An Evolutionary Approach to
Wi-Fi Monetization and Offload
Mobile data traffic continues to grow by leaps and bounds, even
threatening to fill the capacity of newly-deployed 4G/LTE networks. As
a result, communications service providers are investigating Wi-Fi as a
potential means of reducing traffic in cellular data networks.
This paper investigates some of the considerations communications
service providers (CSPs) should keep in mind when determining their Wi-Fi
strategy and recommends a proven approach that addresses both shortand longer-term scenarios to help with data traffic and monetization.
Introduction
The extreme growth in mobile data traffic shows no signs of abating. The
popularity of rich-media devices and mobile video is pushing the limits
of data networks, particularly in highly populated areas. And while tiered
data plans have helped slow growth somewhat, traffic is still climbing as
CSPs can add capacity.
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According to the Wi-Fi Alliance®, 2014 was a monumental year for Wi-Fi:
“The wireless technology celebrated 15 years, carried more than
42 percent of the world’s mobile data traffic and 90 percent of the
world’s tablet traffic, and connected users to more than 47 million
public hotspots worldwide. Wi-Fi is on a path to provide seamless
Wi-Fi virtually everywhere, and is pushing the limits of what wireless
technology has traditionally offered.” – Wi-Fi Alliance
Current approaches to monetizing Wi-Fi, however, are still in the early
stages, with many CSPs in the planning or initial trial phase of development
and focusing on deploying networks or finding Wi-Fi partners. This focus on
deployment is often at the expense of customer experience, which means
CSPs may not be able to achieve their strategic goals if subscribers don’t
know when Wi-Fi service is available from their operator or have difficulty
accessing the network. In addition, CSPs that focus exclusively on offload
may miss out on the opportunity to monetize Wi-Fi traffic, and improve the
business case.
The Redknee Wi-Fi Monetization and Offload Solution enables CSPs to use
Wi-Fi to create new revenue-generating opportunities and to provide a
superior service experience to their customers, especially in areas where
good data coverage and bandwidth have been a challenge. In a recent
deployment, Redknee’s Wi-Fi Monetization and Offload Solution reduced
traffic in congested cellular networks by 25 percent and generated a return
on investment in just 12 months.
Whether CSPs are just starting their Wi-Fi network roll-out, or have extensive
coverage, the Redknee Wi-Fi Monetization and Offload Solution can help
achieve business goals both today and in the future.
What’s Driving the Push to Wi-Fi Offload?
Just as every project fills the time allotted, and file sizes increase to fill
available disk space, so it seems that data volumes grow to fill the available
bandwidth. This is particularly true in cellular networks, driven by the
increased popularity of rich media devices such as smartphones and tablets
capable of both viewing and generating bandwidth-intensive content.
So even though many service providers have rolled out – or are in the process
of adding – LTE coverage to their networks, the speed at which data traffic
is growing threatens to overwhelm that new capacity. According to Gartner,
video accounted for 50% of data traffic in 2014 and is estimated to increase
to over 60% in 2018 (Figure 1). Moreover, capacity in densely populated
areas continues to be limited by spectrum.
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100%
75%
50%
50%
25%
0
2014
60%
Video
2018
Figure 1. Growth in Mobile Data (Source: Gartner, 2015)
>> An Inexpensive Alternative
Rather than increasing capacity with costly 3G/4G technology, CSPs are
exploring Wi-Fi as a low cost alternative, particularly in areas that have
large, predictable spikes in peak traffic, such as professional sports venues
or commuter zones.
Many CSPs already have some Wi-Fi infrastructure in place or have established
partnership agreements with Wi-Fi network operators or hotspot providers
to help them relieve some of this traffic, particularly in their most congested
areas. In fact, Gartner forecasts over 13.7 million carrier-grade Wi-Fi hot
spots will be deployed worldwide by the end of 2018.1 This does not factor
in the other 8.9 commerical Wi-Fi hotspots that Gartner predicts will pop
up.
This technology is attractive to CSPs because the free spectrum available for
Wi-Fi is increasing significantly, thanks to the 2013 decision by the Federal
Communications Commission in the United States; Europe is expected to
follow suit in the near future.2
In addition, the industry is rapidly adopting Hotspot 2.0 technology, making
it easier for subscribers to enjoy a seamless Wi-Fi experience and for CSPs to
enter into partner agreements with Wi-Fi network operators, increasing the
viability of Wi-Fi as an option for their data strategy.
