothers have focused on aggregatinglong-tail public Wi-Fi hotspots orresidential hotspots.If operators wish to make the best-fitting partner choice, itis critical for them to develop a clear understanding of themajor differences that exist between each of the three types ofplayers that offer solutions for Wi-Fi roaming.”“
    • 6© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com3. Size of footprints: The size of thefootprint covered by Wi-Fi-roaming-service providers varies significantly.Long-tail public Wi-Fi hotspots havebeen aggregated into networksincorporating several millions ofhotspots, while smaller premiumpublic Wi-Fi aggregators havebuilt networks that number in thehundreds of thousands.4. Quality and consistency of end-user experience: Perhaps themost important factor to take intoaccount is quality and consistencyof end-user experience, especiallyin terms of network performance.Premium-public-Wi-Fi aggregatorsare typically better placed to be ableto ensure a solid and consistentexperience, given the fact thatsuch footprints are predominantlycomposed of managed, high-gradenetworks.5. Type of relationship with venueowner: Relationships betweenWi-Fi-roaming-service providersand the owners of hotspots thathave been pooled into a globalfootprint vary to a significantdegree. Whereas the aggregationof premium public Wi-Fi hotspots(e.g., iPass or Boingo) is based onformal contractual agreementsbetween underlying hotspot-venueowners and the roaming-serviceprovider, there might be no form ofagreement at all in crowdsourcedmodels, where hotspots might havebeen pooled without the knowledgeor consent of the hotspot owner. Theextent and nature of the agreementbetween the Wi-Fi-roaming-serviceprovider and the hotspot ownersis an important factor affectingthe way that hotspots can be used,the types of services that can beoffered across the hotspots and,more importantly, how they can bemonetized.Having built a detailed understandingof the basic characteristics ofdifferent Wi-Fi roaming services,operators must assess potentialpartners on the basis of a variety oftechnical, strategic and commercialfactors that will ultimately determinetheir ability to build and bring tomarket the right types of propositionsfor their target customers.What are the keyconsiderations foroperators seeking tobuild a Wi-Fi roamingstrategy?When building a partnership-basedstrategy to enter the international-Wi-Fi-roaming market, operatorsmust take into account a rangeof factors (see fig. 2) that affecta potential third-party partner’sapproach to Wi-Fi roaming. Thesecriteria span all aspects of theoverall development of a valueproposition, including businessmodel, time-to-market, servicedevelopment and investment.It is these criteria that will ultimatelydetermine the types of service thatoperators will be able to bring tomarket, how quickly they can do soand the potential to monetize andprofit from future offerings.Importantly, the differentapproaches to meeting theinternational-Wi-Fi-roaming needsof customers are not mutuallyexclusive. Operators should pursuemultiple options to meet theimmediate needs of users – andthey are actively doing so – but atthe same time, they should lay theFig. 2: Key selection criteria for CSPs when assessing approaches to internationalWi-Fi roamingCriteria Key considerationsFootprint size, qualityand relevanceWhat is the size of the hotspot footprint?What is its geographic reach?Is the footprint aligned to key travel destinations of the local customer base?Are the locations high-quality and are they aligned to the highest-demand venues?Business models What are the commercial terms of partnerships?How much flexibility exists to experiment with monetization models?Investment costs What upfront and ongoing costs are likely to be incurred?How do investment requirements compare to alternative solutions?Time to market How quickly can an attractive commercial proposition be launched?What are the timelines to deploy additional features and services?PropositiondevelopmentHow involved are partners in helping build commercial propositions?What technical support is available?Is any support available for marketing activity?Addressable market Is the solution limited to certain operating systems (e.g., Android or iOS)?Can the solution address all device types (e.g., Wi-Fi-only devices)?What is the overall geographic reach of the footprint?How large is the addressable market and how quickly will it grow over time?Platform capabilityand flexibilityCan the solution support different customer segments (e.g., enterprise)?Can the solution support multidevice propositions?How scalable is the platform?What authentication models are supported?What level of billing flexibility is available?User experience How consistent is the network experience (speed and capacity)?How simple are the steps to get connected?Customer support What level of support do partners offer to end-users?How scalable is the support in terms of volume or geographies?Branding Is the partner open to offering a white-label solution?Is the partner open to jointly branded solutions?Source: Informa Telecoms & Media
    • 7© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comfoundations for enhanced Wi-Firoaming capabilities in the future.Why has the industrywitnessed anacceleration of activityin international Wi-Firoaming in recentquarters?2012 witnessed an accelerationof activity in pushing forwardthe technical and commercialdevelopment of international Wi-Firoaming, and this momentum hascontinued in the first half of 2013.In fact, there is a palpable senseof urgency underpinning the rapidpace of change in international Wi-Firoaming that has been fueled by anumber of demand-side factors.These include robust growth ininternational travel, evolving userdependency on Wi-Fi and a desire toexploit international Wi-Fi roamingto build new revenue streams inparallel to existing cellular data-roaming propositions.Several important market drivershave served to accelerate this trendglobally:International travel is recordinghealthy growth globallyAccording to the United NationsWorld Tourism Organization,international tourist arrivalsexceeded 1 billion for the first timein 2012, equating to 3.8% year-on-year growth from 2011. Thevolume of international tourismis set for robust growth again thisyear, with the UNWTO forecastingan increase of 3-4% in 2013. Sinceeach international trip representsa potential roaming event, theaddressable market for internationalAndroid iOSAndroid iOS1.3x 1.2x1.9x 2.8xAndroid iOS1.6x 4.2xAndroid iOS3.2x 6.8xAndroid iOS3.9x 5.8xAndroid iOS4.5x 10.0x2.6GB (44%)1.5GB (35%) 1.2GB (26%)2.5GB (46%)1.3GB (38%) 0.7GB (19%)0.6GB (24%) 0.5GB (13%)0.3GB (21%)0.4GB (18%) 0.4GB (9%)0.5GB (15%)2.8GB (65%) 3.3GB (74%)2.9GB (54%)3.3GB (56%)2.0GB (62%) 3.0GB (81%)1.9GB (76%) 3.2GB (87%)1.3GB (79%)1.8GB (82%) 3.9GB (91%)2.9GB (85%)SingaporeHong KongUSUKSpainGermanyCellularWi-Fi Wi-Fi – cellular ratioFig. 3: Smartphone-originated data-traffic distribution by OS, selected countries, May-12 (MBper month)Source: Mobidia
