The mobile broadband service provider iPass has created a new service offering for mobile operators that allows them to offer the equivalent of Wi-Fi roaming, a key element to enabling carriers to charge for access to ubiquitous and quality assured Wi-Fi. The new iPass service, called the Open Mobile Exchange, is only one of many data points in Wi-Fi’s slow transition from home networking tech for geeks to must-have for every mobile device, to perhaps another source of carrier revenue.
In the coming year, Wi-Fi will become a different animal than what we currently know and love. Thanks to carriers getting more involved in using Wi-Fi for network offload — as well as more devices seeking a WiFi signal — this hippie technology is about to get the layers of security, authentication and manageability once reserved for cellular networks.
“Wi-Fi is just in this second renaissance,” iPass’ CEO Evan Kaplan said in an interview. “People are building out Wi-Fi like crazy, and it’s become a viable network for carriers and changes the industry landscape and allows them to offer service they can’t get their with licensed spectrum. There is a recognition [among carriers] that there is a role for Wi-Fi and certain mobile services should not go through the 4G core.”
Kaplan anticipates that in the next four to five years Wi-Fi will become a carrier dominated phenomenon. Of course, Kaplan is pitching his new service, which acts like an authentication and billing layer between Wi-Fi networks and enables carriers to track and charge those who roam onto Wi-Fi networks much the way data roaming happens today. It’s an awesome concept, but it has a downside for consumers — this level of service won’t be free.
Despite his interest in carrier-dominated Wi-Fi, Kaplan is not alone in his views. Ronald J. de Lange, the CEO of Tekelec, a company providing carrier gear, believes that Wi-Fi is here to stay, and that carriers are looking for ways to ensure reliability and track it across their networks. He sees an opportunity for startups such as WeFi and Skyhook, which are building Wi-Fi databases, to offer services that carriers will pay for as they seek to implement roaming and perhaps charge their end users.
It’s hard to imagine that a carrier like ATT,which operates its own Wi-Fi hot spot network, will suddenly charge users for a service it currently provides as part of its mobile broadband (and wireline) service. But once roaming is widely implemented, it could charge users a fee for access to international hot spots. Under that scenario, ATT gets new revenue and so do potential roaming partners that ATT could end up paying for the privilege of its subscribers roaming onto their Wi-Fi networks.
It’s also likely that other providers who aggregate services, such as Boingo or even startups such as Macheen, will gain traction as Wi-Fi becomes more integral for connectivity and thus, worth more to consumers. Even if folks don’t pay a carrier, they may pay someone be it a service like Boingo or even a retailer or device maker selling a service created by iPass or Macheen.
Even if carriers can’t find a way to milk better Wi-Fi, Kaplan is right: Wi-Fi is hot and carriers are interested. Just last week, KDDI announced that it will build 100,000 hot spots, and earlier this year China Telecom said it would deploy 1 million. Kaplan said iPass currently authenticates users across more than 500,000 hot spots — a number Kaplan expects to rise to seven-hundred-something thousand by the end of this year.
So now that wi-Fi is clearly hot and clearly necessary, we’ll see carriers try to monetize it. Get ready for carrier-grade Wi-Fi and a new sales pitch.
Related content from GigaOM Pro (subscription req’d):
- In Q4, Data Was Mobile’s Hot Spot
- U.S. Wireless Data Market, Q1 2009
- Mobile Wrap-up: Q1 2009
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