Also making Wi-Fi more attractive to CSPs is the fact that traffic can now be
routed back to the operator’s core, allowing Wi-Fi to become nothing more
than a delivery channel, invisible to the user and enabling CSPs to bill for the
traffic as though it was 3G data traffic.
1 Gartner, “Market Trends: Small Cell Infrastructure, Small Cell Deployment Strategies and Real-Time Analytics,”
Report, April 17, 2014.
2 GigaOM, “Europe could follow U.S. in freeing up more 5GHz spectrum for future Wi-Fi needs, August 1, 2013.
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>> Considering All Use Cases and Objectives
A comprehensive Wi-Fi monetization and offload solution, therefore, needs
to provide CSPs with the flexibility to address different business models while
meeting different objectives for their Wi-Fi strategy, whether it be network
cost reduction, monetization, or both. In addition, the solution must be easy
to deploy and not be dependent on the capabilities of subscribers’ devices
to produce immediate results.
Today’s Wi-Fi Strategies:
Not Fully Living up to Potential
While many CSPs have started offering Wi-Fi services to their subscribers, the
technology is often launched ad hoc – as a separate offering with selective
coverage – primarily to help meet one specific business objective, such as
generating additional revenue or alleviating congestion during busy times at
selected sites. Very few CSPs have taken full advantage of the potential of
Wi-Fi by adopting a comprehensive strategy.
>> A Focus on Network Deployment
In their rush to roll out Wi-Fi, many CSPs focus on network installation and
coverage, and have yet to seriously consider service discovery, adoption
and monetization. Instead, the onus is put on subscribers to look for a WiFi hotspot or to go to a specific location – a coffee shop or hotel lobby, for
example – when they want to use their smartphone, tablet or laptop for
high-speed data access that doesn’t count against their quota.
>> Making Subscribers Work for their Wi-Fi
This approach is detrimental to the customer experience for several reasons.
First, subscribers need to be aware of when they are using data-intensive
applications, keep track of how much of their monthly data plan has already
been used, and then figure out if their current usage will fit into their cap.
This is a complex calculation no one wants to perform.
Second, it forces subscribers to seek out a Wi-Fi hotspot, obtain the user
name and password themselves, and then figure out how to connect, all
of which takes time and effort. Third, subscribers might not even be aware
that a Wi-Fi hotspot is available for them to use – possibly one they have
already paid for with a premium plan – and instead use a lower-speed 3G/4G
network that potentially results in a lower-quality user experience and eats
into their data quota.
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>> Missed Opportunities for CSPs
Such an approach is also harmful to CSPs. Forcing subscribers to seek out and
manage their own Wi-Fi access removes the operator from the equation and
makes it impossible to influence subscriber behavior in a way that benefits
their operations. For example, under this hands-off approach CSPs can’t
proactively encourage users to move to Wi-Fi when the network is congested
or to improve the performance of data-intensive services. Similarly, they
are forced to open access to everyone all the time, rather than restricting
precious Wi-Fi resources to their most valuable customers. Similarly, if CSPs
have established partnerships with Wi-Fi network operators that are paid
for on a per-usage basis, having users switch to Wi-Fi networks when the
network is not congested may actually end up increasing costs for the CSP.
With a thoughtful approach, Wi-Fi can become a key differentiator in an
operator’s billing and segmentation strategy. A poorly executed approach, on
the other hand, can push subscribers outside the service provider’s network
when they move to Wi-Fi, which means revenue-generating opportunities
– selling one-time Wi-Fi passes or a Wi-Fi data package, not to mention any
other service upsell opportunity while they’re on the Wi-Fi network – would
be lost, along with the ability to capture and monetize user data behavior.
While some might argue encouraging the use of Wi-Fi costs CSPs revenues
they would earn from overage charges on data plans, consumers have
proven to be extremely averse to these extra fees and, as evident over the
past few years, have been more likely to either cancel their plans or curtail
their data usage, both of which are poor outcomes for CSPs.3
>> Finding Revenue In New Places
As CSPs search for ways to generate more revenue from existing assets, more
are looking to drive revenues through 3rd party partners. By leveraging the
insight gained through subscriber traffic patterns, usage behavior, as well as
the operator’s profile information about the user, the operator can upsell in
real time subscribers (e.g. free Wi-Fi, or location based advertising, coupons,
etc.) while charging interested 3rd parties to deliver the advertising, or
sponsor the usage, models already well proven by the likes of Google and
Facebook.
