Wi-fi? Why Not?

There’s a lot of talk about the need for mobile service providers to offload data traffic from congested macro networks. After all, mobile data traffic has risen 8,000 per cent in four years, and average data usage of some top-end smartphones exceeds 1 gigabyte (GB) a month.

But what do subscribers think about this? In fact, most subscribers couldn’t care less about offload. When it comes to mobile usage, subscribers’ concerns are simple: coverage, experience and cost. These three factors are what draw in new customers to an operator, and encourage their loyalty. 

So what are the options for operators to encourage offload? They cannot advertise ‘offload.’  Subscribers are not interested in the inherent benefits of data offload, as long as they are receiving the coverage and experience they expect at a price they can afford. Service providers must instead change subscribers’ attitudes and their subsequent behaviour when it comes to data usage.

Win by losing
Today, operators are reaping some offload benefit from a minority of users turning to wi-fi on their smartphones. While this may appear to be a ‘win’ for the service providers, the reality is that people turn to wi-fi when they can’t get the coverage or the mobile experience they expect from the network. 

Another technique emerging to drive offload is operators capping data usage on the macro network. Adjusting the cost of mobile data service will force a change in behaviour, driving subscribers to find a lower cost alternative – often wi-fi. Certainly, the large majority of subscribers are not actually impacted by these caps, but the publicity around them does little to instil loyalty or support for the operator’s service.

Losing the public’s confidence in your service or brand, through sub-par performance or punitive pricing, is no way to win the fight again the data deluge. Rather, operators could offer subscribers positive benefits to incentivise offload. This can be done by offering people what they want – lower costs and a better experience.

Better coverage = significant offload
With the majority of subscribers using their phones indoors, both at their homes and offices, positioning data offload as an indoor coverage enhancer offers subscribers an incentive to offload traffic from the macro network.

Getting five bars of full coverage indoors is often a challenge. Larger structures with deep interior rooms may have so many layers of building materials that they completely block cellular signals from reaching the macro network. 

In cases where subscribers are able to get a bar or two of signal, the impact on other devices within the area is outsized. Devices must work significantly harder to maintain even a poor connection, which impacts the capacity and throughput of others trying to access the same network resources. 
In addition, the high concentration of hundreds, or even thousands, of residents or employees accessing the mobile network from smartphones and tablets can quickly overwhelm a standard network coverage approach. 

By leveraging wi-fi for coverage, the subscriber reaps the benefits of enhanced indoor performance and the operator adds much needed capacity to its overcrowded network, freeing up spectrum for outdoor users.

Wi-fi vs. femtocell 
One question that arises among operators is the relative merits of wi-fi versus femtocells in improving coverage. Though femtocells offer improved indoor coverage in areas where macrocell coverage is poor, their uptake has been slow, due to subscribers’ reluctance to pay for a service they believe should be part of their operator’s contract.

As a result, operators have had to offer femtocells free-of-charge, in an effort to encourage loyalty in areas where subscribers witness patchy indoor coverage. Yet even when provided for free, subscribers seem to be reluctant to add another piece of equipment to their home network. 

In the US, Sprint has been offering a femtocell product since August 2008. In August 2010, the company rolled out a newer, faster model, and said it would offer the femtocell free of charge to ‘qualified’ customers. Yet three years in, and with a free offer, Sprint claims to have just 0.25m femtocells in their network of 50m subscribers – a penetration rate of just 0.5 per cent. 
In turn, operators are beginning to see vast wi-fi networks already deployed across homes, offices, coffee shops and other public spaces – readily available to subscribers and service providers alike, at little or no extra cost.

According to a 2010 YouGov online omnibus survey of nearly 2,200 respondents in the UK, 74 per cent of people who own a smartphone with wi-fi reported they would be interested in an application that uses wi-fi to improve indoor 3G coverage at home or in the office.

To support this, the mobile industry has defined a smarter way to use wi-fi, with the 3GPP’s UMA/GAN specification – Smart Wi-fi. It enables voice and data offload, increases in-building data capacity, and provides improved indoor coverage similar to a femtocell.

If the price is right
Though an indoor coverage boost may spur a sizeable proportion of an operator’s subscriber base to offload data, it does not appeal to every subscriber, as not everyone is plagued by the indoor coverage challenge. But almost every consumer would be motivated by cheaper calling and data, and so that will be the determining factor in changing user behaviour.

YouGov’s survey revealed that a staggering 90 per cent of subscribers would adopt wi-fi offload, if operators offered cheaper calling as a result. The survey highlights the fact that subscribers are willing to change their behaviour to lower their mobile bills.

Competition in the operator marketplace is fierce, with new players such as Tesco Mobile keen to win market share by providing cheaper contracts. Offering subscribers incentives can ensure operators retain their competitive advantage.

The cost to deliver a gigabyte of data varies depending on the underlying network architecture and transport, but with today’s HSPA networks, the cost is roughly $10. With two thirds of usage happening within range of wi-fi, service providers can benefit by giving their users a pricing incentive to turn on, and leave on, wi-fi

Happy customers
T-Mobile US has embraced the value proposition of incentivising offload, and offers subscribers direct incentives through its Wi-fi Calling service. T-Mobile has more than 5m million smartphones in the field enabled with the service. 
More than 50 per cent of T-Mobile’s handset portfolio supports Wi-fi Calling, and the company recently announced that it logs 40m wi-fi calls each month. The service, powered by Smart Wi-fi, gives subscribers the incentive they need to use wi-fi, and delivers unmatched offload benefit for T-Mobile.

Rather than complaining about data caps or macro network performance, end users are lauding T-Mobile’s service with comments like “Switching to T-Mobile next week, Wi-fi Calling is a big reason why…” and “I love calling over wi-fi” and “It’d be awesome if T-Mobile’s Wi-fi Calling became available to all AT&T customers as well.” 

Creative approach
Offering positive incentives draws in new customers, encourages customer loyalty, and most importantly, gets results. Operators need to sit up and pay attention to offload before their networks diminish under the strain of prolific smartphone use. To encourage offload, operators cannot simply advertise offload. They need to save customers money. To stay ahead, operators much get creative in their approach and adopt incentives to drive offload, and offering a Smart Wi-fi solution is the first step.

Steve Shaw is vice president of corporate marketing for Kineto Wireless