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The mobile broadband service provider iPass (s ipas) 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 (s tklc), 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 (s 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 (s wifi) 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 (s cha) 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.