    • 8© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comWi-Fi roaming has never beengreater.Huge global investment in andexpansion of Wi-Fi networksoperated by CSPsAn investment boom is drivingthe rapid expansion of domesticWi-Fi networks around the globe.Given the high levels of capitalbeing spent, operators are eager toexplore any new business models,such as outbound and inboundinternational Wi-Fi-networkroaming that can enable more-effective monetization of theirinvestments.Wi-Fi is now established as theprimary form of connectivityto smartphones and otherconnected devicesThe importance of Wi-Fi tothe everyday smartphone userexperience is now beyond question.Far from being a technologythat is used to back up cellularnetworks or “offload” duringperiods of congestion, Wi-Fi is nowfirmly established as the primarymeans of data connectivity for alarge and growing base of users.According to studies conductedby Informa Telecoms & Media inpartnership with Mobidia, Wi-Fitypically accounts for between65% and 85% of total smartphone-originated data traffic, dependingon the model of smartphone andthe user’s country of residence(see fig. 3).As the adoption of smartphonescontinues to rise within marketsand customer segments globally,so does consumer and enterprisedependence on Wi-Fi. And it isbecoming increasingly clear thatthese users are coming to expecttheir in-home or in-office Wi-Fiexperience to be replicated whereverthey go and at every point in theirday-to-day life, both domestically andwhen traveling internationally.There are a number of reasonsfor operators to adopt Wi-Fi aspart of their international roamingstrategy, but three stand above allothers:1. Attract, retain and increasewallet share in high-value customersegmentThe quality of experience enjoyedby customers is emerging as akey battleground for domesticcompetition among CSPs. Sincecustomer experience has becomea key differentiator in terms of bothattracting and retaining customers,operators simply cannot afford torisk the customer dissatisfactionand negative media coveragegenerated by “bill shock” horrorstories. Operators are eager toaddress this issue by bringingto market solutions that offerconsumers both an enhancedexperience and, importantly, peaceof mind to consume data withoutfear of incurring unexpected bills.The clear preference of internationaltravelers has been to meet theirconnectivity needs by finding andchoosing their own Wi-Fi hotspotsin visited locations, ensuring thatCSPs lose out almost entirely on anyWi-Fi-related expenditure overseas.The provision of more-attractiveinternational Wi-Fi roaming servicesis therefore an opportunity torecapture wallet share and, moreimportantly, to capture a slice ofindoor usage and spend.2. Monetize the opportunity aroundWi-Fi-only devices"There has been rapid growth in theadoption and usage of Wi-Fi-onlydevices (such as tablets) amonginternational travelers. Accordingto Informa Telecoms & Mediaforecasts, more than 162 milliontablets will be shipped in 2013, ofwhich around three-quarters (74%)are expected to ship with Wi-Fi asthe only form of connectivity (seefig. 4). The emergence of cheap,Android-based tablets has servedto increase the proportion of tabletsthat are solely reliant on Wi-Fi forconnectivity, as has the uptick in thecost of adding cellular connectivitydue to the emergence of LTE.This market is currently a majormissed opportunity for operators,Wi-Fi and cellular25.7%Wi-Fi-only74.3%Fig. 4: Global, tablet shipments byconnectivity type, 2013Note: 1,517 respondents.Source: Informa Telecoms & MediaAnd it is becoming increasingly clear that these usersare coming to expect their in-home or in-office Wi-Fiexperience to be replicated wherever they go and atevery point in their day-to-day life, both domesticallyand when traveling internationally.”“
    • 9© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comsince they have not establishedan effective means to monetizeusage on Wi-Fi-only devices.The opportunity is especiallynotable because the emergence ofcommercially available technologyto authenticate users on Wi-Fi-onlydevices and enable usage to bemeasured, billed and charged by theoperators opens up the possibilityfor operators to capture a share ofspend for Wi-Fi-only devices and,given the size of this segment, opena potentially significant new lineof revenue. Operators should alsobe wary of the potential future costof not supporting these devicesif subscribers choose to seek outcompetitive offerings from playersthat are able to bundle all devicetypes, including Wi-Fi-only devices,onto a single roaming plan.3. Exploiting Wi-Fi to increase theprofitability of cellular data roamingThe bundling of Wi-Fi into anintegrated cellular/Wi-Fi data-roaming proposition providesoperators with an opportunity topursue a strategy to increase theprofitability of data roaming not onlyby stimulating incremental spendbut by reducing the cost of wholesalecellular data-roaming payments.Since every megabyte of cellulardata consumed when roaming incursa wholesale cost to the domesticCSP, the profitability of a roaminguser effectively falls when the userconsumes more data. If operatorsare able to maintain the level ofspend by users while finding ways toreduce their usage of their bundleddata allowance, there is a clearopportunity to increase profitabilityat the user level. This strategy isexplained in more detail later in thewhite paper.Why is internationalWi-Fi roaming sucha ripe opportunity forCSPs?iPass has conducted a detailedglobal survey into the data-roaming habits of more than 1,500international travelers, creatingan important source of insightinto the device-ownership trends,usage behavior and spendingpatterns of this important andhigh-value segment of users (seebox). The survey results informtwo key sections of this whitepaper: They are used to assessthe size of the opportunity opento CSPs of integrating Wi-Fi intotheir international-data-roamingstrategies, and to identify keyconsiderations for CSPs looking tobuild new and appealing roamingpropositions leveraging Wi-Fi.The survey data reveals threeimportant insights that serve toquantify the size of the international-Wi-Fi-roaming market andvalidate the fact that it is a genuineopportunity for CSPs.1. International travelers arealready heavily reliant on Wi-Fito connect a multitude of devices,including smartphones, tablets ande-readersNothing has played a greaterrole in stimulating the need to beconnected when traveling than therise in smartphone adoption and,in parallel, the growing penetrationof tablets and other much-valuedWi-Fi-enabled devices, such ase-readers. The more that userstravel with devices that are heavilydependent on Internet access, thegreater their need to access high-quality, affordable connectivity attheir destination.According to the iPass InternationalData Roaming Survey, 98% ofrespondents own at least onesmartphone (see fig. 5), and overone-third (33.8%) of respondentstravel with two or more. High levelsof smartphone adoption wererecorded across all geographies,including key emerging marketssuch as Brazil, India and China, butthis should not be a surprise giventhe undoubtedly strong correlationbetween international travelersand the highest-value customersegments.The fact that multiple-smartphoneownership is so common amonginternational travelers reinforcesthe point that international-Wi-Fi-roaming propositions should allowfor usage across multiple devices ifiPass International Data Roaming SurveyThe International Data Roaming Survey was conducted by iPass over afour-week period during February and March 2013 and received 1,787responses from 188 countries and territories, with the EU (38%) andthe US (33%) accounting for the largest proportions of respondents. Ofthe respondents, 1,517 were international travelers. The objective of thesurvey was to gather information on end-user behavior and preferencesrelated to the role of Wi-Fi when traveling internationally. The targetdemographic was smartphone and tablet users who travel internationally,whether for business or leisure. Readers should take into account thepotential bias of the sample base when interpreting the results of thesurvey. Further details about the sample demographic can be requestedfrom iPass.
