Analysis Cellular operators have been notoriously poor at packaging and marketing their services in an attractive manner for enterprises. This has left them largely outside the inner circle of corporate communications decision making, providing the bit pipe for wireless traffic while integrators and device makers create the systems and gain the ear of the chief information officer.
Vodafone and other major players are desperate to redress this balance and take advantage of the growing trend towards the mobile enterprise to increase their influence, revenues and margins in the business sector. Increasingly, the operators are touting comprehensiveness as their chief appeal to large companies, creating service packages that support mobile workforces by incorporating multiple networks, and multiple territories, in one tariff.
Wi-Fi shifted the goalposts, and raised enterprise expectations of simply accessed wireless data on the move. The Wi-Fi community has certainly not created a perfect system yet, but it has raised users' hopes, with a knock-on increase in expectations of cellular data services and pricing. Operators realize that one way to boost ARPU and enterprise loyalty is to bundle Wi-Fi and cellular services - and in future, others such as WiMAX - into one tariff and, increasingly, one device. T-Mobile has been a trailblazer and others are following suit, aiming to drive a new breed of data-intensive applications within companies that will compensate for the depressing effect that Wi-Fi has had on unit prices for wireless data.
More recently, Finland's TeliaSonera has made a similar move to increase its sales from enterprises, and its strategic position in key customers' decision processes. It will offer a corporate services package that combines all its cellular networks - GPRS, EDGE, 3G and HSCSD - and Wi-Fi into a single plan based on a single laptop card. Customers also get unlimited use of TeliaSonera's HomeRun hotspot network and about 300Mb of data transmissions on the cellular systems. All this will be for one flat price, which will be consistent across all territories where the company operates (Denmark, Finland, Norway and Sweden).
WBA hotspot roaming
While international roaming between Wi-Fi networks is still at an early stage, progress has been, so far, more rapid and less painful than the path to roaming between cellular operators in different regions. A major breakthrough came last week, the biggest ever for roaming deals among hotspot operators in different countries. Five companies in the Wireless Broadband Alliance (WBA) , including BT and T-Mobile, announced a practical scheme, while T-Mobile, once hostile to the concept of roaming, has now signed up additional new partners.
Over a year after its launch, the WBA, an association of telcos that have set up hotspot units, is announcing a series of roaming agreements among its members. Last week, BT said that subscribers to its Openzone service can now access 20,000 hotspots in 11 countries, run by some of the other WBA members.
The other four WBA companies that have joined this round of roaming deals are StarHub of Singapore, Telstra of Australia, Telecom Italia and T-Mobile, which runs public WLans in Austria, Czech Republic, Germany, Netherlands, the UK and the US).
This adds to a roaming deal already signed at the start of the month with T-Mobile, and to existing arrangements with The Cloud in the UK, Telia Homerun in Sweden, Sonera Homerun in Finland and the US' Airpath.
Over at T-Mobile, the US' largest hotspot provider has signed deals that enable its subscribers to access 11,500 hotspots worldwide, doubling the number of countries where its HotSpot subscriptions can be used. In addition to the WBA tie-ups, T-Mobile has also signed up with Malaysia's Maxis Communications and Japan's NTT DoCoMo. Non-US T-Mobile units and its parent Deutsche Telekom of Germany have 4,000 hotspots, while T-Mobile USA has almost 5,000.
WBA users will not be charged extra for the international hotspots for the rest of this year but pricing for international roaming beyond the turn of the year is yet to be determined and is likely to be a thorny issue for the WBA members, and other international hotspot partners, particularly those that operate very different tariffs. European hotspot providers generally charge significantly more than counterparts elsewhere, which could cause problems in roaming tariffs.
Pete Thompson, T-Mobile HotSpot's director of marketing, said in an interview that the WBA has been developing the technical infrastructure to handle worldwide, cross-system roaming, which is made more complex by the right for members to charge their own retail roaming rates. However, he expects operators within a region to set a uniform rate, but for tariffs to vary in different world regions.
T-Mobile USA says international roaming has been a top request in their customer surveys and that, while the average subscriber leaves the US three times a year, there is a substantial group that makes the journey once a month.
Other areas on which WBA members will need to create uniform policy include security. T-Mobile recently pledged to support 802.1x authentication in all its locations but this is not a requirement for WBA participants, although T-Mobile is encouraging others to adopt this technology.
Chris Clark, chief executive of BT Wireless Broadband, said: "It is critical, for the future of Wi-Fi, that major operators join forces to promote and drive awareness of the benefits of using hotspots. This agreement across members of the WBA will help break down the barrier of hotspot locations being linked to particular providers and ensure customers benefit from the geographical strengths of all five operating companies."
While the WBA moves are just a start, and have severe limitations in terms of transparent pricing and multilateral agreements, they do point to the importance of supporting the business traveller if the large enterprise is to be won over.
The cellcos are forming alliances for this purpose too, notably the Freemove grouping of T-Mobile, Telefonica, Telecom Italia Mobile and Orange; and the MMO2- led StarMap Alliance.
The latter has taken one of its first real steps in leveraging its multinational status by saying it will sell member services to corporate customers on an alliance level, rather than on a country by country basis. This means that companies with operations, in, for instance, Spain, the Czech Republic and Germany, could negotiate a single deal covering their employees in those three countries, rather than a separate contract with a carrier in each one. This could significantly simplify administration for large companies and give them a more powerful negotiating position on pricing and service delivery.
Starmap will offer roaming across GPRS data, voicemail and SMS/MMS messaging to help travellers. It will offer discounts to customers that purchase services in four or more countries, and billing management software for clients to track and analyze spending. Such practical schemes should enhance the reputation of the cellcos in large companies and held the Starmap members to compete more effectively with the ability of Vodafone to deliver cross-border enterprise deals.
Simplified purchasing, pricing and usage tracking will be key advantages to large companies moving towards high mobility. In turn, this will accelerate the formation of international alliances between carriers targeting an enterprise base, whether these revolve around cellcos, hotspot providers or - increasingly - multi-network offerings. The upshot will be the creation of an even greater gulf between tier one and tier two operators, with single-country cellcos that fail to get into one of the clubs thrown back on the domestic consumer base with its ever more pressurized margins.
Copyright © 2004, Wireless Watch
Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.
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