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Are we moving towards a carrier-less mobile industry?

By Claus Hetting   /     Nov 24, 2014  /     Uncategorized  /  

A couple of weeks ago CNN Money ran this story: You Might Not Need A Mobile Carrier by 2020. The week after The Economist published this story: When wireless worlds collide with a similar angle. So how much of this is real and how much is imagined? Here are some of the ways that this could happen:

The first way would be to give up your carrier and rely on Wi-Fi only using Hotspot 2.0. Hotspot 2.0 makes Wi-Fi ‘cellular-like’ meaning you can do away with splash portals, registrations, etc. Your device will automatically attach to a secure Wi-Fi service wherever there is one.

Hotspot 2.0 deployments have been slow initially but seem to be picking up. It’s not a completely crazy idea that Hotspot 2.0 could be so widespread by 2020 that the need for a cellular carrier would be much reduced and perhaps (for the very cost-conscious) go away entirely. And of course Wi-Fi networks cost much less than cellular networks to deploy.

So where are all the Wi-Fi hotspots going to come from? Apart from public Wi-Fi at every conceivable type of public venue, cable carriers (some with and some without mobile operations) are enabling millions of home Wi-Fi routers for public access – some with seamless access using Hotspot 2.0. I’ve written about it here.

Hotspot 2.0 is not the only way to aggregate millions of Wi-Fi hotspots and serve them up to consumers. Seamless ‘roaming’ onto millions of hotspots could be provided OTT using a device client of sorts. Wi-Fi service provider iPass recently projected that there will be one Wi-Fi hotspot per every 20 people on the planet by 2018. That’s by far the biggest wireless network in the world.

US-based Devicescape has already compiled a network of millions of amenity hotspots across the US and elsewhere and is making this huge footprint available as a service to carriers and MVNOs. There is also speculation that Google could be entering this space.

The other way to make mobile carriers (nearly) superfluous could be called the Scratch model. Scratch Wireless of the US championing of the ‘Wi-Fi First’ paradigm and have even launched a website to that effect.

Scratch says your wireless service could be free 80% of the time using free Wi-Fi only (most of it in your home or office).You only really need your cellular carrier when you’re in your car or on the street with no Wi-Fi in sight. For most people, this is only a small proportion of time spend. With Scratch you also get a regular phone number for your device.

As someone said: A small spark can start en enormous fire. Apple now supports Wi-Fi calling in iOS8 and this has started an avalanche of renewed interest in Wi-Fi as a complement to mobile. In a strange twist of fate, Apple’s Wi-Fi calling may be driving the uptake of voice over 4G (or VoLTE) because carriers are going to need VoLTE to make Wi-Fi calling seamless.

Meanwhile, the GSMA (global organisation of mobile operators) and ETSI may have inadvertently set fire to their own house by standardising embedded SIMs, originally intended for M2M applications (because managing SIM cards to connect millions of utility meters is a mess). Apple will be using embedded SIMs in new iPads so that you can ‘you can choose the [data] plan that works best for you’, Apple says.

It will likely be hard to get carriers to accept such as scheme for iPhones. But with Apple pushing, it could happen. The end result could be consumers using cellular networks a bit like Wi-Fi is mostly used today: For services where and when they need it, but without a subscription in the traditional sense. Gareth Price-Jones has written an excellent blog on the issue here.

If Apple gets their way (and they often do), free (or sponsored) Wi-Fi could be the primary means of connectivity with cellular being used as a backup when there is no Wi-Fi option in sight. In practice, the shift to Wi-Fi as the primary carrier has already happened with consumers ‘voting with their feet’ and manually selecting Wi-Fi wherever it’s available. Meanwhile, the Wi-Fi industry is making excellent progress on making Wi-Fi both seamless and ubiquitous.

So here is what I think could happen by 2020: Cellular services will not go away because consumers will always need the wide area coverage that only cellular (for the foreseeable future) can provide. But with Wi-Fi everywhere, the role of mobile carriers is likely to change dramatically.

The remedy for carriers is to embrace Wi-Fi as part of their service fabric now. Many are already doing this today. I’m betting that we will see a lot more of this over the next short while.

For a deep-dive into all things public Wi-Fi don’t miss the Wi-Fi Innovation Summit coming up in the great city of Copenhagen on December 9-10. It’s an outstanding opportunity to meet the thought-leaders and leading tech vendors in this space. We still have a few tickets available but don’t delay ‘cause they’re going fast – go to this link and register now.

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