    • 10© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comthey are to match the behavior of thetarget user segments. Clearly, theimportance of multiple-device supportgoes beyond enabling connectivityacross multiple smartphones andshould take into account the otherWi-Fi-enabled devices that are nowfrequently carried abroad by travelers.The rise of tablets as an importanttravel companion is underlined by thefindings of the survey, which revealedan average 89.7% penetration acrossthe total respondent base, andimpressively high figures in marketsas diverse as Israel (82.5%), France(70.8%) and Singapore (92.9%).Perhaps the most important pointwhen it comes to the tablet market,relates to the inbuilt connectivitycapabilities of these devices. Inspite of the clear value of wide-areacellular-network connectivity tousers who spend time on the road,the survey found that almost half(45.7%) of the tablets owned byinternational travelers support onlyWi-Fi (see fig. 6). This percentage isset to increase in the future, giventhe expected growth in shipmentsof Wi-Fi-only tablets in 2013,according to Informa’sforecasts.2. International travelers arealready spending large amounts onWi-Fi when abroadOperators consideringinternational-Wi-Fi-roamingstrategies should be encouragedby the opportunity to capturea share of their customers’existing spend on Wi-Fi duringinternational trips. It is apparentthat international travelers incursignificant connectivity expenses.According to the survey, almostone-third of respondents havespent US$50 or more for Wi-Fiaccess on a single overseas trip(see fig. 7). While there continuesto be a major shift toward free-to-end-user Wi-Fi, high prices forWi-Fi are still common in manylocations, especially in key venuessuch as hotels and airports.It is not surprising thatinternational travelers have, onoccasion, incurred significantone-off costs to obtain Wi-Fiaccess when overseas, but itis also clear that travelers areregularly spending significantamounts on Wi-Fi when traveling.The survey results stronglyvalidate the fact that there isentrenched user spending behavioron Wi-Fi that can be tapped byCSPs providers to create newrevenue streams. Just under70% of travelers will typicallyspend US$20 or more on anaverage international trip, andone in five spend US$50 or more.01020304050Dont knowWi-Fi, 3G and 4GWi-Fi and 3GWi-Fi-onlyRespondents(%)Fig. 6: Wireless-network connectivity of tablets owned by international travelersNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-13More than US$5016.5%US$5014.6%US$4010.2%US$3017.3%US$2020.7%US$1020.7%Fig. 7: What is the maximum amountyou’ve ever spent for Wi-Fi access over theduration of one international trip?Note: 1,517 respondents.Source: iPass International Data RoamingSurvey, Apr-130204060801003+210E-readersTabletsSmartphonesRespondents(%)Fig. 5: Number of portable devices owned by international travelers, by typeNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-13
    • 11© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comThe spread in spending levelsamong respondents indicatesan opportunity to build tieredofferings that enable operatorsto tap into the varying spendingbehavior of different customergroups.3. International travelers perceivehigh value in an international-Wi-Fi-roaming service, but most don’t yetsubscribe to oneWhen presented with the possibilityof an international-Wi-Fi-roamingservice, consumers accord it a veryhigh level of perceived value. Askedto assess the value of a service thatoffers unlimited access to a broadglobal network of Wi-Fi hotspots,six out of 10 survey respondentsperceived the proposition to beextremely valuable (see fig. 8),with just a tiny proportion (3.6%)questioning the potential value.Users who did not attach value to aninternational-Wi-Fi-roaming servicecited a preference to find Wi-Fithemselves, the broad availability offree Wi-Fi and the option to buy localSIM cards as key reasons.In spite of the high perceivedvalue of such services, only asmall proportion of respondents(31.7%) were found to have alreadysubscribed to an international-Wi-Fi-roaming service (see fig.9). Given the potential bias inthe sample set, the size of theuntapped market is likely to beeven greater. In all, it is clear thatnot only is there a strong interestin the value of an international-Wi-Fi-roaming service, but usersare already incurring considerablecosts to obtain Wi-Fi accessabroad. Taken together, it adds upto a market opportunity that is ripeand ready to be disrupted by newpropositions.How can operatorscreate business valuefrom international Wi-Firoaming?Although the survey has shownthat opportunities definitely existfor CSPs in tapping into customers’usage of and spend on Wi-Fi whentraveling internationally, operatorsmust think carefully about how toensure that a Wi-Fi roaming servicewill create value.There are six key ways thatoperators can create business valuefrom international Wi-Fi roaming,through direct monetization, indirectmonetization and cost-reductionstrategies.1. Interoperator-tariff cost reductionIf the wholesale cost of Wi-Fi databought from roaming partnersvia interoperator tariffs (IOTs) islower than the equivalent cost ofwholesale cellular data, operatorscan reduce their IOT costs bycreating integrated cellular/Wi-Fidata bundles at a similar price tostand-alone cellular data-roamingoptions and boost profitability at theuser level by exploiting the fact thatusers prefer to consume (lower-cost) Wi-Fi data before using (moreexpensive) cellular data.2. Drive sales of high-valueintegrated cellular/Wi-Fi roamingbolt-onsThe bundling of an inclusive amountof Wi-Fi data in an integratedcellular/Wi-Fi data-roamingproposition adds perceived valueto such packages. If such bundledpropositions are priced higher thanstand-alone cellular data-roamingoptions, operators can use Wi-Fias a value-added service to upsellcustomers to more-expensive plans.3. Capture wallet share from Wi-Fi-only devicesOperators typically generate zeroincremental revenue when theirsubscribers use Wi-Fi-only deviceswhen traveling overseas, given thetendency of users to search out andspend on locally provided hotspots.This equates to a major missedmonetizable opportunity. By creatingpropositions for their customers thatcan be used across both cellular-connected and Wi-Fi-only devices,operators have a major opportunity tocapture wallet share from a previouslyclosed-off market segment.Not valuable3.6%Somewhatvaluable37.2%Extremelyvaluable59.2%Fig. 8: How valuable would an internationalWi-Fi roaming service be to you?Note: 1,517 respondents.Source: iPass International Data RoamingSurvey, Apr-13Don’t know10.7%No57.6%Yes31.7%Fig. 9: Do you currently subscribe to aninternational Wi-Fi roaming service?Note: 1,517 respondents.Source: iPass International Data RoamingSurvey, Apr-13
