Amenity WiFi: Latin America’s biggest wireless network

Article abstract

Over 900 million smartphones will ship this year alone, and data traffic is growing faster than mobile operators can handle. WiFi networks can handle the demand. Today, free WiFi is available at cafés, bars, shopping centres, sporting events and, increasingly from municipalities and mobile operators. These free and public networks, can soon handle much of the growing demand with minimal impact to cellular networks. Latin American operators can immediately leverage existing networks of WiFi hotspots to offload data.

 

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One wireless standard that you can find throughout Latin America, in fact worldwide, is WiFi. Consumers and mobile operators alike turn to WiFi as both a way to get connected to the internet and to increase network capacity. As a result, WiFi’s growth has been unprecedented, driven by the proliferation of smartphones and tablets, and increased consumption of mobile data. Vendors will ship over 900 million smartphones this year alone, according to an IDC report . And with data traffic projected to reach ten exabytes per month by 2017 , the need for WiFi networks to handle demand is unquestionable.

Smartphone growth and rising data usage pose huge challenges in densely populated urban centres where connectivity is vital to business and the local populace. Consider Curitiba, Brazil, with a population of more than 1.7 million. A mobile operator needs approximately 600 cellular base stations to cover a city of this size with a suitable layer of capacity. However, as data traffic increases at normal rates, this network would soon become congested. Operators might add small cells or resort to cell splitting to increase capacity, but this approach becomes cost prohibitive. An increasingly attractive alternative would be to tap into the vast amenity WiFi network that already exists, but is currently underutilized. Such shared WiFi networks—offered by venue owners to their customers—are naturally found where people congregate. In Curitiba, amenity WiFi hotspots measure in the tens of thousands, offering two orders of magnitude more capacity-reach than a typical cellular deployment, plus the possibility of providing plenty of capacity to easily meet growing demand.

In Latin America, as in many regions globally, amenity WiFi can be found at high-traffic areas such as airports, libraries, cafes, etc. One would also find WiFi hotspots in retail chains like Starbucks and McDonalds. In Brazil, it has been reported that over 14 per cent of the country’s 5,500 municipalities offer some level of free WiFi. Only 140 cities offer full WiFi coverage.

The ubiquitous nature of WiFi in Latin America and worldwide has afforded smartphone users the luxury of on-demand data usage. Whether for internet browsing or streaming entertainment, amenity WiFi lets users experience a consistent level of service using their mobile devices, while expanding the network capacity-reach for local operators.

Latin American mobile operators embrace WiFi
The explosion of amenity WiFi in Latin America has not gone unnoticed by the region’s mobile operators. In fact, they are currently evaluating the value of WiFi and how it can enhance their business models. In countries such as Mexico and Argentina, operators contend with both high rates of smartphone adoption from feature phone conversions as well as the acceleration of wireless network growth. Approximately 14per cent of Brazil’s population of 194 million people own smartphones, and the number grows steadily every day. With the 2014 World Cup and 2016 Olympic Games both taking place in Brazil, billions of dollars are being invested in network infrastructure, including a portion allocated for WiFi deployment.

To handle their capacity needs, different flavours of WiFi solutions are being considered by the region’s largest mobile operators. Some operators partner with WiFi aggregators to offer commercial grade WiFi or install their own WiFi, known as carrier-deployed WiFi. For example, TIM Brazil announced last year that they plan to deploy 10,000 hotspots throughout São Paulo and Rio de Janeiro . NET, owned by America Movil, plans to have 10,000 hotspots in 15 cities by the end of 2013. High-density areas would benefit greatly from these operator initiatives, but to build out a proprietary network is costly and time-intensive as compared to utilizing the network of amenity WiFi that’s already in place.

The challenge with leveraging amenity WiFi is the uneven quality levels across individual hotspots, and, until recently, a lack of an automated and scalable curation service that delivers a quality-controlled version of this massive resource. While mobile operators can benefit greatly from shifting some data traffic from cellular to WiFi, their subscribers expect an “always-best-connected” experience. When on WiFi, mobile users should experience a similar or better quality connection and data speed than they would on the operator’s cellular network. When operators look to utilize amenity WiFi, they should consider the quality of the WiFi they offer their customers and ensure that it meets their standard for user experience. Solution providers that offer a ‘curated’ selection of the amenity WiFi in a given area can actually help operators to elevate the customer experience by proactively testing signal quality in real-time and only delivering the most validated amenity WiFi networks for connection.

