In the late 1990’s as the GSM standard was making fast inroads in Europe, Motorola decided to go really big and offer truly global phone service. Thus the Iridium satellite phone system was born with the promise of being able to make and receive calls anywhere on the planet. But by 1999, less than a year after launch of the service, Iridium was in Chapter 11 bankruptcy protection. What went wrong? In part, GSM roaming killed Iridium’s business model.
It turns out that not that many people were willing to pay seven dollars a minute to call from the middle of nowhere. Most people want to be able to make and receive calls from populated areas. GSM roaming allowed the rest of us go global, paying extra only when we needed it while travelling, and GSM handsets provided multi-band connections so that we could hook up to the local network, whatever band it was using.
Fast forward to the advent of smartphones. Early adopters discovered that data could be costly, especially when roaming. But as competition brought in flat rate data plans in home networks, MNOs found that their networks were being loaded with YouTube downloads and other high bandwidth applications that weren’t bringing them any revenue. In fact according to an article in Mobile Europe from September 2010, YouTube accounted for 13% of total global mobile data bandwidth:
Usage of the video site grew 123% in the first half of 2010, having grown 90% in the second half of 2009. The site now accounts for 40% of all video streamed globally over mobile and contributed to mobile video topping the list of applications globally.
The question of “who should pay” has led to a whole Net Neutrality debate which is prickly, cultural and casts the MNOs in the role of bad guys.
Lots of smartphones are already smart enough to jump off the network and onto WiFi when you go home. This is smart in the same way that GSM roaming is smart: you use another infrastructure for a specific need. While this works well for places you regularly frequent, like your home, or a Starbucks, it doesn’t work as seamlessly when you show up in a foreign location. Is it really worth going through the hassle of figuring out the local WiFi codes? Do you just hope that your data plan isn’t super expensive? Or do you just turn off data to avoid any nasty surprises? Any way you look at it, there are missed opportunities.
We’ve teamed up with iPass to offer an alternative: making WiFi roaming work the same way GSM roaming does. If you are in range of an iPass hotspot, it just works. With over 260,000 hotspots around the world, there’s a good chance that you will be near one the next time you are in a hotel or airport, precisely the time when you would like to have fast, reasonably-priced bandwidth.
If the user experience is good, what’s the incentive for the operators, who might view this as simply lost data revenue? The answer is access management and billing. Paying for WiFi usage today is cumbersome for one-time visits, and the MNOs can fix that: they already bill customers.
Here’s Bertrand Leroux, our Roaming guy, commenting on the iPass announcement:
So can WiFi roaming provide some relief for networks by letting the WiFi connections do the heavy lifting, while also providing a fast and convenient service for users? Or will the European Telecommunications Commissioner make good on her threat made on Feb 14th at MWC to end the “current rip-offs” on data roaming charges by forcing caps on roaming rates?