Demystifying the Wi-Fi calling phenomenon: Part 2
Is Wi-Fi calling really going to disrupt the industry?
Not a “first” for Apple this time
Following the launch of the new and Wi-Fi calling – capable iOS8 by Apple in Q4 2014, there is no doubt that the industry will see a boost in Wi-Fi calling adoption. Some operators have already been experimenting with the offering during the past years. Examples, both available in the US, include T-Mobile offering its “Nationwide Wi-Fi calling service” launched in 2007, and Republic Wireless providing tailor-made Wi-Fi calling offering launched in 2010.
T-Mobile offers Wi-Fi calling at no additional charge on nearly all T-Mobile smartphones
Time to overcome the challenge to deliver a great indoor experience
How should a Wi-Fi calling value proposition be marketed?
Source: Operators’ websites; 1 Includes USA, Virgin Islands and Puerto Rico
Reality is that benefits and capabilities of Wi-Fi calling are multiple, just like strategy options. In one of his recent posts called ’The myth of "Telcos winning back revenue from OTT players"’, Dean Bubley says “if operators want to "regain revenue from Internet players" there is only one way to do it: innovate at a service/application level… and compete”. New services enabled by Wi-Fi calling could be indeed priced differently, and used as a way to increase overall attractiveness of the value proposition and become more competitive.
Does it mean the end of cellular voice revenues?
Certainly not! Operators control when and how to implement Wi-Fi calling. However, as discussed above, enabling Wi-Fi calling is expected to be beneficial for both operators and customers, as it allows for a more optimal infrastructure management scheme, and improves indoor cellular network experience, one of the key problems of operators in urban areas.
In any case, one might expect Wi-Fi calling to accelerate the trend towards “buying the data package and getting the voice for free” that can already be enjoyed in multiple markets such as the US. In the case of more emerging, and prepaid-dominant markets in which this trend is less mature, and/or where the arbitrage between voice and data remains significantly high, one would expect to see it accelerating this shift and leading to uncertain value erosion in an initial phase.
On the other hand, Wi-Fi could act as a catalyst for more and more hotspots to be deployed all over the cities, thus incentivising new players to develop new value propositions to “ride on top” of these larger Wi-Fi networks, and to adopt more aggressive go-to-market strategies. Therefore, it is recommended that the right strategy to deal with these new players is defined in the operators’ agendas for Wi-Fi calling specific initiatives.
1 According to specialised analyses by Spot On Networks, a firm in managed Wi-Fi and in building wireless solution
Alessandra Pelliccia is an Associate at Delta Partners’ Management Consulting division based in Dubai. Alessandra has more than three years of telecom experience in Europe, Latin America, Africa, Southeast Asia, and the Middle East. Her focus includes financial modelling, network, LTE start-ups, LTE commercial and network PMO, corporate strategy and organisation. Prior to Delta Partners, Alessandra was a consultant within the TMT practice at The Boston Consulting Group in Milan.
Lluís Llavina is a Senior Manager at Delta Partners’ Management Consulting division based in Barcelona. He is a telecommunications engineer with cross-functional expertise on strategy and business planning, technical, and commercial areas within the telecoms and digital segments. Lluís has more than five years of experience in business consulting in the telecoms space in the Middle East, Africa, Latin America and Europe. Previous roles include being a Founder, CEO, and Board Member in two Internet/TMT start-ups.
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