Now that Verizon made a deal with Boingo, a deal with Fon in which Fon is installed in their ADSL and fiber connections would be great for Verizon as a company.
First of all, it would lower churn for Verizon as people who have Fon and find Fon when they travel (as it happens in the UK for example with BTFon) tend to continue paying for their broadband even when they mostly travel. Not being at home much is often cited as a reason to interrupt broadband service. Secondly, it would increase ARPU for Verizon because when ATT, Comcast and Time Warner cable users connect to the second SSID of the Verizon WiFi routers, they would make more revenues per ADSL/fiber line as carriers who team up with Fon do. Thirdly it would slow price erosion for their broadband offering as value perception increases in customers who can pay at home and connect everywhere. Other advantages are that the coverage of Fon’s mostly residential wifi network (coming out of residential boxes) would be complementary to Boingo´s commercial network, and Verizon would have an incredible WiFi offering to compete with ATT´s in mobile.
An increasing number of powerful, affordable mobile devices are entering the market and allowing users to run increasingly data intensive applications. 3G makes sense for light data applications such as email and web browsing, but it is not commercially viable for applications requiring large data transfers such as watching movies on smartphones when customers are on flat data plans. Mobile operators can reduce capex on 3G networks and overcome their speed and throughput limitations by offloading data traffic onto wifi networks. This is one of the advantages that E-Plus, the 18 million subscriber German mobile operator, saw in partnering with Fon. Also as an example, AT&T has quickly seen the importance of wifi as part of a good user experience with smartphones, having sold the pioneering iPhone. In general carriers who sell the iPhone see the future of smartphones and it is a very, very data focused future.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars
Comments are closed.