The battle for Wi-Fi monetization

Wi-Fi has become a household necessity even for kids as young as four years of age. It is No. 1 method of connecting in the home, at work, and, increasingly, in public spaces. Although Wi-Fi is expected to be free, enterprises, venues, and service providers are working hard to find ways to monetize this amenityVerticals such as retail and hospitality who depend increasingly on Wi-Fi to run their businesses and satisfy their customer needs are now fully embracing innovative ways to leverage their Wi-Fi infrastructure

The last several years have also witnessed the change of the telcos attitude towards Wi-Fi. On the one hand, the mobile network operators (MNOs) have realized that, by offloading a portion of the mobile data traffic and thus embracing high-quality Wi-Fi, they could both reduce their OPEX and improve customer experience with or without unlimited mobile data plans. On the other hand, the cable operators, particularly in the US, are finally in a position to offer viable wireless services and leverage their extensive Wi-Fi and homespot footprint.

In this context, numerous innovations have been implemented in the last few years to improve the end-user experience and to ensure that onboarding is both seamless and secure. In particular, Wi-Fi SaaS vendors have developed different solutions for offloading to roaming and monetization. This report discusses the overall market and technology trends encompassing service providers, enterprises, and venues; however, the primary focus is on the guest Wi-Fi solutions and market size projections.

Indeed, the Wi-Fi software as a service is a rather broad topic in itself. Functions like offloading and roaming have a loose relation to location-based marketing and guest Wi-Fi. Those are different propositions for distinct uses cases and markets. While some players may be participating in both, the dynamics are different and, therefore, projecting their respective markets within a single report is an arduous exercise. Wi-Fi offloading and roaming are sufficiently broad and distinct for their own dedicated report and set of projections. Consequently, the present report provides market projections ONLY for the guest Wi-Fi portion of the business for both telcos and enterprises. While discussing roaming and offloading trends from a qualitative perspective, the report does not include market forecasts for roaming and offloading.

The guest Wi-Fi SaaS vendors have barely scratched the surface of its market potential. According to our estimates, only about 1 million access points are “powered” today with managed guest Wi-Fi SaaS worldwide. The potential is for more than 69 million managed access points by 2023 from 34 million today which could use a SaaS platform but do not

Currently, the guest Wi-Fi SaaS landscape features small vendors with fewer than 300 employees and guest Wi-Fi revenues of less than $10 million each. There is no clear one leader today among the SaaS vendors but the top 3 account for 80% of deployments measured in access points. There are vendors catering to both telcos and enterprises but with limited scale deployments of less than 200,000 access points each. However, the market potential is real with annual revenues from license fees sold to distributors and service providers of $9 billion by 2023.

What is obvious is that this is a volume business above all: the more access points and users using the software, the more licensing revenue. Consequently, the major concern of solution vendors is how to scale—and do it fast before depleting their financial resources.

This report is based on years closely tracking the Wi-Fi industry, speaking to both service providers and solution vendors. Some of the information shared by the providers and vendors interviewed remains under non-disclosure agreement; however, the data and insights shared by these industry insiders were useful to provide a detailed account of the state of the market as well as understand key trends.

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