Benefits of Wi-Fi and Mobile Convergence Could Change Telecom Landscape

One in four U.S. wireless subscribers would switch cellular carriers for access to the benefits of Wi-Fi / mobile convergence, according to a new independent study conducted by ABI Research and released by the Wi-Fi Alliance. Nearly one in three subscribers would discontinue their traditional home phone service in order to access two of the key benefits of convergence: strong in-home signal coverage and reduced pricing for calls made from home.

Wi-Fi connectivity in a converged mobile phone can offer as much as five times the throughput versus 3G networks, as well as improved indoor coverage. When using a converged phone, the subscriber is handed off from a cellular to a Wi-Fi network when one becomes available. Carriers can leverage Wi-Fi to efficiently manage scarce licensed spectrum resources by allowing subscribers to connect through a combination of licensed and unlicensed spectrum. Carriers worldwide are launching Wi-Fi / mobile convergence service plans which include a combination of benefits including reduced voice and data pricing, delivered over Wi-Fi networks at home and in hotspots.

The ABI Research study, conducted in March 2007, surveyed 1,223 U.S. wireless subscribers from a nationally-balanced and demographically representative sample of adult consumers. Respondents were asked to indicate whether a variety of listed benefits, typical of converged Wi-Fi / mobile convergence phone offerings, would compel them to switch carriers now or in the future. Among the most attractive benefits were:

• Reduced prices for mobile data services at home (25 percent would switch)
• Better signal coverage in my home (25 percent would switch)
• Reduced prices on voice calls made from my home (24 percent would switch)
• Reduced prices for data services at Wi-Fi hotspots (21 percent would switch)
• Reduced prices for voice calls made from public Wi-Fi hotspots (21 percent would switch)

"Convergence presents carriers with a compelling opportunity to build subscriber loyalty and migrate more users to mobile applications such as e-mail, Web surfing, and multimedia downloads," said Philip Solis, principal analyst at ABI Research. "We expect to see a number of U.S. carriers launching convergence programs over the next 12 months."

"It's meaningful, though not surprising, that so many people are interested in Wi-Fi / mobile convergence phones though they are just now becoming available in the United States," said Frank Hanzlik, managing director of the Wi-Fi Alliance. "Wi-Fi technology has quickly become a 'must have' feature for users who value the throughput, affordability, security and ease of use, in addition to the flexibility it brings. When you ask whether they'd like to see it a part of mobile phones, it's an easy decision."

Sales forecasts of converged handsets reflect the anticipation of widespread availability of Wi-Fi / mobile convergence services. ABI Research forecasts that in 2011, more than 325 million converged Wi-Fi / cellular phones will be shipped. This represents a 183 percent annual growth rate from the 2006 shipment total of 1.8 million. Wi-Fi / mobile convergence is expected to be a significant part of the Wi-Fi industry in the next few years, as the industry in total continues to grow at an estimated 25 percent per year.