{"id":4994,"date":"2016-10-16T18:44:52","date_gmt":"2016-10-16T21:44:52","guid":{"rendered":"http:\/\/www.telesemana.com\/futurecom\/?p=4994"},"modified":"2016-10-16T18:46:25","modified_gmt":"2016-10-16T21:46:25","slug":"monetization-strategies-for-service-provider-wi-fi","status":"publish","type":"post","link":"https:\/\/www.telesemana.com\/futurecom\/2016\/10\/16\/monetization-strategies-for-service-provider-wi-fi\/","title":{"rendered":"Monetization strategies for Service Provider Wi-Fi"},"content":{"rendered":"

\"aptilo-beam\"<\/a><\/p>\n

This content is only available in English<\/p>\n

By Jos\u00e9 Farias Sales Director LATAM Aptilo Networks<\/em><\/p>\n

When I explain to people what Aptilo Networks does, that we turn service providers\u2019 Wi-Fi networks into Wi-Fi services, the first reaction is always the same. Some say \u201cAha, so you are behind the hotspot portals that I use to sign-up and pay for Wi-Fi services when I am travelling? Your service provider customers must make a ton of money on this.\u201d Others goes so far to say \u201cHow can anyone make money on Wi-Fi, it\u2019s supposed to be free!”<\/em><\/p>\n

They are normally very surprised when I say that it\u2019s quite possible to monetize free Wi-Fi and that any money coming from hotspot services are just the tip of the iceberg. It\u2019s only a fraction of what Aptilo does and it is definitively only the icing on the cake when it comes to service provider revenue.<\/p>\n

So, where is the money in Service Provider Wi-Fi? Just like with the iceberg, the big volume is hidden underneath the surface in indirect monetization.<\/p>\n

\u201cCustomer retention is by far the largest component of the Service Provider Wi-Fi business case!\u201d<\/em><\/p>\n

Indirect Wi-Fi monetization \u2013 customer retention<\/strong>
\nAccording to analyst firm Tefficient, the cost of churn and churn prevention is typically around 15% of mobile service revenue \u2013 in some cases it\u2019s above 20%. This means that a $10 billion operator spends $1.5-2.0 billion every year to stand still, to have the same number of subscribers at the end of the year as they had in the beginning.<\/p>\n

Tefficient came to the following conclusion in their Wi-Fi \u2013 The Last Piece of the Customer Retention Puzzle? Analysis #1 2016: \u201cWi-Fi is a piece of the customer retention puzzle. The Wi-Fi piece needs to be accompanied by other pieces, but no puzzle will be finished without it\u201d (download the full analysis here https:\/\/www.aptilo.com\/puzzle).<\/p>\n

Let\u2019s take a look at a real case from Tefficient\u2019s analysis. Rogers in Canada with 6.9 billion Canadian dollars in mobile service revenue (Q3-2014 to Q3-2015). Rogers\u2019 reported cost to retain mobile customers was a little bit above 1 billion Canadian dollars, that\u2019s 15.5% of their mobile service revenue. Unlike their competitors, Rogers does not offer Wi-Fi services.<\/p>\n

In our opinion there is no reason why Rogers couldn\u2019t<\/strong> use Wi-Fi to lower their retention cost to the same level as their competitors Bell and Telus, both of which are successful with Wi-Fi, and both spend 12-13% on subscriber retention cost.<\/p>\n

Customer churn is a complex area with a lot of different dependencies. But, let us for a moment suppose that the reason for the difference in churn is whether or not the carrier offers Wi-Fi services.<\/p>\n

What if Rogers, by using Wi-Fi services, could come down to the level of Bell, spending only 12.4% of mobile service revenue on retention? Then they would reduce their total mobile retention cost by 20%, creating an annual savings of 215 million Canadian dollars. This illustrates the point I want to make: customer retention is by far the largest component of the Service Provider Wi-Fi business case!<\/p>\n