>> Creating a Win-win
What’s needed is a solution that puts CSPs firmly into the driver’s seat,
with the analytics, and insight to fine tune the strategies, while providing
a seamless and easy-to-use experience to subscribers. Moreover, the
solution has to be easy and simple to deploy without too many external
dependencies, and evolves with the needs of the CSP and subscribers .
3 Fierce Telecom, “Making the business case for mobile data offloading: A service with no downside”,
January 23, 2012.
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Wi-Fi Monetization
and Offload from Redknee:
>> Policy-Driven, Easily Extended
Redknee’s policy-driven Wi-Fi Monetization and Offload solution fits both
the needs of service providers creating new offload strategies using limited
Wi-Fi networks, and those with extensive coverage, either through their
own networks or with partners. With the built-in policy engine, the operator
can quickly re-configure Wi-Fi access rules based on different subscriber
characteristic (e.g. rate plan, total spent, promotion progress). In fact,
access can be granted and taken away situationally based on contextual
information to maximize the ROI, effectively ensuring the most “valuable”
subscribers are given prioritized Wi-Fi access, while reducing unnecessary
costs of moving users off the cellular network, or to a partner Wi-Fi network.
>> Early Wi-Fi Roll-outs
Designed to evolve with the needs of the operator, the Redknee solution
allows service providers with small or initial Wi-Fi deployments to drive Wi-Fi
adoption with a notification-based approach, which can be offered through
the cloud. This creates a low investment entry point that supports the entire
subscriber base without requiring costly and restrictive client deployments
or heavy launch cycles.
CSPs with larger Wi-Fi roll-outs and those wanting a more seamless experience
can deploy the end to end Redknee solution with the pre-integrated client
(or their own proprietary client) to automate the offload process and handle
the transition between hotspots seamlessly and without user intervention.
>> Onboard Partners Easily
Many CSPs will not deploy their own Wi-Fi network, but will instead
engage with Wi-Fi network operators or hotspot owners. In these cases,
CSPs won’t have direct control of those networks and most likely will have
to pay on a per-usage basis. While this approach allows CSPs to avoid the
costs of deploying or maintaining extensive Wi-Fi network infrastructure, it
also removes control of the user experience when subscribers join or use
partners’ networks.
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The Redknee solution unifies and simplifies the subscriber Wi-Fi experience,
even in a multi-provider scenario without the expensive costly integration.
It also has a backend integration framework to support various charging
models.
>> Gain Strategic Insight
Taking feedback from the network and client into account, the Redknee
solution can help CSPs evaluate the success of and fine tune their Wi-Fi
strategy through the integrated analytics platform. The data that are collected
can be analyzed to optimize hotspot rollout and selection by identifying Wi-Fi
hotspots with poor quality of service, allowing the operator to address these
problems promptly. It also enables CSPs to use Wi-Fi offload both to manage
network congestion and to create new sources of revenue by offering tiered
Wi-Fi access packages or by charging for access on a per-use basis.
Gathering Deep Insight from the Handset & Server
True Quality of
Experience
Subscriber
Usage
Performance
Understand user
experience on both
cellular & Wi-Fi at a
granular, access
point/subscriber
level
3rd Party
Pull in 3rd Party data
and correlate with
user data
Figure 2. Indepth Insight
>> Create Alternate Monetization Opportunities
With the client installed in the handset, the operator maintains full visibility
of the user, creating a Point of Presence on the handset. This allows the
operator to monitor subscriber behaviour and correlate this information
with the operator’s own profile information about the subscriber. This allows
for granular targeting of the subscriber, enabling the delivery of advertising
and upsell at exactly the right times and supporting alternative models like
sponsored Wi-Fi.
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Keys to Monetize Wi-Fi
Understand Your
Customers
Identify Real-Time
Upsell Opportunities
Enable Alternative
Models
Maximize Sell
Conversion
Protect/Differentiate
User Experience
Figure 3. Redknee Wi-Fi Solution: Keys to Monetizing Wi-Fi
Case Study –
Supporting Oi’s Virtualization Strategy
>> Background
Oi is a leading provider of telecommunication services in Brazil and, after
the acquisition of Brasil Telecom in early 2009, became the country’s largest
telecommunication company in revenues and South America’s largest fixed
communications service provider in total number of lines in service. Oi
offers a portfolio of integrated and convergent communication products
that include regular fixed and mobile telephony services, data transmission
(including broadband), ISP and other services to homes, small, medium and
large corporate users, government agencies and other telecommunication
companies.
