Wi-Fi Based Mobile Service: the Hidden Potential of Hotspots and OTTs

by Kristen Hanich | Mar. 2, 2016

I've been doing a lot of research into Wi-Fi based phone plans recently. They're a service that some 70% of broadband households are interested in - which is not a surprise, given that most consumers use less than half of their cellular data plan.

These plans make use of a collection of private and public WiFi hotspots in order to provide voice, text and data services. Some plans supplement hotspot access by pay-as-you-go cellular data. Current plans are offered by service providers such as Cablevision, Republic Wireless, and Ting. These plans often start at $10 per month - much lower than the $50 average for cell service.

But... One question I keep coming back to is - just what makes this any different from a regular Wi-Fi hotspot plan? Companies such as Boingo Wireless already offer subscriptions for consumers to access their WPA-2 encrypted networks, and ISPs like Time Warner Cable offer their own secured hotspots to their broadband customers. Sure, they're not offering a phone number for calls and texts - but with OTT services like Skype and messaging apps such as Facebook's WhatsApp, does anyone really need that anymore?

Of course, coverage areas may vary. But with the Cable WiFi Alliance and its members offering internet customers access to over 400,000 Wi-Fi hotspots, the situation is certainly improving. Someone can easily get by in major cities, and just pop in a prepaid data SIM card when outside their area. Given the rumors that Comcast is looking to purchase wireless spectrum licenses during the FCC's auction later this month, we may even soon see the beginnings of seamless Wi-Fi first data coverage - depending on what the company chooses to do with it.

Consumers can potentially save hundreds of dollars each year by cutting out cell service and using the hotspots already available to them through their broadband provider. Savvy broadband providers could use this to upsell their pricier internet plans, making up for some of their cord-cutting losses. Providers with MVNO agreements or wireless spectrum could sell internet and mobile data bundles, capitalizing on the market's shift away from traditional phone services and the growth of the smartphone as a data-driven computing device.

It seems that broadband providers already have the networks in place to take advantage of the appeal of Wi-Fi based phone service. They even have the opportunity to capitalize on some of the OTT services, such as Skype, to avoid the need to build their own infrastructure for mobile voice and text. They just have to market it first.

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