Cisco IBSG Mobility Insights - There's Money in Wi-Fi
Cisco IBSG Mobility Insights - There’s Money in Wi-FiPosted by stuartt Oct 22, 2012The insatiable demand for smartphones, tablets, and other connected devices is generating staggeringamounts of mobile data. As my previous blogs discussed, the use of Wi-Fi for Internet access isexploding as more mobile devices are Wi-Fi-enabled, the number of public hotspots expands, and useracceptance grows. Service providers (SPs) now realize Wi-Fi must be an important part of their strategyto manage growing data loads on their networks and meet increased customer expectations. Whileoperators are learning to accept the role of Wi-Fi, they still struggle with ways to turn a “cost of doingbusiness” into profitable business models. The Cisco Internet Business Solutions Group (IBSG) hasconsulted with leading SPs from around the world about new, innovative Wi-Fi business models that canprovide a reasonable return on investment (ROI), as outlined in our paper, “Profiting From the Rise ofWi-Fi.”To learn more about what consumers are doing with their mobile devices, and to test their response tothe new Wi-Fi business models, Cisco IBSG recently conducted a survey of U.S. mobile users. Followingare our top three findings related to monetization of Wi-Fi:1. Bundling free Wi-Fi can be an effective way to retain existing customers.Bundling free public Wi-Fi access with a home broadband subscription is an important factor incombating customer churn. Almost two-thirds of broadband subscribers who know that free Wi-Fi isbundled with their home broadband subscription indicate that it is a “very” or “extremely” importantfactor in their choice of provider.Importance of Free Wi-Fi in Broadband Provider Choice Source: Cisco IBSG, 20122. Offering free public Wi-Fi can help to attract new customers.
Not only does the inclusion of free public Wi-Fi seem to be effective in retaining existing broadbandcustomers—it may also be a means of attracting new ones from competitors. Half of all broadbandcustomers indicate that they would be at least moderately likely to switch providers if they were offeredfree public Wi-Fi, with 22 percent saying that they would be “very” or “completely” likely to switch.3. There are new ways to make money from Wi-Fi—beyond offloading.To date, most service providers have viewed Wi-Fi as a means to offload some mobile data traffic andhelp retain customers. However, we have discovered new ways to make money from Wi-Fi. Specifically,we found a significant level of customer interest in three new, innovative business models: o Secure Wi-Fi access to content stored remotely in a digital locker: The biggest perceived benefits are: 1) lower cost/no coverage; 2) flexibility of location and device; 3) data security and privacy. o National/international Wi-Fi roaming: The biggest perceived benefits are: 1) lower cost/no overage; 2) flexibility of location; 3) no mobile roaming charges. o Enhanced in-store shopping experience (e.g., product information, mapping, coupons): The biggest perceived benefits are: 1) efficiency while in the store; 2) free Wi-Fi access; 3) personalized and relevant deals/coupons; 4)enhanced shopping experience.Cisco IBSG conducted its online survey of 1,079 U.S mobile users in March 2012. The study was alsoundertaken in Brazil, Canada, Mexico, and the United Kingdom. Full results of the survey can bedownloaded here.Future articles in the Cisco IBSG Mobility Insights series will highlight additional findings from the studyand our predictions for key changes in the mobile industry over the next two years.Read the next blog post of this series:Cisco IBSG Mobility Insights - 5 Predictions for the Future of Wi-Fi and Mobile For more discussion on everything mobile, visit the Service Provider Mobility Community at www.cisco.com/go/mobilitycommunity.