Who’s paying for free Wi-Fi?

Announcing another free Wi-Fi service for a New York neighborhood this week, Mayor Michael R. Bloomberg made an interesting point:

“Keep in mind. Somebody’s got to pay for the Wi-Fi,” the mayor said. “The question is, who?”

In this particular instance, for the Chelsea section of Manhattan, it’s Google footing the bill. According to the New York Times’ Patrick McGeehan, Google has invested about $75,000 to install the broadest wireless network that is open to the public in any neighborhood in the city.

New Yorkers are enjoying a 5-year "free Wi-fi in the park" initiative

Google aren’t the only Wi-Fi philanthropists active in New York. New York City and AT&T have a five-year initiative to provide free Wi-Fi service at 26 locations in 20 New York City parks across the five boroughs. The free Wi-Fi is available to everyone, and Mayor Bloomberg has promised there will be “no ads from AT&T filling up your browser window.”

So why are AT&T and Google paying for New Yorkers’ free Wi-Fi? A recent Amdocs survey into service provider Wi-Fi strategies provides a pointer:

The obvious attraction of Wi-Fi for service providers is that it can help them offload data from their congested networks, but when interviewing 30 service providers from all across the globe, Analysys Mason researchers discovered that service differentiation is the main driver behind operator Wi-Fi strategies.

As Chris Nicoll, principal analyst at Analysys Mason puts it:

“While offload is still a priority, it’s clear that service providers are looking to service provider Wi-Fi as a competitive differentiator.”

Making your Wi-Fi free in 20 parks all over New York City is certainly one way to make sure your service stands out. It also, importantly, lays the foundation for later offering a range of differentiated services over Wi-Fi for a fee, such as tiered services and premium quality of service.

This article by Jeff Barak was originally posted in RCR Wireless.

4 Comments

  1. Lokesh
    Posted January 23, 2013 at 3:46 am | Permalink

    Very True. There is no free lunch :)

  2. Vinil
    Posted January 23, 2013 at 3:58 am | Permalink

    This will lead tough competition among premium Wi-fi service provides.

  3. Yossi Cohen
    Posted January 23, 2013 at 7:18 am | Permalink

    I just returned from a vacation in Barcelona. I used free WI-FI network deployed in wide range of locations in Barcelona. I used it mainly for location based services, which were also for free and accessible to all users. I also purchased a nice mobile application guiding us through the city’s attractions. Can you please elaborate what business case operators can take advantage in this case?

  4. Anoop Ojha
    Posted January 23, 2013 at 10:25 am | Permalink

    Very good article. There is tremendous business opportunity for wi-fi services especially in densly populated areas; where cost of providing service per user is pennies.

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