Long-Tail retailers are leading purveyors of amenity WiFi
An important KPI to understand the potential of amenity WiFi is the open network ratio, which is measured by Devicescape as part of its Curator Service. This measures the ratio of open networks to the total number of networks in a particular region, including those that are locked down and inaccessible. For example, the open ratio in the U.S. is 32 per cent, while the average in Europe is only approximately 18 per cent. The open ratios for the largest eight countries in Latin America are provided in figure 1. Venezuela measures 28 per cent, which is similar to the U.S., whereas the rest of Latin America resembles the WiFi openness of many countries in Europe. Interestingly, the open WiFi network ratio is not correlated to the development of a particular country but is more related to local customs that evolve from the composition and competitiveness of business owners.

Large-scale deployment of WiFi in Latin America is already taking place, but not solely by the mobile operators. Long-tail retailers—small and medium-sized businesses—have incorporated amenity WiFi in their venues for customer use. This increased investment in WiFi is spurring business owners to offer free connectivity to enhance customers’ in-store experience. In fact, WiFi offered as an amenity, rather than a pay-as-you-go commercial service, is fast becoming the norm. The benefits are multiple for venue owners: broadband connectivity provided for customers, website or app purchases on customers’ mobile devices, and market offers or promotions targeted directly to consumers in the venue. The benefits to the consumer include an enhanced retail experience and constant connectivity. According to a recent Deloitte study, ‘The Dawn of Mobile Influence,’ people who use their smartphone in a retail location are 14 per cent more likely to make a purchase there. And if they visit the store website or app while inside, the likelihood of a purchase increases to 33 per cent.

In the past year, free WiFi has come online at a growing number of venues. Cafés and bookstores have been adding free WiFi for years, but it’s now commonplace to find restaurants, and bars that offer free WiFi for their patrons. Small businesses everywhere are finding that free WiFi is not only inexpensive to add, but also much appreciated (and sometimes even expected) by customers. Hotspots are typically deployed by small venues in a managed or unmanaged fashion. For example, service provider Oi WiFi has over 100,000 hotspots in its network . These hotspots are located all over Brazil in venues such as coffee shops, hotels and airports. Venue owners employ Oi’s service to manage their WiFi offering to customers. To access this free WiFi, users typically navigate a portal or page to access the internet. In an unmanaged location, amenity WiFi is solely managed by the venue owner. Access is typically granted by requesting hotspot credentials from the manager or by viewing a posting within the store with the access information.

In a Cisco-led survey of Mexican wireless users , smartphone owners access WiFi 40 per cent of the time to connect to the internet. More than 80 per cent of respondents take advantage of public hotspots weekly. According to this Cisco report, Mexico expects to see a 23-fold increase in mobile network traffic from 2011 to 2016. Telmex, the country’s largest wireline operator, sees WiFi as a value-add to its users and currently has over 5,000 free hotspots located at airports, parks, cafes, and other locations around the country.

Indoor WiFi Networks Need Improvement
Beyond cafés/restaurants, hotels, and airports, amenity WiFi is being deployed by major retail chains and large venues. For example, in preparation for the World Cup and Olympic Games, Brazil is quickly deploying public WiFi in locations that are predicted to be severely impacted by high data usage. The twelve soccer stadiums being used for the World Cup will all have hotspots for public use. According to SindiTelebrasil, a telecom trade union, 30-40 per cent of data traffic will offload from 3G/4G networks around the stadiums through the indoor WiFi networks.

Indoor WiFi coverage is a key concern, especially with these upcoming sporting events. 4G service is available, but it is still limited in terms of widespread coverage, particularly indoors. The need for reliable indoor WiFi is a priority for an optimal user experience. Large shopping centres, normally hotbeds of amenity WiFi, will require quality indoor coverage.

Today, amenity WiFi is more than a trend offered by small venues like cafés and bars. Amenity WiFi is emerging as a standard offering from large and small businesses, municipalities and mobile operators. Amenity WiFi in Latin America is poised to address the rapid growth of smartphone use and demand in data. With the rise of these free and public networks, streaming rich content, data-intensive applications, or constant internet use can soon be handled with minimal impact to operator cellular networks and customer data plans. Latin American mobile operators can immediately experience similar mobile data offload rates common to U.S.-based operators not by building out their own networks, but by leveraging a network of curated WiFi hotspots that already exists.