Friday, January 18, 2013

Providers May Start charging for WiFi

In a recent survey done by Amdocs on Service Provider WiFi, they've found many providers are now finding ways to monetize the service due to the growing demand. Strictly speaking, this refers to WiFi hotspots that providers have deployed themselves. The main reasons for this deployment seems to be expanding their companies, lightening the load on their 3G/4G networks, and creating more revenue.

Rebecca Prudhomme, Amdocs vice president for product and solutions marketing, said "Service providers are now focusing on service differentiation, customer experience and monetization in Wi-Fi." AT&T has already started to implement the plan to monetize WiFi, having added WiFi roaming to their International data plans with no additional charge. However, there is a catch - they've set a 1GB/month limit. Of course, AT&T also has allowed for an additional 1GB of international data for no additional cost, where they had previously allowed only 300MB. So far, there's no word as to whether or not they will be changing their plans in the US.

Chris Nicoll, a principal analyst with Analysis Mason, who worked on the Amdocs Wi-Fi survey has said, "People need to understand that services go through an evolution in terms of pricing. "We've seen it in cellular, where early plans offered flat-rate pricing on wireless data. That helped users build up their usage habits under unconstrained plans. Then they moved to tiered plans and now multidevice plans."

Naturally, I understand that not everything is free. However, I'm sure with rates seeming to go up on mobile broadband and phone service it's going to be quite difficult explaining the additional cost of WiFi - especially when it is not as reliable. 

With that being said, Chris Nicoll believes that companies will be more creative in how they monetize WiFi saying, "Monetiziation doesn't mean charging users extra for the service." For example, think about how secure free WiFi hotspots are and then think how easy it would be for providers to use information gathered from these hotspots and then sell it to advertisers and marketers. Taking that into consideration, it would certainly make sense for providers to offer WiFi at no charge. Nicoll adds that with the right technology, this idea may appeal to retailers who would be able to target customers connected via WiFi with ads and coupons as they pass a store. I'm not so sure about this one myself, but it sounds like where the future of technology as a whole may be headed.

Wi-Fi users would, of course, have to opt in to these sorts of programs, but Nicoll said that even aggregated Wi-Fi usage data that is not subscriber specific could be worth something to marketers.