Indirect Wi-Fi monetization \u2013 Wi-Fi Offload<\/strong>
\nWi-Fi Offload, where users are automatically flying on to a secure encrypted Wi-Fi network using seamless SIM authentication, is another great example of indirect monetization. You can choose to either offload the entire cellular network by using local data traffic break-out to the nearest Internet connection, or just offload the radio part backhauling the traffic to the mobile core. In Aptilo\u2019s customer base, local break-out is by far the most common method, likely because we can offer the same level of policy and charging control for local break-out by integrating with the core and OSS\/BSS systems.<\/p>\n

The potential cost savings with Wi-Fi Offload in dense areas varies depending on many factors, but studies show that the cost (per bit TCO) of delivering data using Wi-Fi Offload is only 10-33% of the cost in 3G\/4G macro networks.<\/p>\n

Indirect Wi-Fi monetization \u2013 Wi-Fi Calling<\/strong>
\nWi-Fi is everywhere and service providers can use any<\/strong> Wi-Fi network for their Wi-Fi Calling services, including the one in your home. The main reason for service providers to deploy Wi-Fi Calling is to enhance indoor coverage\u2026which translates into more satisfied customers, so it is basically a customer-retention game, and we all know the potential in reducing churn.<\/p>\n

Additionally, operators that have planned to implement femtocells or distributed antenna systems (DAS) to cover subscribers\u2019 homes can now achieve large savings in both CAPEX and OPEX by utilizing a network that is already there \u2013 the subscriber\u2019s own Wi-Fi network.<\/p>\n

\u201cBut, are there really no good direct monetization\u00a0<\/em>options for Service Provider Wi-Fi?\u201d<\/em><\/p>\n

Direct Wi-Fi Monetization \u2013 Hotspot services<\/strong>
\nEven if it\u2019s just the icing on the cake, the extra hotspot service revenue from ad-hoc users is of course very welcome. These services are also a good way of recruiting new subscribers. \u201cDo you like our Wi-Fi service? Become a subscriber and get it included in your service.\u201d<\/p>\n

Direct Wi-Fi Monetization \u2013 Upsell<\/strong>
\nA more important direct Wi-Fi monetization form is to increase ARPU or at least stop the trend of decreasing ARPU. There are many examples globally of this.<\/p>\n

Telia in Sweden uses Wi-Fi to move customers to more expensive plans by just including Wi-Fi in the higher tiers. Others such as SingTel in Singapore and Telenet Belgium simply raised their price by $2-3 USD \/ month because they have Wi-Fi services. Proximus in Belgium bundles Wi-Fi with other services such as TV. Wi-Fi is only available for multi-play customers.<\/p>\n

Direct Wi-Fi Monetization \u2013 Venue Wi-Fi<\/strong>
\nSelling attractive B2B guest Wi-Fi services to venues such as hotels, healthcare providers, enterprises, stadiums and retailers is perhaps the biggest growth opportunity for service providers working in an otherwise saturated market. Guest Wi-Fi services also provide a way for the operators to go into these businesses to sell more products and services.<\/p>\n

Venue Wi-Fi not only provides additional revenue, it is also an excellent way to gain indoor coverage for your subscribers!<\/p>\n

I will speak on the subject \u201cMonetization Strategies for Service Providers\u201d at Futurecom on October 18 at 2:40 pm in room \u201cChile\u201d. I hope to see you there.<\/p>\n","protected":false},"excerpt":{"rendered":"

This content is only available in English By Jos\u00e9 Farias Sales Director LATAM Aptilo Networks When I explain to people what Aptilo Networks does, that we turn service providers\u2019 Wi-Fi[…]<\/p>\n","protected":false},"author":18215,"featured_media":4996,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[358,390],"tags":[],"class_list":["post-4994","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advertorial-2016","category-aptilo"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.telesemana.com\/futurecom\/files\/2016\/10\/aptilo720.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/posts\/4994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/users\/18215"}],"replies":[{"embeddable":true,"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/comments?post=4994"}],"version-history":[{"count":1,"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/posts\/4994\/revisions"}],"predecessor-version":[{"id":4997,"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/posts\/4994\/revisions\/4997"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/media\/4996"}],"wp:attachment":[{"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/media?parent=4994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/categories?post=4994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.telesemana.com\/futurecom\/wp-json\/wp\/v2\/tags?post=4994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}