Monday, May 11, 2015

Is "Wi-Fi First" Essentially a Substitute for "Fixed" Service?

Some make the argument that Wi-Fi, by itself, can be a functional substitute for mobile services. Few have yet gone as far as U.S. cable TV operators Cablevision Systems Corp., which relies solely on Wi-Fi for access.

But many firms intentionally rely on a “Wi-Fi first” connectivity strategy (Republic Wireless, Fon, Free Mobile). And virtually all mobile and fixed operators rely on a “Wi-Fi also” model for connectivity.

The argument for “mobile plus Wi-Fi” is simple. Signal quality, bandwidth and end user cost savings make advantageous switching a mobile-connected device to Wi-Fi when possible.

The argument for “Wi-Fi only” is that most usage already happens when customers are stationary--at home, work or a public venue.

That is true, but was true in the past as well. When the only way to use telephone service was to be at a location with fixed network phone service, “most” usage was at home or the office. There was some public venue use, from payphones, hotel room phones and so forth.

Mobility changed all that. The point is the value proposition. Mobility had great value because people appreciated the ability to communicate from anywhere, not just the fixed locations.

It is possible that same value will exist for mobile Internet communications (voice, messaging, web and apps) as well. Even if 80 percent of data consumption or usage time occurs in a fixed location, that is not so different from the past, when all we had was fixed communications.

People will highly value the 20 percent of consumption that happens “on the move.”

That is the big unknown for “Wi-Fi only” approaches, which essentially become fixed network substitutes, not really substitutes for mobile service.

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