reseller channel: Wi-Fi: For MVNOs, It's Personal

By Tara Seals

Wireless market convergence continues apace with companies selling cellular, Wi-Fi, and, soon, WiMAX network products as bundled offers. While Sprint Corp. and T-Mobile USA already have bolstered their ARPUs by selling cellular and Wi-Fi service together, the mobile virtual network operators (MVNOs) who rely on branding and marketing to gain customers could take the packaged deal concept one step further, by creating personal network packages.

Infrastructure and OSS-light MVNOs, which simply resell other carriers’ wireless networks while making use of a variety of enablement packages for the back office and billing, have been touted as a soon-to-be disruptive force in the North American market. With few upfront expenses, MVNOs target niches of customers and market to them aggressively with differentiated content tailored to specific slivers of users. MVNOs such as Virgin Mobile USA LLC, Boost Mobile, ESPN and Disney could flesh out their already well-developed idea of personalized communications content by leveraging Wi-Fi to provide a wider breadth of services.

“Wi-Fi shows that when you have a fat pipe, there are some interesting things you can do with it, like video or voice, or both,” says Frank Hanzlik, managing director at the Wi-Fi Alliance, the independent industry group responsible for certifying 802.11 products as standards-compliant and interoperable. With the advent of dual-mode handsets, he notes, “You can carry your communications with you from the home to the hotspot to the office, and by integrating Wi- Fi with 3G, you have wireless ubiquity. It’s going to give users the ability to use and interact with a lot of exciting, customized content and applications, and MVNOs are set to boost that space as they will leverage a variety of pipes to deliver their offerings.”

For instance, MCI Inc. may combine cellular and Wi-Fi, for the purposes of beefing up its Remote Access suite and capturing the lucrative business segment. The carrier recently expanded its Wi-Fi coverage for remote access users, almost doubling its footprint in the United States, Europe and Asia, and adding coffee shops, major bookstores and retail shipping, postal and business service centers. The expansion was made possible through agreements with hotspot operators like Boingo Wireless Inc. and Wayport Inc., and brings the grand total to nearly 11,000 locations in 36 countries.

“Network access is a key component for any company to effectively conduct business whether its employees are located in an office or working on the road,” says Nancy Gofus, MCI’s senior vice president of product management. “Our far-reaching access capabilities will address growing business demand for simple and ubiquitous Internet connectivity.”

To further expand that notion, MCI actively is considering getting into the MVNO business to target enterprise users, although the carrier stresses it has no specific plans thus far. “UMTS or EV-DO integrated with our other remote-access offerings would give us a suite of things to offer, amounting to different access for different users depending on the person’s needs, and giving us a real edge in that business market,” says Kevin Gatesman, senior manager of emerging technologies at the carrier. “An MVNO play would allow an extremely high-value sale. It would also allow us to treat voice as an application at hotspots.” Becoming known as the go-to wireless operator for enterprises looking for flexible, customizable service plans would help the carrier strengthen its foothold in that niche, he notes.

Widening addressable markets and churn reduction are classic reasons for bundling new services, but another reason for an MVNO to add Wi-Fi service is pent-up demand. Like wireline VoIP, a Wi-Fi-cellular integrated voice service could find a willing audience by lowering users’ monthly bills.

“According to our sources, as much as 30 percent of all cellular calls are made indoors, calls which would then be possible to conduct over Wi-Fi instead of cellular networks,” says Lars Edman, CEO at Sweden-based OptiMobile AB, which has launched the WBX Enabled Service to support MVNOs looking to expand their addressable markets. “Also, today, many homes and enterprises have invested in a WLANinfrastructure, and a broadband connection. These investments were initially made in order to achieve means for data communication. To also enable voice communication using these investments is a [cost-free benefit] for these users.”

Competitive clout is another factor spurring service integration. “If an MVNO wants to stay on par with the network owners who are pouring millions into their infrastructures, then they will have to invest to expand their services portfolio or risk getting left behind,” notes Lee Tsao, worldwide solutions director for Pronto Networks Inc.

Thanks to virtual network enablers, MVNOs can enlist help with the nuts and bolts of adding Wi-Fi if lacking a robust infrastructure.

“Think about what it takes,” says Tsao, ”a data center, hardware, software, people to manage it, customer service, tech support, collections and revenue management, subscription management and more.” Pronto offers a hosted and managed enablement service for wireless operators to bypass 90 percent of those requirements. On the Wi-Fi side, Pronto can support an operator that wishes to set up its own hotspots by simply providing the management and connectivity on a hosted basis, or users can leverage Pronto’s global roaming arrangements to create a white-label hotspot presence. They can then add games or music downloads, or location-based services such as e-jukeboxes and friend-finder services, to make the service personalized for a target group of users.

Meanwhile, OptiMobile’s WBX Enabled Service is installed on a server in the MVNO’s data center, via standard interfaces. End users are equipped with dual-mode mobile phones with WBX UniPhone software installed. The MVNO can then monitor Wi-Fi usage as well as collect cellular call information. The MVNO is free to choose any charging scheme for either service. “The adoption of Wi-Fi and cellular telephony as a combined service offered by MVNOs constitutes a next step towards the vision of a fully converged mobile network where mobile operators themselves are offering voice over a variety of local networks and wide-area networks,” says OptiMobile’s Edman.

The management pieces to achieve such a personalized contentfocused, network-agnostic future may be solvable, but obstacles to completely ubiquitous integrated service do exist, largely in the form of roaming concerns, seamless handoff technology snags and the availability of dual-mode handsets.

Nonetheless, “various groups are starting to come to the table to talk about what the future of seamless mobility means and what it should look like,” says Hanzlik. “Organizations are looking to define standards-based roaming between networks. The user doesn’t care about what it takes behind the scenes, but there’s a real value in the applications and being able to migrate between environments seamlessly, and MVNOs will be wellpositioned in that world.”