    • 12© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com4. Improve roaming-centriccustomer experienceOperators are battling years ofentrenched negative perception ofthe cost and general experience ofcellular data roaming. “Bill shock”caused by the high cost of cellulardata roaming is a major sourceof customer dissatisfaction and,consequently, churn. AffordableWi-Fi roaming options can givecustomers peace of mind whentraveling and help prevent bill shock,greatly improving the customerexperience.5. Drive customer acquisitionthrough service differentiationOperators that capture first-mover advantage can claim aposition as an innovation leaderand use it to differentiate theirservice propositions from those ofcompetitors. In highly competitivedomestic markets, any possibilityto create genuinely differentpropositions can be an effective toolto drive customer acquisition.6. Generate incremental roamingrevenue via Wi-Fi access feesOperators can generate stand-alone revenue streams forinternational Wi-Fi roaming bytapping into user willingness tospend on Wi-Fi when travelingoverseas and charging one-offor recurring fees for access toan aggregated global footprint ofWi-Fi hotspots.To be able to capitalize on theopportunities for value creation thatare emerging in international Wi-Firoaming, operators need to ensurethat services are constructedappropriately to meet any updatedcorporate strategic objectivesand the specific needs of userswho have already started to buildestablished patterns of usage whentraveling abroad with their smartdevices in tow.What are the mostimportant end-userinsights that can helpCSPs build attractiveWi-Fi-centric roamingpropositions and exploitthe opportunities tocreate business value?Based on an in-depth analysisof both actual and intended end-user behaviors and their relatedpurchasing patterns and intentions,it is possible to identify five keysuccess factors for CSPs hoping tobuild successful international-Wi-Fi-roaming propositions.1. Segment propositions to ensurethat tariff structures and pricingmodels are aligned with variationsin user behavior and willingness tospendDeveloping, trialing andcommercializing a singleproposition is an understandablyattractive first move, but in thelonger term, a one-size-fits-allapproach is unlikely to capturethe full potential of the Wi-Firoaming opportunity. Operatorsshould therefore think early onabout segmenting their portfolio tobetter align tariff structures withvariations in buying preferences,user behavior and, moreimportantly, user willingness tospend and perceived value.An important choice that operatorsshould consider offering theircustomers is a range of pay-as-you-go and subscription models. Pay-as-you-go propositions typically takethe form of daily or weekly passes,and subscriptions are usually addedto monthly bills on a recurring,ongoing basis, either with or withouta fixed-term contract.When asked to express apreference between the twomodels, survey respondentsshowed a clear preference for thegreater flexibility offered by pay-as-you-go models, with 63.6% optingfor such a service (see fig. 10). Butthere is also clearly a market forsubscriptions, especially amongregular travelers. Fifty-five percentof users who travel frequently (10or more times a year) would preferto add a monthly Wi-Fi roamingservice to their existing cellularsubscription.As operators go about building andsegmenting a portfolio, they shouldalso pay consideration to the structureI would buy it as a stand-aloneoffer when I needed it, similar tobuying a prepaid card63.60%I would add it to my monthly mobiledata plan if my CSP offered it36.40%Fig. 10: Purchasing preferences of international travelers between pay-as-you-go andsubscription modelsNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-13
    • 13© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comof different models, in particular thelengths of pay-as-you-go passesoffered to customers. Daily andweekly cellular-data-roaming passesare increasingly emerging as serviceofferings for customers, and thesurvey provides evidence to validatethe underlying assumptions of suchservice launches. When respondentswere asked to state their preferenceamong a range of daily, weekly andmonthly propositions, weekly was themost popular option (see fig. 11). Thefact that users tend to favor a weeklypass is not surprising, given thatinternational trips most frequentlylast a business week or longer (seefig. 12).These responses underline users’willingness to commit to a contractwith a regular spending commitmentover 12 or 24 months. The surveyindicated a strong market opportunityfor affordably priced contract options,with respondents effectively equallysplit in terms of their preferencebetween plans that include arecurring contractual commitmentand those that do not. The appeal ofa recurring spending commitment ata much lower rate than more-flexiblepay-as-you-go passes is far greateramong frequent travelers: Two-thirds(66.8%) of respondents who travel 10or more times a year would committo a contract plan, compared withjust 38.5% of infrequent travelers(1-2 trips per year).An additional consideration shouldbe whether to offer unlimited Wi-Fito customers or apply volume- ortime-based caps to Wi-Fi dataquotas. Although unlimited offeringsare undoubtedly more appealingto customers and can underpinattention-grabbing marketingmessages, it is questionable whetherthis approach will maximize theprofitability of a Wi-Fi roamingproposition, especially whereoperators are exposed to wholesaleWi-Fi data costs based on eithervolume or time. Building on theimportance of effective segmentationof offers, operators should considertiering inclusive Wi-Fi data volumesbased on spending commitments andperhaps reserve unlimited Wi-Fi foronly the highest-value options. Suchan approach not only circumvents thepotential value dilution of a one-size-fits-all approach to inclusive Wi-Fivolumes, but could be used to upsellcustomers to high-value packages.2. Integrate Wi-Fi allowances intocellular-data-roaming propositionsto capture the perceived value ofWi-Fi among international travelersOperators should strongly considercreating bundled propositions totake advantage of the perceivedvalue of Wi-Fi among travelers.Presented with a range of data-roaming propositions that includeboth stand-alone cellular data andintegrated cellular/Wi-Fi bundles,users show a clear preference forintegrated packages (see fig. 13).What is more, when packages werepresented without any associatedpricing, respondents expressed aclear preference for a larger amountof inclusive data – a clear sign thatthere is underlying demand fortariff plans that permit considerableconsumption when overseas.There is also strong evidence thatusers not only value the inclusionof Wi-Fi in an integrated roamingbundle but are prepared to pay apremium to acquire such a service.According to the survey, almost40% of international travelers wouldbe prepared to pay a premiumof 10% or more for a bundle that020406080100Users taking 10 or moretrips per yearAverage(all users)Users taking 1-2 tripsper yearRespondents(%)US$n a month for unlimited access on a 24-month contractUS$n x 2 a month for unlimited access on a 12-month contractUS$n x 4 for 1 week (7 consecutive days) of unlimited access, no contractUS$n x 2 for 1 day (24 consecutive hours) of unlimited access, no contractFig. 