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1. The Mobile Paradox
Stuart Taylor | April 25, 2013 at 6:51 am PST
Today’s world is characterized by what I call the “mobile explosion”—an environment defined by
mobilecloud becoming a platform for delivering everything. It is a world of heterogeneous networks,
licensed macro small cell networks, and unlicensed small cell networks (Wi-Fi for example), all
seamlessly combined. In this world, however, I believe we are facing a mobile paradox: on the one
hand, there is a staggering demand for data from our smartphones, tablets, and other connected
devices; on the other hand, the telecommunications industry is grappling with business and
monetization challenges around profitability, how to build up these networks fast enough, and
competition from over-the-top (OTT) operators. But, operators are struggling with building the
business case and understanding how to make Wi-Fi pay.
The much quoted Cisco Visual Networking Index (VNI) predicts that global mobile data traffic will
increase 13-fold from 2012 to 2017, reaching 11.2 exabytes per month. In parallel, the use of
unlicensed small cell networks (Wi-Fi) for Internet access is exploding as more mobile devices are
Wi-Fi-enabled, the number of public hotspots expands, and user acceptance grows. Until recently,
most technologists and mobile industry executives viewed Wi-Fi as the “poor cousin” to licensed
mobile communications. And they most certainly never saw any role for Wi-Fi in mobile networks or
their business. The explosion of mobile data traffic has changed all of that. Most mobile operators
now realize that offloading data traffic to Wi-Fi can, and must, play a significant role in helping them
avoid clogged networks and unhappy customers.
In the “Business Models and Monetization Video” in Big Thinkers in Small Cells, my colleagues and I
discuss revenue opportunities and challenges mobile operators face today with small cells, both
licensed and unlicensed. Mobile operators understand the business case behind offloading data

2. traffic to cheaper Wi-Fi—deferring significant capital expenditures for further build-out of the licensed
network. However, operators around the world are asking if there is more to Wi-Fi than just data
offload (the simple answer is “yes”). Or, more appropriately, how do they actually make money from
Wi-Fi—turning a cost of doing business into profitable business models?
The Cisco Internet Business Group (IBSG) has identified and built business cases with service
providers around 15 additional ways to benefit from Wi-Fi, beyond data offloading. As described in
our recent white paper, “Profiting from the Rise of Wi-Fi,” these 15 business models basically fall into
four different categories:
1. Business Effectiveness: using Wi-Fi access networks to decrease operational costs or improve
customer retention and service differentiation.
2. End-User Services: solutions for business users and consumers who want to use Wi-Fi to
connect their devices (such as smartphones, tablets, and laptops) to the Internet.
3. Inter-Carrier Wholesale: providing Wi-Fi-based services to other service providers (such as
cellular network operators, Wi-Fi providers).
4. Value-Added Services: enhancing basic Wi-Fi access with additional services and alternative
funding models.
As the pervasiveness and customer adoption of Wi-Fi continue to grow exponentially, these new
business models provide meaningful opportunities for service providers. For example, we are seeing
home broadband providers improve their customer retention by 10 to 15 percent by bundling their
broadband service with access to free public Wi-Fi. In addition, we believe that operators can
generate $10 to $15 per business user monthly by establishing a Wi-Fi-enabled “Business Anywhere
Service.” Or, the could drive an incremental $100-$150 per retail store by delivering enhanced,
value-added retail experiences, on top of the $50-$250 that operators charge per wireless access
point to run a managed Wi-Fi service for retailers.
But, don’t just take my word for it. End users tell us that they want these new Wi-Fi business models
and truly see value in them. Unique Cisco IBSG customer research revealed that mobile users not
only appreciate the lower cost and unlimited data usage of Wi-Fi, but also greatly value the flexibility
and convenience that it offers. In particular, customers were very interested in the
national/international roaming business model and the Wi-Fi value-added retail offering that would
make them more efficient, save them money, and enhance their shopping experience. Remarkably,
among U.S. broadband subscribers we surveyed who have free public Wi-Fi as part of their
subscription, 61 percent said the inclusion of Wi-Fi was “very” or “extremely” important in their choice
of broadband provider. Wi-Fi is a good way not only to attract subscribers, but to keep them as well.
Of course, not all business models are attractive to all service provider segments. In addition to
aligning the business models to different industry segments, providers need to set priorities and plan
where to start.
We feel that Cisco IBSG’s research, insights, and approach arm SPs with guidelines for setting
priorities and determining which approach is best for making real money from all small cell
technologies. Click hereto learn more about what additional Big Thinkers in Small Cells have to say
about Business Model and Monetization Opportunities.

3. Visit the Big Thinkers in Small Cells Portal
To learn more, please visit the Cisco Small Cell Solutions Page