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[October 10, 2003]
My Cell Phone My WiFi Why Not?
BY SEAN J. KENT
If you were to ask mobile phone users the question: How should WiFi compliment your mobile phone service?, the response you're most likely to hear, from those who are familiar with WiFi, would be an inexpensive, flat rate, anytime, unlimited calling plan, including nationwide long distance. For mobile users that come into contact with WiFi on a daily basis, the expectation would be that calls over WiFi should be subject to tariffs lower than that of traditional cellular service. In other words, the expectation that the use of the WiFi user's mobile phone within a WiFi calling area, such as the home or workplace, should permit them to preserve their valuable anytime cellular minutes.
Unfortunately, such service offerings are not a very attractive business proposal for mobile operators, especially when you consider that indoor mobile phone usage accounts for a significant percentage of the average mobile user's minute of use. In fact, most mobile operators would view the request to bundle inexpensive WiFi minutes with their mobile phone service as being tantamount to cannibalizing their revenues. If a mobile user is able to purchase a bucket of inexpensive WiFi minutes, or worse yet, an unlimited amount of anytime WiFi minutes, he or she would only then turn around and reduce the number of cellular minutes they purchase with their mobile phone service.
But not to lose hope. There are prescriptions that would permit mobile operators to strike an accord between business objectives and market demand. If an operator were to integrate, position, and price WiFi into their service offerings, they could utilize WiFi to overhaul the cost structure of in-building airtime. This would have to be done in such a way as not to strand existing investments in favor of extravagant capital expenditures. This would satisfy the mobile user's demands for improved indoor cellular coverage and reduce airtime costs. In addition, it would effectively fulfill market demand without sacrificing profit margins. Moreover, the use of dual-mode WiFi/Cellular mobile phones would set the mobile operator on the path to achieving the capabilities required to satisfy market demand for device consolidation. This would increase minute of use, and more importantly, higher average revenues per user for the mobile operator.
Therefore, in conclusion, the convergence of WiFi and mobile phone service holds value propositions for both the mobile operator and its subscribers.
Sean J. Kent is vice-president of product management for Nomadic Wireless Solutions. Nomadic Wireless Solutions is a provider of mission-critical signaling solutions that enable mobile operators to revolutionize the manner in which their mobile telecommunication services are delivered to subscribers. For more information visit www.nomadic-wireless.com
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