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Best Strategies for Mobile Wi-Fi Monetization

December 28th, 2013

Mobile Wi-Fi MonetizationSo far, WiFi deployment has been widely considered as a cost avoidance / saving strategy, with little evidence of direct revenue contribution so far. This is because telcos have not directly focused on monetising WiFi traffic, but instead have (or are) focussing on monetising total data traffic.

But with rising focus on data monetisation and as WiFi networks carry more and more traffic, telcos’ focus/ strategy towards this segment could also change. Currently, most telcos offer it free or as a bundle, but there are some stand-alone WiFi plans too. But as seen in the case of China Mobile or the Malaysians, the takeup rates are negligible for these plans.

So What are the Best Strategies for Mobile Wi-Fi Monetization ?
As seen in recent years in Singapore or Korea, unlimited data allowances reduced the need / usage of WiFi (unless the coverage was patchy), and at the same time, entry level packages were priced too low as well. This isn’t the case in Japan, where operators charge around USD50-60 for entry level plans, which has provided some relief on data economics.

WiFi can do the heavy lifting on data traffic, which can stimulate fixed broadband usage and support total ARPUs. This can also be used as a service differentiation tool. This kind of service is mostly seen in India offered by Idea Wi-Fi Broadband.

Indoor coverage/ spectrum constraints clearly increase the merits of offloading. However, there are other solutions too, such as using distributed antenna systems (DAS) or femtocells for example to address indoor coverage, which can reduce costs.

More segmentation – rather than targeting retail consumers directly, it is likely that corporate/ SME customers could be better monetised, eg, selling directly to Starbucks rather than its retail customers.

Incremental cost of WiFi hotspots for integrated operators can be much lower as they are likely already servicing the premises for broadband. In cases where there may not be a charge for the end user, some of the WiFi hotspots may be monetised as corporate revenues (for example when Starbucks offers WiFi, they need to pay telco carriers). For home WiFi offloading, users are already paying for their broadband connection and installation costs.

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