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Summary:

On Tuesday, iPass introduced a new Wi-Fi roaming service that is one of many data points in Wi-Fi’s slow transition from home networking tech for geeks to must-have for every mobile device to perhaps another source of carrier revenue. Will carriers charge for Wi-Fi?

wi-fi-networks

The mobile broadband service provider iPass has created a new service offering for mobile operators that allows them to offer the equivalent of Wi-Fi roaming, a key element to enabling carriers to charge for access to ubiquitous and quality-assured Wi-Fi. The new iPass service, called the Open Mobile Exchange, is only one of many data points in Wi-Fi’s slow transition from home networking tech for geeks to must-have for every mobile device, to perhaps another source of carrier revenue.

In the coming year, Wi-Fi will become a different animal than what we currently know and love. Thanks to carriers getting more involved in using Wi-Fi for network offload — as well as more devices seeking a Wi-Fi signal — this hippie technology is about to get the layers of security, authentication and manageability once reserved for cellular networks.

“Wi-Fi is just in this second renaissance,” iPass’ CEO Evan Kaplan said in an interview. “People are building out Wi-Fi like crazy, and it [has] become a viable network for carriers and changes the industry landscape and allows them to offer service they can’t get their with licensed spectrum. There is a recognition [among carriers] that there is a role for Wi-Fi, and certain mobile services should not go through the 4G core.”

Kaplan anticipates that in the next four to five years Wi-Fi will become a carrier-dominated phenomenon. Of course, Kaplan is pitching his new service, which acts like an authentication and billing layer between Wi-Fi networks and enables carriers to track and charge those who roam onto Wi-Fi networks much the way data roaming happens today. It’s an awesome concept, but it has a downside for consumers: This level of service won’t be free.

Despite his interest in carrier-dominated Wi-Fi, Kaplan isn’t alone in his views. Ronald J. de Lange, the CEO of Tekelec, a company providing carrier gear, believes that Wi-Fi is here to stay, and that carriers are looking for ways to ensure reliability and track it across their networks. He sees an opportunity for startups — such as WeFi and Skyhook, which are building Wi-Fi databases — to offer services that carriers will pay for as they seek to implement roaming and perhaps charge their end users.

It’s hard to imagine a carrier like AT&T,which operates its own Wi-Fi hot spot network, will suddenly charge users for a service it currently provides as part of its mobile broadband (and wireline) service. But once roaming is widely implemented, it could charge users a fee for access to international hot spots. Under that scenario, AT&T gets new revenue, and so do potential roaming partners AT&T could end up paying for the privilege of its subscribers roaming onto their Wi-Fi networks.

It’s also likely that other providers who aggregate services, such as Boingo or even startups such as Macheen, will gain traction as Wi-Fi becomes more integral for connectivity and thus, worth more to consumers. Even if folks don’t pay a carrier, they may pay someone be it a service like Boingo or even a retailer or device maker selling a service created by iPass or Macheen.

Even if carriers can’t find a way to milk better Wi-Fi, Kaplan is right: Wi-Fi is hot, and carriers are interested. Just last week, KDDI announced that it will build 100,000 hot spots, and earlier this year China Telecom said it would deploy 1 million. Kaplan said iPass currently authenticates users across more than 500,000 hot spots: a number Kaplan expects to rise to seven-hundred-something thousand by the end of this year.

So now that Wi-Fi is clearly hot and clearly necessary, we’ll see carriers try to monetize it. Get ready for carrier-grade Wi-Fi and a new sales pitch.

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  1. How long do you think it will take ATT and VZ to lobby state legislators (like those in Texas) to outlaw private wi-fi networks in areas where carrier networks are present? I mean, some states already have laws that prevent municipalities from offering fiber service, why not prevent consumers and coffee shops from operating wi-fi networks? Or do you think they will just accomplish this by inserting a clause in their DSL contracts that prohibits connecting a wireless network to their DSL- or fiber- (as if they will build that out) connected LANs?

  2. Wifi is a great technology, Its very easy to setup and access wifi connection if you have a proper signal strength, Its preferable to get connected to wifi rather than carrying a internet usb drive or a fixed desktop connection…Lets see how the players play with this amazing technology…

  3. Smart Mouth Mobile is building an entire network that works via WiFi – unlimited calling and texting plus much more – even turn an iPod into a phone with the social networking and communications apps… Already available in iTunes – Android and Blackberry out within days

    1. Stacey Higginbotham Ethan Wednesday, July 6, 2011

      Ethan, so it’s a VoIP network? I’m curious to know more.

      1. Looks like it’s just an app to me.

  4. Interesting article on WiFI.

  5. An alternative to the poor quality copper delivery method in the UK is definately needed. Can we really depend on a packet delivery method that is prone to interference from a simple generator. I can see Qos and latency being issues for voip as well as handover whilst roaming issues. Of course the service providers will price around this. Those that will benefit will from this new service appear to be the networks that have reached capacity. As usual the infrastructure grows at the expense of quality.

  6. Richard Bennett Wednesday, July 6, 2011

    Wi-Fi is an easy way to make use of 633 MHz of spectrum, more than twice the amount of licensed mobile spectrum. It’s obviously a nice fallback for overloaded mobile broadband, but the mobile operators figured that out a long time ago.

    AT&T already runs the largest Wi-Fi network in America, and they support it out of an office in Austin.

    1. I’m curious how you came up with a Wi-Fi spectrum of 633 Mhz. My math results in 714.5 Mhz:

      ISM 902-928 26 Mhz
      ISM 2.4000-2.4835 83.5 Mhz
      ISM 5.725-5.875 150 Mhz
      UNII-1 5.150-5.250 100 Mhz
      UNII-2 5.250-5.350 100 Mhz
      UNII-2ext 5.470-5.725 255 Mhz
      TOTAL 714.5

      I left out UNII-3 because it’s 100 Mhz of bandwidth fits inside the upper ISM band. Anyway, not to be a nit picker but there’s always the possibility I could be wrong, so if I am, please let me know.

      Cheers!

      1. I’m using the US allocations, so I included the 802.11y stuff at 3.6575 – 3690, didn’t included the forbidden parts below 5.180 or the 902-928. 633 is too precise a figure, so I’m going to use 600+ in the future so we don’t have to go country-by-country.

  7. I think its time for Network connectivity to become free or a flat rate charge. I know its a radical concept. This can transcend all the stupid nickle and dime games that carriers and ISP’s are playing.

  8. When they talk about roaming, I don’t think they are talking about seamless connection handoffs between APs, I think they just mean being able to use any AP in the system. Also, this sounds exactly like WISPr which is nothing new…

  9. Thing about wifi is, that in the coming years, it is going to face difficulties from mobile broadband services, one has to find a way to give out wifi services at a near free of cost if they wish to sustain.

  10. WiFi technology is one of the most explosive markets in the world today and it will be one that opens up life changing products and services to consumers. Smart Mouth Mobile is releasing three mobile apps that function on iPhone, iPad, and iPod Touch as well as all Android and Blackberry devices that will give subscribers unlimited international calling for only $19.95 per year….

    Wake up wireless carriers, these guys aren’t just knocking, they’re banging the door down.

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