The Key Role of Wi-Fi for Profitable Mobile Networks


Wi-Fi connectivity is now sought and expected everywhere by users of mobile computing devices. Mobile network operators and their network partners must therefore come to terms with customer preferences and make Wi-Fi part of their offering too as discussed in my previous blog. A white paper from connectivity provider iPass entitled “A Wi-Fi-first Strategy for MVNO Revenue Growth” positions Wi-Fi as not only necessary, but also as the solution to current growing pains of mobile virtual network operators (MVNOs). In addition, Wi-Fi connectivity can also help MVNOs and their providers, the mobile network operators (MNOs), to play nicely together in the market.

More MVNOs, More Wi-Fi, More Price Pressure?

The MVNO sector, which repackages and resells network capacity from the MNOs, already accounts for 10 to 15 percent of the mobile subscriber base in mature markets. The number of MVNOs rose by 70 percent in the period 2010 – 2015, with mobile traffic increasing to 7.2 exabytes per month at the end of 2016, an increase of 63 percent during the year. Yet as iPass points out, consumers are also demanding higher data transfer speeds and lower prices, with unlimited data transfer into the bargain. In addition, consumers are making significant use of Wi-Fi connectivity to avoid spending their mobile subscription allowance. In 2016, mobile users spent more than 50% of their time on Wi-Fi, rather than 3G or 45 mobile networks.

A Three-Part Strategy for Profitability

The business model for MVNOs could therefore be challenging. Low entry barriers mean new entrants continue to arrive, while end-customer pressure on prices and performance threatens margins. The suggestion for staying afloat, or even improving profitability, comes in three parts:

  • Expand the market. The enterprise market is singled out as particularly attractive, with requirements for mixed mobile/Wi-Fi communications in a secure environment.
  • Deepen relationships with MNOs. Simply selling excess capacity of MNOs is no long-term strategy for survival as an MVNO. Helping an MNO reach niche markets of interest adds more value to the relationship.
  • Offer customers more value. Tailored bundles of services and devices can help an MVNO win the patronage of more customers.

The Contribution of Wi-Fi Connectivity

The addition of Wi-Fi then allows the MVNO to:

  • Complement conventional mobile network services, offer higher data-rate performance, and address markets with growth potential, such as the enterprise market.
  • Bring the providing MNO additional traffic that might otherwise have escaped it, also positioning the MVNO as a partner, rather than as a competitor for traffic.
  • Develop new services for the MVNO and its business partners to offer the MVNO Wi-Fi customer base. 

Keeping Wi-Fi Deployment Costs Down

Naturally, building Wi-Fi into the offering of an MVNO has a cost. The MVNO can avoid the sizable expense of installing and operating infrastructure by acting as a virtual Wi-Fi network operator, acquiring its Wi-Fi capacity from a Wi-Fi operator in a similar way to its supply today of its mobile networking capacity. A further suggestion from iPass is to use Wi-Fi connectivity as a selling point to convert low revenue, low-loyalty, pre-pay consumers to continuing subscription plans. In the case of AT&T for example, as long as the cost of Wi-Fi wholesale remains lower than cellular data (25-50% lower), the model works and AT&T plans to expand both their footprint as well as the adoption of Passpoint profiles into client devices especially on iOS. AT&T has their own application needed to discover and authenticate into partner Wi-Fi networks.

Extending the Business Model

MVNOs could also boost margins by copying tactics of other providers of Wi-Fi connectivity, including locations such as stores, restaurants, and hotels offering free guest Wi-Fi to their patrons. These businesses have long since realized that their customers are attracted by Wi-Fi connectivity as an amenity in the establishment, but do not want to pay for it. Instead, the expense is amortized and the Wi-Fi service monetized by adding informational and promotional content to the Wi-Fi connections. Advertising is a candidate for the consumer market, with ad space in the Wi-Fi connection also sold to MVNO business partners. Enterprise markets may support better margins in any case, or allow for monetization through additional content insertion and other services offered by the MVNO.


Wi-Fi first strategy will help MVNOs differentiate their services, engage better with their markets, and add value, leveraging the fact that mobile users are already keen users of Wi-Fi connectivity. User experience will be an important factor for consumers and business users, as will security of connections. An MVNO will therefore need to ensure it meets needs at all levels. It must provide a Wi-Fi service that will meet user expectations (performance, availability, security, unlimited data) and allow attractive user pricing overall (per mobile/Wi-Fi plan offered). In parallel, the Wi-Fi service must be easy to integrate with existing mobile networking, so that it can finally offer overall profitability to the MVNO.

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Mr. Fellah, is a Senior Analyst and founder of Maravedis with 20-year experience in the wireless industry. He authored various landmark reports on Wi-Fi, LTE, 4G and technology trends in various industries including retail, restaurant and hospitality. He is regularly asked to speak at leading wireless and marketing events and to contribute to various influential portals and magazines such as RCR Wireless, 4G 360, Rethink Wireless, The Mobile Network, Telecom Reseller to name a few. He is a Certified Wireless Network Administrator (CWNA) and Certified Wireless Technology Specialist (CWTS).


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