Wi-Fi 2.0 Global and South African Market Impact

Despite its humble origins within the office environment, WiFi has become a disruptive technology, having grown by stealth to dominate the global wireless data domain in terms of the number and range of devices in the market, and volumes of data transferred. The WiFi ecosystem has grown because the global and common licence-exempt spectrum has allowed innovative new entrants to offer wireless data products and services outside of traditional telco models. 

The market is driven by a customer appetite for wireless data at lower cost, and supported by a maturing set of technology standards, a prevalence of WiFi-enabled smartphones, the ease of use of WiFi hotspots and the emergence of the Internet of things. WiFi products and service examples are readily available from countries which are well ahead of South Africa in the adoption curve.

Telcos, vendors and service providers are deciding where to invest and how to position themselves in this disruptive, strategic and dynamic market. New players have also emerged who will play a prominent role - content providers, location owners and government delivery functions:

  • Traditional mobile players seek to maintain customer loyalty, plug revenue leakage from smartphones using WiFi, build higher-capacity networks at lower cost with WiFi-handoff and gain a foothold in new markets created by WiFi. To do this, they need deep understanding of the underlying dynamics.
  • Internet-access providers seek to grow the significant opportunity in providing desperately-needed last-mile and local backhaul, increase hotspot coverage and build carrier-WiFi networks from which to offer wholesale and retail services. The opportunities are exponential, but the pitfalls can be deep and caveats abound.
  • Service providers across the value chain, as well as application developers, will seek to position themselves to help build and maintain WiFi networks and provide and develop services uniquely enabled by WiFi. They can participate in the boom of WiFi enabled gadgets, products and services if they have the correct framework to understand the trends.
  • Location owners, from small café owners to hotels are facing hard choices which are beginning to have a more profound effect on their businesses than previously anticipated – if poorly understood or managed.

Governments, in turn, are aware that WiFi can make quick wins to increase broadband penetration and economic growth and are mindful of view that internet access may be seen as a fundamental human right and that WiFi forms a powerful foundation for driving universal service objectives, both in terms of regulatory frameworks and delivery:

  • Policy-makers need to ensure that competition and innovation are sufficiently enabled. They therefore need to understand the appropriate level of regulation to apply to ensure optimal coexistence on the unlicensed spectrum. Regulation levels could range from ‘light touch’ to active setting-aside of new spectrum to be accessed on a ‘managed spectrum’ basis.
  • Governments at local, regional and national level will be challenged by the multiple, pro-active initiatives and calls both within South Africa and globally to provide WiFi as a means to achieving a range of socio-economic objectives.

As with all disruptive markets, there is every chance that new players will read the trends properly and emerge and dominate in a relatively short time frame, whilst others will fail to understand the signs and will fail or lose significant value.

Participants in the WiFi ecosystem seek monetisation models within a space where customers are becoming accustomed to free access. However, a host of new value-delivery models are evolving.

Against this background, BMI-T is conducting a new syndicated study focused on the outlook for WiFi in South Africa and set out to assist and support decision-makers who wish to develop proactive strategies in response to WiFi.

Focus areas and objectives

The research, analysis and report will provide a sharp focus on WiFi as a commercial threat as well as opportunity. The study frames the information within conceptual models and scenarios which make better sense of the emerging trends. Focus areas and objectives include:

  • Unpacking emerging value and monetisation models from the viewpoint of key stakeholders.
  • These models, in turn, inform a set of scenarios, with a range of possible outcomes based on how the interaction between disruptive newcomers and traditional operators plays out.
  • Usage and service models and strategies for WiFi are defined and developed. Predictions are made for the uptake of WiFi in South Africa measured against a global backdrop, including approaches that anticipate Carrier Grade WiFi.
  • Using scenario analysis, we consider the driving forces leading both private and public sector players to support such models, and the underlying corporate and socio-political agendas.
  • Generating market forecasts for WiFi, taking various deployment and uptake scenarios into account.
  • Techno-economic analysis including a view of the spectrum assignments and allocations in South Africa in context of the global deployments of WiFi.

Contextual analysis

South Africa’s mobile industry is unique in its application of globally standardised technology and approach to market demands. The BMI-T approach will be rich in local context with the analysis tailored for the local environment. Aspects that matter to South Africa decision makers include:

  • A scenario model developed by BMI-T to assist decision makers in picturing the possible end-game outcomes of current market dynamics.
  • A value-chain model formulated by BMI-T to capture the essence of the value drivers emerging within the WiFi ecosystem
  • The concepts of free WiFi, affordable WiFi and utility WiFi and how these relate to government, commercial providers and universal service.
  • Policy and regulatory issues impinging on telecoms activities.
  • Spectrum assignment and allocation.
  • Private sector positioning: opportunities and challenges for fixed line operators, IAPs, service providers and start-ups.

International influences and global benchmarks

Although the analysis and report will focus on the local context, cognisance of international trends, norms and developments will certainly have a bearing on decisions made. Accordingly, the research, analysis and report will consider the evolution and outlook for WiFi in developed and developing nations. Areas to be considered include:

  • Global market trends and projections.
  • Underlying demand and uptake drivers.
  • Relevant examples of WiFi initiatives in other countries, especially those which are more advanced in the adoption curve.

Quantitative analysis and forecasts

BMI-T has proven skills in tech-economic and market modelling. For this research a new, custom market model will be built which will be informed by BMI-T’s research into retail internet and data services, wholesale and open access models, wireless network deployment trends, consumer devices, the role of LTE and any other relevant models, against a backdrop of global trends.

Research team

The team for this research includes Brian Neilson (BMI-T Research Director) and Tim Parle (Senior Telecoms Sector Specialist) plus our experienced associate Christopher Geerdts. This team has a combined 60 years’ worth of sector experience in Southern Africa and international telecom markets, including in-depth insight into techno-economic issues surrounding wireless technology, investment cases and telecoms policy. CVs are available on request.

Deliverables and format

The outcomes of the research and analysis will be documented in a narrative report rich with supporting graphics and tables.

A workshop (in Gauteng or optionally in Cape Town) forms an additional output, with supporting PowerPoint deliverable.

Further information

For further information and details on how to subscribe to this syndicated research please contact Anita Matthews on 011 540 8000 or anita@bmi-t.co.za.

For more information on BMI-T and our research and consulting services please visit www.bmi-t.co.za.