Technology advances have a way of allowing entrepreneurs to revisit business models that simply did not work in earlier periods. Microsoft tried for quite some time to popularize “tablets” as a better work device. Apple succeeded with a consumer content consumption approach.
“Application service providers” tried around 2000 to popularize what we now call cloud computing. But broadband access wasn’t good enough. These days, most consumer apps run in the cloud.
High definition television once was thought to require about 30 MHz of bandwidth per channel, where the existing standard was 6 MHz. But advances in coding made possible by Moore’s Law allowed engineers to squeeze 30 MHz worth of information into 6 MHz.
Nor would Netflix or Hulu have been feasible at a time when most people used dial-up access.
We might now be just at the beginning of a period where an old argument about Wi-Fi being a rival to mobile networks could be relevant in a new way. To be sure, Wi-Fi now is simple one more mode for a mobile service provider to allow network access for its customers.
Both network availability and consumer behavior have changed. Smart phone owners, not just users of PC devices, know they can use Wi-Fi access inside and outside the home. There is a financial benefit to doing so.
Mobile service providers also realize they can avoid capital investment by encouraging their users to switch their devices to Wi-Fi whenever possible, as well.
And there is another subtle change. Smart phones are used more often as Internet access devices than as communication devices. The big value mobile networks represented was the ability to make a phone call anywhere.
The big value of Wi-Fi (from a device perspective) is the ability to use the Internet without affecting a bucket of usage, at the places where heavy content consumption most frequently occurs.
That is even more true now that “Wi-Fi-only” tablets and Chromebooks (Google’s Wi-Fi-only notebooks) are becoming more popular. Compared to a smart phone, tablets or PCs are unlikely to be used in fully mobile mode. So where the value of a mobile phone is precisely that it can be used anywhere, tablets and PCs benefit much less from full mobile access, because those devices tend not to be used while people are literally in transit (the exception being high density areas where lots of people use mass transit).
So a combination of much-denser “out of the home or office” Wi-Fi, plus a new class of popular devices that are intended for Wi-Fi connections, could create new possibilities for Wi-Fi-based service providers.
Voice-based or communication-based applications are not the best candidates for “Wi-Fi-only” networks. But tablets and Chromebooks are a different matter.
Add Wi-Fi-equipped mobile network small cells to the existing infrastructure of public Wi-Fi hotspots and home and office Wi-Fi and Wi-Fi becomes the sort of access mechanism most people can use, much of the time.
Alternatively, in some cases entrepreneurs might imagine business models relying “mostly” on Wi-Fi with a mobile overlay. The advantage there is cost of service. If a service provider has to buy capacity from a mobile network, it is better to buy only enough to provide fully mobile access, relying on Wi-Fi for 80 percent of total access.
BT, for example, appears to be thinking along those lines.
Having won 4G spectrum (2×15 MHz of FDD and 20 MHz of TDD 2.6GHz spectrum), BT suggested it would not build a retail mobile network, but use 4G to augment BT’s fixed networks.
Now BT says it will launch its own retail network.
The thinking is that BT will source wholesale mobile connectivity from one of the U.K. mobile service providers to provide full mobile access, while using its own spectrum largely for fixed or location access.
That raises some interesting new questions. BT is not the first service provider to imagine using a mix of wholesale “mobile” access and “Wi-Fi access whenever possible.” Republic Wireless, for example, is using precisely that approach, offloading Internet access to Wi-Fi whenever possible.
But the new issue is the degree to which Wi-Fi roaming could allow an ISP to create an “untethered” but not fully mobile service offering, as cable operators basically are doing with their public hotspot networks, creating a national network.
In BT’s case, wholesale mobile spectrum would allow users to use the Internet when they are in transit, with the expectation that most Internet use will happen when people are at home, at work, or within range of a public Wi-Fi hotspot.
So where mobile operators will use Wi-Fi to offload mobile traffic, BT essentially will use mobile to augment and “upload” fixed traffic.