Wifi Revolution

A recent study from market research firm In-Stat (News - Alert) shows that although there is strong interest in 3G services, such as mobile VoIP, among consumers, a general lack of availability of dual mode (WiFi (News - Alert)/cellular) handsets could slow adoption of these services.

The study finds that while interest in next generation wireless technologies, such as mobile TV and high speed wireless Internet, is quite high, there aren’t enough dual mode phones on the market to help stimulate this interest. Furthermore, the study finds that most consumers want next generation wireless services everywhere they go – not just when their phone happens to be in a WiFi “hot spot.” Although many service providers are now offering “quadruple play” (Internet, TV, fixed line phone and wireless phone) packages – and are often providing WiFi coverage inside the user’s home for free – that hasn’t been enough to get consumers to run out and buy “dual mode” phones, which tend to be more expensive than regular cell phones, and switch their service plans. Even “seamless handover” (i.e. fixed mobile convergence) between cellular and WiFi networks - an advanced new capability – hasn’t been enough to lure most consumers away from conventional cellular service.

Adding to this is the fact that many consumers are aware of emerging technologies such as “femtocells,” which will facilitate high speed wireless broadband without the need for separate wireless technologies such as WiFi. As pointed out by In-Stat Analyst David Chamberlain in a press release, “femtocells don’t require specialized cellular handsets,” which means consumers can continue to use their present handsets and still gain many of the new features afforded through 3G networks. With so many new wireless technologies (WiMAX, EV-DO Rev. A, WCDMA) now emerging, many consumers are taking a wait and see attitude - and many seem to be holding out for a new standard in cellular technology that will be capable of delivering next generation services ubiquitously to all handsets.

In-Stat’s research finds that although “home zone” billing plans – which combine mobile phone, landline phone, television and Internet services all onto one bill – are going to be popular among consumers, they will tend to be more popular among “low usage” wireless customers, compared to “high usage” wireless customers. The challenge for service providers, therefore, is how to target the “low usage” market and get those consumers to switch over to these new, bundled services.

In addition, the research finds that “wireless and fixed-line carriers must forge alliances in order to provide converged services and billing.”

The study, entitled “Consumer Demand for Cellular/WiFi Services,” is available at http://www.instat.com/catalog/Wcatalogue.asp?id=231.

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Patrick Barnard is Assignment Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.

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