With more than 1,000,000 Wi-Fi hotspots located at airports, hotels,
restaurants, cafés and large sporting venues, Oi had been working to
implement and expand its Wi-Fi network in the lead up to one of the world’s
largest sporting events, the FIFA Football World Cup.
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“As the largest
sporting event in
the world, the FIFA
Football World Cup
represented an
exciting opportunity
for Oi to welcome
many football
fans to Brazil and
provide them with
exceptional service
including free Wi-Fi,”
Eduardo Aspesi,
Segments Director at Oi
>> The Challenge
This year’s FIFA Football World Cup, hosted in Brazil, provided Oi with an
opportunity to showcase its brand to a global audience. With more than
600,000 international visitors projected to attend the Football World Cup,
roaming services needed to be readily available and high quality.
Oi faced the challenge of hundreds of thousands of visitors from around
the world crowding into Brazilian football venues for a few weeks. Without
a competitive advantage in global roaming arrangements, but with an
advantage in Wi-Fi presence, Oi wanted to provide an offer that would
entice customers onto its Wi-Fi networks rather than use data roaming with
a competitor.
>> Redknee’s Changing the Game through Virtualization
With the sporting event just weeks away, Oi’s time to launch was aggressive.
Redknee is commited to its customers and worked with Oi to provide Wi-Fi
data access and offload in just a few weeks. Redknee worked with Microsoft
to launch the solution on the Microsoft public Azure cloud, which enabled
Oi to deploy the solution quickly and launch services into the market faster.
With Redknee’s virtualized Wi-Fi Monetization and Offload solution, Oi
launched its Tourist Wi-Fi, which offered free Wi-Fi access to inbound
roamers on its network, enabling Oi to attract substantial new international
users to its network, and generate new revenue streams from mobile data
usage, voice and SMS usage.
In addition, Oi was able to collect extensible crowd sourced information to
help it identify coverage gaps in the Wi-Fi and cellular network, as well as new
revenue opportunities based on usage behaviour / patterns. Ultimate, this
will go a long way to improving the operational efficiency and monetization
potential of valuable Wi-Fi resources.
>> Utilizing a World-Class Solution
Redknee’s suite of virtualized solutions support CSPs to launch new business
models quickly and effectively to market with a low-risk investment
strategy. With Redknee, CSPs have the flexibility to better monetize their
Wi-Fi investment through innovative offerings, while controlling the
offload experience. Extending on standards-based technology, Redknee’s
end-to-end solution seamlessly transitions the user between Wi-Fi and
cellular connection based on the congestion level of the different channels,
subscriber profile, and even the application being used, based on operator
defined policies, all without the need for expensive Wi-Fi infrastructure
upgrades.
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“Redknee’s ability to
provide a flexible and
turnkey solution was
key to our decision
to select them to
support us during
one of the most
important events of
the year.”
Utilizing Redknee’s cloud-based end-to-end managed solution, Oi was able
to capture new revenue from voice, SMS and data services, increase its
competitive position and drive brand awareness by being the customerfriendly operator for international visitors.
>> The Results
Redknee’s cloud-based solution enabled Oi to benefit from faster deployment
and a lower-risk investment strategy than deploying an on-premise
infrastructure, which often requires significant investment and extensive
lead-time. With Redknee, Oi is able to extend the solution to support
and retain local mobile subscribers, capture additional revenues from
exclusive promotions and offers, and lower CAPEX and OPEX with efficient
offload management, which will provide an optimal balance between Oi’s
investments in Wi-Fi and its mobile networks.
Conclusion
Data in mobile networks is only going to grow, and revenue for that data
is not keeping pace. As CSPs start to build up their Wi-Fi infrastructure to
help lower the cost per bit for data in high-density settings, the Redknee
Wi-Fi Monetization and Offload Solution can help to better monetize WiFi investments while improving the subscriber experience, allowing CSPs to
stay one step ahead of the mobile data flood. CSPs that offer Wi-Fi to their
subscribers without considering the user experience will find the technology
does not meet business or revenue goals.
As with any new technology deployment, business objectives and models
will vary and will evolve over time. This means a simple policy server is not
sufficient, especially at the early stages, to drive the desired user behavior.
Redknee has considerable experience working with Tier 1 CSPs to help
monetize Wi-Fi and to drive adoption. To find out more about how our
proven Wi-Fi Monetization and Offload Solution can produce similar results
for your organization with a complete ecosystem approach, contact your
Redknee sales representative or visit www.redknee.com.
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