11: Purchasing preferences among international travelers for different Wi-Fi roaming plansNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-1310 or more days20.4%6-10 days31.4%3-5 days42.3%1-2 days5.9%Fig. 12: Typical duration of travelers’international tripsNote: 1,517 respondents.Source: iPass International Data RoamingSurvey, Apr-13
    • 14© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comincluded a limited volume of Wi-Fidata in addition to the cellular-dataallowance (see fig. 14).People are clearly willing to spend onWi-Fi when roaming, albeit to varyingdegrees, a fact that is underlinedby respondents’ opinions about themaximum they would be prepared topay for Wi-Fi access during a typicalinternational trip. Almost one-thirdof travelers (32%) are prepared tospend a maximum of US$10 per trip,and four in 10 (39.3%) are preparedto commit to US$40 or more, withjust over 15% willing to spend aboveUS$50 (see fig. 15).The survey results also quantifiedthe variations in price sensitivityamong business and leisuretravelers, with those roaming forbusiness reasons demonstratinga greater willingness to spendlarger amounts for Wi-Fi accessthan those traveling exclusively forleisure purposes.Unsurprisingly, when the set ofbundled data-roaming propositionsoutlined in fig. 13 is presented tousers with prices attached, thereis a clear shift in the purchasingintentions of survey respondents(see fig. 16). Although users mightprefer access to large bundles, theydemonstrate restraint in terms ofspending in order to manage costs.Nonetheless, the survey revealedthat a material number of usersare prepared to spend a significantsum on a larger bundle of inclusivecellular/Wi-Fi data.3. Use integrated bundles tounderpin an IOT-cost-reductionstrategy and increase theprofitability of cellular dataroamingWhen asked how they wouldconsume the inclusive data quotasof an integrated cellular/Wi-Firoaming service (e.g., a bundleincluding 300MB of cellular dataand 400MB of Wi-Fi), respondentsrevealed an overwhelmingpreference to use Wi-Fi firstwhenever it is available and toreserve inclusive cellular-dataquotas for occasions when Wi-Fiis not available (see fig. 17).Users’ preference to use Wi-Fi asthe primary form of connectivitywhenever possible is a strongvalidation of the potential to use020406080100More than US$50US$50US$40US$30US$20US$10Leisure-only tripAverageBusiness-only tripRespondents.(%)Fig. 15: Maximum likely spend for Wi-Fi access on a typical international tripNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-13Respondents (%)0 10 20 30 40 50800MB of 3G data plus1GB of Wi-Fi per month800MB of 3G dataper month300MB of 3G data plus400MB of Wi-Fi per month300MB of 3G dataper monthFig. 13: Preferences of international travelers for stand-alone cellular and integrated cellular/Wi-Fi data-roaming propositions, excluding pricesNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-130102030405060OtherWould pay20-30% moreWould pay10-20% moreWould pay5-10% moreRespondents(%)Fig. 14: Travelers’ willingness to spend a premium to acquire a data-roaming bundle thatincludes Wi-FiNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-13
    • 15© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comintegrated cellular/Wi-Fi bundles asa strategy of reducing costs linkedto IOTs, an important and emergingbusiness model for operatorsdeveloping advanced strategies forinternational data roaming.Since every megabyte of cellulardata consumed when roamingincurs a wholesale cost to thedomestic CSP, a roaming userbecomes less profitable the moredata is consumed. If operators areable to maintain the same level ofspend while finding ways to reduceuse of the inclusive data allowance,they have a clear opportunity toincrease profitability at the userlevel.It is important to note, however,that this is a strategy that is viableonly in cases where operators donot dilute incoming spend – throughmaintaining the same (or a higher)price for an integrated cellular/Wi-Fi bundle – and, most crucially,in cases where the wholesale cost ofWi-Fi roaming data is lower than thewholesale cost of cellular data.4. Maximize the addressablemarket by targeting the key deviceand platform types owned andused by international travelersA variety of solutions forinternational Wi-Fi roamingare dependent on smartphoneapplications for service delivery, butthese have typically been limitedto just two platforms: iOS andAndroid. Although these two are thedominant smartphone operatingsystems globally, operators andtheir third-party partners will needto carefully examine the growth ofcompeting platforms and assessthe optimum time to extend supportbeyond iOS and Android to maximizethe addressable market.But the ecosystem of Wi-Fi-enabled devices that are criticalto the day-to-day needs ofinternational travelers and,therefore, the opportunity foroperators is far greater than justsmartphones. Operators shouldexamine the potential that existsbeyond smartphones to monetizeWi-Fi usage on Wi-Fi-only devices,such as tablets. This shouldinclude building offers that enablecustomers to make use of Wi-Firoaming services across all of theirdevices, rather than tying themexclusively to a per-device basis.5. Develop a clear understandingof travel patterns to exploitopportunities in a targeted fashionAn analysis of data on travel routesreleased by the UN World TourismOrganization together with datathat can serve as a proxy for therelative availability of public Wi-Fiin different countries can be usedto identify opportunities to buildtargeted Wi-Fi roaming solutions.Specifically, the ripest opportunitiescan be identified by correlatingtravel routes that carry the largestvolume of international trips withcountries that have high deploymentof Wi-Fi (see fig. 18). In addition tohaving a critical mass of travelersand high availability of Wi-Fi atthe travel destination, building acompelling offering for a given travelroute relies on factors such as theI would have no preference for eitherWi-Fi or 3G access, and would connectto whatever was available.12.5%I would use my 3G quota first, anduse Wi-Fi as a backup if I go overmy 3G quota.5.0%When Wi-Fi is available, I woulduse Wi-Fi first and save my 3Gquota for when I’m in transit orwhen needed in locations whereWi-Fi isn’t available.82.5%Fig. 17: Likely behavior of international travelers subscribed to an integrated cellular/Wi-Fidata-roaming bundleNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-13Respondents (%)0 10 20 30 40 50 60 70US$n x 2 for 800MB of 3G dataplus 1GB of Wi-Fi per monthUS$n x 2 for 800MB of 3G dataper monthUS$n for 300MB of 3G dataplus 400MB of Wi-Fi per monthUS$n for 300MB of 3G dataper monthFig. 