Business Models Enabled by Heterogeneity

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The introduction set out a picture of the wireless world, in which many types of spectrum and network increasingly work together to create a seamless pool of capacity for service providers, enterprises and consumers to use. That may still be a dream as yet, but important steps are being taken towards it, and these see Wi-Fi playing a significant role in the heterogeneous network (HetNet).

In a study conducted by Rethink Technology Research in 2016, it emerged that over two-thirds of mobile operators, over half of MSOs and almost half of pure-play IoT providers expect to be using at least two – and often three or four – different wireless technologies to deliver their services by 2020. While the cellular solutions clearly remain the preserve of spectrum owners, unlicensed options will be widely adopted and combined. In Wi-Fi’s case, two-thirds of MNOs and of pure-play IoT operators expect to have HaLow and/or local area Wi-Fi in their IoT HetNet, while 78% of MSOs will do the same.

These increasingly heterogeneous networks will not only be justified by efficiencies of cost, spectrum usage and capacity, though those factors are important. More significantly, they must enable the operators to support new revenue streams and business cases, directly or with partners.

The Internet of Things is clearly an area with particularly high potential to deliver new services and revenues.

However, precise timescales and return on investment (ROI) models for some IoT applications remain uncertain and most providers, apart from pure-play M2M companies, will aim for a staged approach. They will first use improvements to their networks and platforms to enhance their traditional business cases, in areas like broadband access and voice; to add incremental services to existing customer bases such as enterprises; and then to reach out into entirely new markets.

These four stages are summarized in the figure below, and are driven by the four stages of evolution of Wi-Fi and unlicensed spectrum technologies, from best effort, to intelligent and integrated, to carrier-grade, to massive in terms of capacity, coverage and connections.

The four stages of Wi-Fi network evolution and accompanying business phases

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At any one time, then, there will be business cases for unlicensed spectrum which will be mature, rapidly growing, or just emerging, depending on factors such as technology advances, regulatory change, shifts in user behavior and so on.

To learn more about emerging business models, join us at the Innovation – Services and Business Models Session on November 16 at 2:30 PM at the Wireless Global Congress in San Jose which I will be moderating an exciting group of panelists! 

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