Wi-Fi
Will the 4G launch kill Wi-Fi hotspots?
Competing with ‘free’ is famously diffi cult. Chris Bull considers the future of Wi-Fi R
ightly or wrongly, the telecoms regula- tor Ofcom has given Everything Eve- rywhere the green light to become the
fi rst mobile operator to launch 4G services in the UK. T e decision means that we shall shortly see super-fast mobile Internet on off er in the UK for the very fi rst time. While many of us will be pleased to hear that
we can get broadband-style Internet speeds out- side the house, the news that 4G services are to be launched earlier than most of us expected may not be music to the ears of Wi-Fi hotspot providers, who currently fi ll the niche between 3G and home broadband. Many of us consider mobile Internet con-
nectivity to be an indispensable utility and de- mand instant access to a range of resources on the move, including e-mail, instant messaging, multimedia content and voice and video calling. Most of the time 3G will suffi ce, but when we haven’t got much signal or we want to upload or download a big fi le, such as a movie or hi-res pictures, many of us will seek out a nearby coff ee shop or other venue, with public Wi-Fi . As well as being signifi cantly faster than 3G, using Wi-Fi means that we can avoid paying extra fees for go- ing over our monthly mobile data limit.
Data allowance However, with the advent of super-fast 4G serv- ices, will there still be a need for Wi-Fi hotspots? Or are they destined to be consigned to the pages of history?
About the author
Chris Bull is co-founder and chief executive of Selective Media, a London-based company which specializes in advertising, promotional
and sponsorship campaigns in high- footfall locations
28 Sky, which owns the 10 000 hotspots operated
by T e Cloud, certainly seems to think that they have a future. T e media company suggests that 4G networks could quickly become congested and that speeds could drop as more people make the leap from 3G and download even greater volumes of mobile data. Plus, with most mo- bile operators still touting capped data plans, it’s likely that subscribers will continue to log on to Wi-Fi networks to avoid exceeding their month- ly Internet allowance. Furthermore, mobile operators are increasing-
ly off ering free access to large networks of pub- lic Wi-Fi hotspots as part of their subscription packages. Off ering this extra perk gives opera- tors an opportunity to diff erentiate themselves from their competitors, while at the same time helping to take some of the strain off their mo- bile networks – many of which are struggling to support rapid mobile data traffi c growth. After investing a considerable amount to build or ac- quire these Wi-Fi networks, it is highly unlikely that operators will want us to stop using their hotspots any time soon.
Travellers’ tools Another factor that could save Wi-Fi hotspots from extinction is that tourists love them. As anyone who has ever used their mobile phone abroad to access the Web can attest, data roam- ing charges can be incredibly expensive. Just downloading a couple of megabytes of data could end up costing you a fair wedge, especially if you are travelling outside Europe. For visitors coming to the UK, the ability to
use Wi-Fi to Skype or Facetime with friends and family at home is a big plus, and so it’s likely that free Wi-Fi will remain high on travellers’ wish lists when they search for accommodation. In fact a recent study by
Hotels.com found that hotel guests now view free Wi-Fi as more impor- tant than a free breakfast or parking.
A new model While research suggests that off ering free Wi-Fi can help hotels boost their ratings on review sites such as TripAdvisor and
Expedia, and in doing so increase the vol- ume of bookings that they receive, many hotels continue to charge guests for wire- less Internet access. However, this is not the only way that hotels, coff ee shops and other Wi-Fi hotspot providers can recover their in- vestment in communications infrastructure.
Online advertising One model that off ers a way for Wi-Fi provid- ers to monetize hotspots without charging users for Internet access is through supporting online advertising. Since most Wi-Fi hotspots are in high foot-
fall areas, such as shopping centres, airports and train stations, there is an opportunity for marketers to reach an extremely receptive and captive audience by using the Wi-Fi login pag- es to display advertising. By taking some basic registration information from users, compa- nies can easily target audiences by age, gen- der or occupation. Furthermore, as hotspots are highly location-specifi c, companies can provide tailored marketing off ers to consum- ers within the catchment area of certain shops or services – for example, 10 per cent off at a nearby Starbucks.
Monetizing the Net And fi nally, while Ofcom may have granted Eve- rything Everywhere permission to off er 4G serv- ices to the public, it may be a little while longer before 4G Britain truly becomes a reality. Just look at 3G. T e UK’s mobile operators
are still racing to hit the target set by Ofcom to provide 3G services to 90 per cent of the country by 2013 – even though the UK’s fi rst 3G serv- ice was launched almost a decade ago – by 3 on 03/03/03. So, to put it simply, 4G will not be a nail in
the coffi n for public Wi-Fi. In the same way that 3G didn’t kill it, the launch of 4G won’t be the death knell for Wi-Fi. T at said, the future of paid Wi-Fi doesn’t look too rosy. As many of us become increasingly reluctant to pay for Internet access, Wi-Fi providers must fi nd new ways to monetize public Internet access.
LAND mobile September 2012
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