16: Preferences of international travelers for stand-alone cellular and integrated cellular/Wi-Fi data-roaming propositions, including pricesNote: 1,517 respondents.Source: iPass International Data Roaming Survey, Apr-13
    • 16© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comHigh Medium LowDensity of premium public Wi-Fi infrastructureFig. 18: The 100 highest-volume international travel routes, 2012Rank Country of origin Country of destination Number of trips1 Hong Kong China 79,357,7012 Macau China 23,690,7673 Canada US 21,337,0004 US Mexico 18,554,6165 China Hong Kong 13,599,7686 Mexico US 13,491,0007 Singapore Malaysia 13,372,6478 Germany France 11,648,1289 US Canada 11,595,36310 Germany Austria 10,929,67011 UK Spain 10,569,66112 Germany Italy 9,874,50913 Germany Spain 9,030,69714 Russia Ukraine 9,018,48715 UK France 8,932,52016 France Spain 8,498,43017 Italy France 7,986,94618 Netherlands France 6,496,71119 Switzerland France 5,666,83420 Spain France 5,467,37021 Taiwan China 5,263,01422 France Italy 4,982,87723 China Macau 4,703,66324 Germany Turkey 4,557,46025 South Korea China 4,185,39826 Moldova Ukraine 4,071,78527 Netherlands Germany 4,035,78328 Italy Spain 3,766,59729 Japan China 3,658,16930 France UK 3,633,00031 Russia Turkey 3,425,60832 US France 3,325,32433 Saudi Arabia Bahrain 3,320,18834 Japan South Korea 3,289,05135 Japan US 3,249,56936 Switzerland Italy 3,235,77337 Austria Italy 3,205,21438 UK US 3,137,42339 UK Ireland 3,090,22240 Germany Netherlands 2,978,00041 Netherlands UK 2,947,00042 US UK 2,846,00043 Netherlands Spain 2,776,05844 US Italy 2,714,58345 Spain Italy 2,610,37346 Indonesia Singapore 2,592,22247 US Puerto Rico 2,586,60048 Kuwait Saudi Arabia 2,578,54149 Ireland UK 2,574,00050 Russia China 2,536,321Sources: UNWTO and Informa Telecoms & MediaFig. 18: The 100 highest-volume international travel routes, 2012Rank Country of origin Country of destination Number of trips51 Malaysia Thailand 2,492,03452 UK Italy 2,333,40453 Switzerland Germany 2,301,48254 Germany Hungary 2,287,00055 Germany Greece 2,240,48156 UK Germany 2,227,59557 China South Korea 2,220,19658 US Germany 2,163,75959 Indonesia Malaysia 2,134,38160 US China 2,116,14461 Saudi Arabia Kuwait 2,063,81562 Germany Denmark 2,055,02563 Germany Switzerland 2,038,68064 UK Greece 1,934,45465 UK Portugal 1,925,25666 Netherlands Belgium 1,920,00367 UK Netherlands 1,864,00668 Iran Turkey 1,863,65569 Spain UK 1,836,00070 Russia Egypt 1,832,38871 Germany US 1,823,79772 Netherlands UK 1,788,00073 Portugal Spain 1,787,70574 Belgium Spain 1,779,07375 France Morocco 1,775,96176 Netherlands Italy 1,758,97877 Argentina Uruguay 1,723,00578 Poland Ukraine 1,720,10479 China Thailand 1,704,80080 Jordan Saudi Arabia 1,666,81481 China Taiwan 1,666,56282 Germany Croatia 1,661,34683 South Korea Japan 1,658,07384 Netherlands Austria 1,644,62085 Libya Tunisia 1,642,62086 Hong Kong/China Macau 1,632,01087 Argentina Brazil 1,593,77588 UK Turkey 1,592,73589 Thailand Laos 1,579,94190 China Singapore 1,577,52291 Canada Mexico 1,563,14692 Zimbabwe South Africa 1,553,00893 Italy Germany 1,538,36994 UAE Saudi Arabia 1,531,42995 Leosotho South Africa 1,526,59796 Italy UK 1,526,00097 Brazil US 1,508,27998 Spain Andorra 1,507,11199 Singapore Indonesia 1,505,588100 France US 1,504,182Sources: UNWTO and Informa Telecoms & Media
    • 17© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comfriendliness of the local operatorenvironment and the existenceof favorable economics for Wi-Firelative to cellular.Which CSPs havealready launchedinternational Wi-Fi retailpropositions, and whatlessons can be learnedfrom first-movers?The commercialization ofinternational-Wi-Fi-roamingpropositions by CSPs is still in anearly phase, but it is possible tobuild an initial understanding ofthe opportunities for operatorsby analyzing the in-marketpropositions of the first-movers(see fig. 19). Asia Pacific hasrecorded the highest level ofcommercial activity to date,and commercial propositionshave also been launched in theMiddle East (Zain, September2012), North America (AT&T,April 2013) and Brazil (Oi, April2012). All operators share thecommon strategic objective ofgenerating business value fromthe opportunities that exist in Wi-Firoaming, but the services thathave been brought to market varymarkedly in terms of structure,target segments, monetizationand the benefits marketed to end-users.In order to understand the lessonsin best practice, it is important toassess each of these elements toidentify the benefits of differentapproaches and business models.Target segmentsCompanies offering internationalWi-Fi roaming most frequently targetthe consumer postpaid segment,but it is clear that operators also seeopportunities to encourage prepaidusers to take up their services,especially in emerging markets. Theenterprise market is an obvious targetfor operators, given the service’s valueto international business travelers, butalthough some operators (e.g., M1 andPCCW) have focused on this segmentfrom the outset, others have not.Fig. 19: Selected commercially available international Wi-Fi roaming services launched by communications-service providers, Apr-13Country Operator Wi-FibrandingModel Inclusive data Fees Devices Primary targetsegment(s)NotesCellular Wi-FiUS AT&T Wi-FiInternationalIntegratedcellular/Wi-Fidata-roamingbolt-on300MB 1,024MB US$60 iOS, Android ConsumerAT&T Wi-FiInternationalIntegratedcellular/Wi-Fidata-roamingbolt-on800MB 1,024MB US$120 iOS, Android ConsumerSingapore M1 Wi-FiRoamingDaily pay-as-you-go passn/a Unlimited S$12 iOS, Android Consumer,enterpriseAsia Pacific, NorthAmerica, Latin America.Postpaid users only.M1 Wi-FiRoamingDaily pay-as-you-go passn/a Unlimited S$19 iOS, Android Consumer,enterpriseRest of the world.Postpaid users only.Kuwait Zain Zain Pass Monthly pass n/a Unlimited KD13 iOS, Android Enterprise Postpaid users only.Hong Kong PCCW Wi-FiRoamingPay-per-minute n/a n/a HK$1-2 iOS, Android Consumer,enterprisePer-minute price variesfrom HK$1-2 dependent ondestination country.Japan KDDI Au Wi-FiSPOTPay-per-minute(up to a maximumdaily charge)n/a n/a ¥27 Smartphones,tablets,laptopsConsumer Maximum daily chargeof ¥1,480, equivalent to55 minutes. Users mustsubscribe to cellular dataroaming package to beeligible.NTTDoCoMoWorld WingWi-FiValue-addedservice addedto cellular-data-roaming bolt-on24.4MB n/a ¥1,980 Smartphones,tabletsConsumer Available to all usersof Global Pake-Hodai.Users exceeding 24.4MBof cellular data will becharged a maximum dailyamount of ¥2,980.Thailand DTAC DTAC dataroamingRoaming bolt-on(daily)25MB Unlimited THB350 iOS, Android Consumer Per dayDTAC DTAC dataroamingRoaming bolt-on(weekly)500MB Unlimited THB2,599 iOS, Android Consumer Per weekSource: Informa Telecoms & Media
