At The Cable Show here this week, Wi-Fi was part of nearly every discussion. During the keynote address yesterday NCTA Chairman Michael Powell positioned the cable industry's Wi-Fi footprint as a competitor to wireless carriers when he spoke with FCC Chairman Tom Wheeler. And Wheeler agreed, noting: "Wi-Fi offers new opportunities in broadband and high speed data as well as voice service."
Likewise, Comcast (NASDAQ: CMCSA) Chairman and CEO Brian Roberts claimed that his company is the "biggest wireless provider in the country already," and said that the convergence of Wi-Fi with the cable network is a powerful tool that will be very important in the future. "It distinguishes us from the competitors and gives us a better business," he said, during the keynote panel session.
But what exactly do the cable MSOs have up their sleeves when it comes to monetizing their growing Wi-Fi footprint? When I walked the show floor and met with a few companies, I heard some interesting theories.
For example, Scratch Wireless CEO Alan Berrey is hoping to attract the attention of cable MSOs that might be interesting in marketing his wireless service to their customers. Scratch operates as a Sprint (NYSE: S) mobile virtual network operator, but considers itself a Wi-Fi first mobile service provider. In other words, customers primarily use Wi-Fi for their mobile calling and mobile data needs and only fallback to Sprint's 4G network when there are no Wi-Fi hotspots available.
Customers are not charged when they use the Wi-Fi network for their mobile calling and data, and Berrey said about two-thirds of his customers have free service every month. The remaining one-third end up on Sprint's network and are charged a premium price for those data and voice minutes.
Berrey believes his company is a natural partner for the cable companies as they could resell Scratch's service to customers as an add-on benefit of the Wi-Fi hotspot coverage. Although Berrey admits that the cable companies could follow this same model without partnering with Scratch, he said that Scratch already has the back office systems in place as well as the relationships with Sprint and the device makers.
Another potential monetization scheme is for the cable operators to market their Wi-Fi hotspot network to non-subscribers and roamers. For example, the CableWiFi Alliance could offer day passes or monthly passes to non-cable subscribers that would like access to the hotspot network. In addition, they could also partner with hotel chains or coffee shops to provide Wi-Fi access at those venues.
Billing and OSS firm Amdocs said that it is currently working on Wi-Fi monetization schemes with its cable partners, and this hotspot network model is generating a lot of interest.
And finally, the wireless operators may be a lucrative potential market for the Wi-Fi network. Many wireless operators are currently in the midst of making their networks denser by adding small cells. However, one of the challenges of deploying small cells is the backhaul. With cable's growing Wi-Fi footprint, cellular operators may be able to use those hotspots as a small cell backhaul alternative. Of course, that would require the cable companies to partner with the cellular companies, which may be difficult of wireless companies see cable companies are a growing threat.
The cable operators have invested a lot of time and money into growing their Wi-Fi networks. It's only a matter of time before they come up with a way to monetize this important asset.--Sue Marek, Editor in Chief