    • 18© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comKey marketing messagesThose operators that have broughtcommercial international-Wi-Fi-roaming propositions to market havechosen a variety of messages tohighlight their services’ key benefits(see figs. 20 and 21), which compriseaffordability, flexibility, simplicity,availability and peace of mind.AT&T’s marketing (see fig. 22)focuses on the affordability,flexibility and simplicity of itsproposition; NTT DoCoMo haschosen to highlight the simplicityof its service and the peace ofmind it brings to users; and Zainemphasizes the affordability of itsservice and the size of the hotspotfootprint available to customers.DTAC’s marketing (see fig. 22) isparticularly noteworthy for thefact that it cleverly uses the logosof several high-profile brands topromote the value and relevanceof its hotspot footprint to itscustomers.Structuring propositions tomaximize perceived value andaddressable marketThe structure and characteristicsof Wi-Fi roaming propositions varyalong six key dimensions.1. One-size-fits-all vs. tieredpropositions: Has the operatorlaunched a single proposition oradopted a tiered model with varyingoptions available to end-users?2. Unlimited vs. volume-/time-limited usage: Does theproposition include unlimited Wi-Fiusage or is it restricted by volumeor time?3. Integrated vs. stand-alonemodels: Does the propositioninclude integrated cellular/Wi-Fi data or is it a stand-aloneproposition limited to Wi-Fi only?4. Pay-as-you-go passes vs.recurring monthly subscriptions:Is the proposition available ona pay-as-you-go basis (e.g.,daily or weekly passes) or on asubscription basis?5. Device-centric vs. user-centricmodels: Is the service limited to asingle device or are users able touse it across multiple devices thatthey own?Fig. 20: Key benefits used by CSPs to promote the value of international Wi-Fi roamingto end-usersCountry Operator Affordability Flexibility Simplicity Availability(footprint)Peace ofmindUS AT&TJapan NTT DoCoMoThailand DTACJapan KDDISingapore M1Kuwait ZainSource: Informa Telecoms & Media“Now you can enjoy wireless data on the go and also takeadvantage of Wi-Fi connections when they’re available.It’s the best of both worlds for world travelers!”AT&TFlexibility“Use up to 5 devices simultaneously”M1“More than 100overseas countriesand regions”KDDIAvailability“We’ve made it even easier and moreaffordable to use data while traveling”AT&TAffordability“Over 1 millionlocationsworldwide”Zain“You’ll neverworry aboutroaming internetcharges again”Zain“No more billshock”DTAC“No matter howmuch you use theservice, there’s noneed to worry”KDDIPeace of mind“It’s as easyas 1, 2, 3”AT&T“Simple. Noapplicationnecessary”KDDI“Smooth and effortlesshigh-speed data”NTT DoCoMoSimplicityFig. 21. Examples of marketing messages used by CSPs to promote international Wi-Firoaming, Apr-13Source: Operator websitesFig. 22: Online marketing for Wi-Fi data-roaming plans for AT&T and DTACSources: AT&T, DTAC
    • 19© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com6. Global vs. regional pricing: Doprices vary in different regions,or is there a single globalprice applicable to all roamingdestinations?It is important to emphasize thatalthough operators can choose fromamong different characteristicswhen designing a service, thesefeatures are not mutually exclusive.Operators can build tiered offeringsthat incorporate a mixture of someor all the elements outlined above(see fig. 24).Creating business valueVaried business-value driversunderpin the structure ofinternational-Wi-Fi-roamingpropositions (see fig. 25). Servicedifferentiation and an enhancedcustomer experience are keydrivers for all operators, but whilesome have sought to directlymonetize Wi-Fi by chargingincremental service fees, othershave preferred to simply useWi-Fi as a value-added service tostimulate sales of higher-valuecellular-data-roaming plans.Those operators that have chosento create integrated offerings alsostand to benefit from the potentialto reduce IOT costs associated withcellular data roaming, assumingthat the wholesale rates for Wi-Ficharged by roaming partners arelower than those incurred forcellular data roaming.Importantly, operators are notrestricted to creating value along asingle line, and the right propositionstructures can generate incrementalbusiness value in multiple ways.Fig. 23: Key characteristics of selected commercially-available international Wi-Fi roaming modelsOperator One-size-fits-all or tieredportfolioUnlimited or volume-/time-limited Wi-FiusageIntegrated cellular/Wi-Fibundled service orstandalone Wi-Fi servicePay-as-you-go passesor recurring monthlysubscriptionsDevice-centricor user-centricchargingGlobal or regional Wi-FipricingAT&T Tiered portfolio Volume-limited Integrated cellular/Wi-Fibundled serviceRecurring monthlysubscriptionUser-centricmodelSingle global Wi-Fi priceNTT DoCoMo Tiered portfolio Unlimited Integrated cellular/Wi-Fibundled serviceRecurring monthlysubscriptionUser centric Single global Wi-Fi priceDTAC Tiered portfolio Unlimited Integrated cellular/Wi-Fibundled servicePay-as-you-go daily orweekly passesNot known Single global Wi-Fi priceKDDI One-size-fits-all Time-limited Integrated cellular/Wi-FIservice, but additional per-usage fees apply to Wi-FiRecurring monthlysubscriptionNot known Single global Wi-Fi priceM1 One-size-fits-all Unlimited Standalone Wi-Fi service Pay-as-you-go dailypassUser-centric (upto 5 devices)Variable regional pricingfor Asia-Pacific and Restof the WorldZain One-size-fits-all Unlimited Standalone Wi-Fi service Recurring monthlysubscription (nocontract)User centric Single global Wi-Fi priceSource: Informa Telecoms & MediaFig. 24: Key business value drivers of selected international Wi-Fi roaming propositions, Apr-13Oi AT&T NTTDoCoMoDTAC KDDI M1 ZainGenerate incremental roaming revenue via Wi-Fi access feesCapture wallet share from Wi-Fi-only devicesDrive sales of high-value integrated cellular/Wi-Fi roaming plansImprove roaming-centric customer experienceIOT cost reductionDrive customer acquisition through service differentiationSource: Informa Telecoms & Media
    • 20© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com• Wi-Fi roaming is a majorbusiness-value opportunityfor operators, thanks to thestrong adoption of and relianceon Wi-Fi-enabled devices bythe overwhelming majority ofinternational travelers. Usersnow expect Wi-Fi to be availablewherever and whenever theytravel, whether at home oroverseas. Importantly, it is clearthat international travelersalready regularly spend largesums of money to secure Wi-Fiaccess when abroad, a revenueopportunity that has not beensuccessfully captured byoperators to date.• If operators wish to succeedin the international-Wi-Fi-roaming market, they need tofocus on building propositionsthat clearly meet user demandfor transparent, simple andflexible offerings at an affordableprice. Operators can maximizethe addressable market andspending on Wi-Fi roaming bybuilding a segmented portfolioof offers that target differentcustomer segments and covera range of device types. Theyshould offer the flexibility of avariety of pay-as-you-go passes(daily, weekly and monthly)alongside subscription models,allowing for single- or multiple-device usage and offering bothstand-alone Wi-Fi access andintegrated cellular/Wi-Fi models.• Operators must carefullyconsider whether to attacha direct premium to Wi-Fi orposition bundled Wi-Fi roamingas a free value-added serviceto enhance the value of existingpropositions. Operators that havechosen not to attach a premiumto the service can monetizetheir investment by encouragingadoption of cellular data-roaming services among “silent”roamers, upselling customersto higher-value packages orbenefiting indirectly from theimproved experience offeredto customers through greaterloyalty and lower churn, andlower IOT costs.• If operators hope to derivebusiness value from offering animproved customer experienceand, importantly, avoiding “billshock,” it is imperative thatthe terms of propositions arepresented as transparentlyas possible. Operators shouldprovide a clear overview of thehotspot footprint (e.g., numbersand locations of hotspots), devicesupport (e.g., device types andoperating systems covered),charging models (e.g., inclusivedata volumes and which timezone is used to delineate dailypasses) and the expected userexperience (e.g., best-effort datarates).• Operators should carefullyconsider whether to offerWi-Fi on an unlimited basis.Unlimited models risk exposingoperators to inflated wholesale-cost settlements where anyroaming agreement has beennegotiated on a volume- or time-limited basis. Building on theimportance of segmenting offers,operators should consider tieringinclusive Wi-Fi data volumesbased on spending commitmentsand reserve unlimited Wi-Fifor only the highest-spendingcustomers. Such an approachnot only keeps the value ofinclusive Wi-Fi volumes frombeing diluted, but could be usedto upsell customers to high-value packages.• By bundling Wi-Fi into anintegrated cellular/Wi-Fi data-roaming proposition, operatorscan increase the profitability ofdata roaming by both stimulatingincremental spending andreducing the cost of wholesalecellular-data-roaming payments.Integrated propositions,moreover, should be viewed byoperators as an excellent meansof preventing any potentialcannibalization of existingcellular-data-roaming revenues.• Operators seeking to useWi-Fi roaming as a meansof presenting themselves asinnovation leaders must enterthe sector before their domesticcompetitors. The opportunityoffered by Wi-Fi roamingexists now, and the operatorsthat move the quickest will bebest positioned to capture acompetitive advantage.• Operators should examine thevalue of a partnership-basedstrategy when entering theinternational-Wi-Fi-roamingmarket, to benefit from time-to-market advantages and leveragethe know-how and experienceof partners to bring attractivecommercial propositions tomarket in a cost-effective way.Concluding remarks and recommendations for CSPs
    • 21© 2013 Informa UK Ltd. All rights reserved. www.informatandm.comYour global research partnerInforma Telecoms & Media delivers strategic insight founded on global market data and primary research.We work in partnership with our clients, informing their decision-making with practical services supported by analysts.Our aim is to be accessible, responsive and connected, both to the markets we serve and to your business goals.• Our global analyst teams have a deep understanding of the evolving telecoms and media value chain. Our researchprogram combines local market insight with sector-based analysis for a complete, integrated view.• Our research expertise is built on the in-house collection, validation and analysis of primary data. We track andforecast new and established datasets, using proven, robust methodologies.• Our services drive decision-making. Our data, forecasting and analysis, supported by interaction with clients,provides real value.OUR OBJECTIVES:– Message construction and validation– Market education– Go-to-market planning– ROI justification– Pricing and positioning– Competitor tracking– Customer segmentation and targeting– Sales enablement– Business opportunity analysis (sizing/prioritizing)– 1-5 year planning– Market entry planning (dynamics/demand)– Competitor tracking (investment/activity)– Information systems support– Numerical and analytical trackingFor more details on Informa Telecoms & Media and how we can help your company identify future trends andopportunities, please contact: ITMConsulting@informa.comOUR SERVICES:– Benchmark reports– Surveys– Webinars– White papers– Country reports– Company reports– Forecasts– Go-to-market reports– Case studies– Event facilitation– Speaking engagements– WorkshopsAbout iPass Inc.iPass helps enterprises and telecom service providers ensure their employees and subscribers stay well connected.Founded in 1996, iPass (NASDAQ: IPAS) delivers the world’s largest commercial-grade Wi-Fi network and trustedconnectivity platform. With more than one million Wi-Fi hotspots across 123 countries and territories, iPass gives itscustomers always-on, frictionless connectivity anywhere in the world – simply, securely and cost-effectively.Additional information is available at www.iPass.com or on Smarter Connections, the iPass blog.iPass® is a registered trademark and Open Mobile Exchange is a trademark of iPass Inc. Wi-Fi® is a registeredtrademark of the WiFi Alliance. All other trademarks are owned by their respective owners.