Research by XCellAir, experts in Wi-Fi Quality of Experience (QoE), shows that multi-system operators (MSOs) investing in carrier “Wi-Fi first” deployment strategies outside the home will enable them to compete with mobile network operators (MNOs) for customers — while also saving on mobile virtual network operator (MVNO) partnership arrangements.

Traditionally, MSOs have depended heavily on costly partnerships with MVNOs in order to provide cellular “fallback” to ensure connectivity to customers when Wi-Fi or cable services are unavailable.

XCellAir’s research shows that bringing the Wi-Fi quality of experience closer to that of cellular networks not only allows MSOs to capture new and retain existing customers “beyond the doorstep,” but will also yield a $4.5bn opportunity across the US market.

This opportunity is comprised of $675million in revenue from additional services — better access to video services means better convergence of voice, mobile, broadband and video content, driving uptake of quad-play services and reducing churn. MSOs could also save $3.8billion in MVNO wholesale charges by moving more traffic onto MSO-owned and controlled Wi-Fi networks.

Many MSO services are currently under threat — landlines are increasingly irrelevant to a majority of customers, and packages of TV channels are abandoned in favour of on-demand TV and over-the-top (OTT) services delivered through the MSO’s broadband. Additionally, the ability to charge purely for internet speed is eroding quickly as the net bandwidth delivered is beyond what most services need, while the last “fifty feet” is via an unreliable and unmanaged Wi-Fi service.

Managed and optimised Wi-Fi-first networks that reach the brink of cellular quality will enable MSOs to maintain customer connectivity to high-bandwidth services whether they are in the home or on the move. This provides the MSO a platform to then effectively monetise its investment in Wi-Fi. However, in order to shift the prevailing perception of Wi-Fi as “second best” to “first class,” these Wi-Fi networks must replicate the quality of experience customers are accustomed to — clear HD voice calls, video without buffering, gaming without lag and so on — and are comparable with the capabilities afforded by cellular.

“MSOs would like ‘cable cutting’ to be a fad that will fade as people get older and value convenience more, but this complacency is a huge risk to their business model,” said Narayan Menon, founder and CTO, XCellAir. “By creating a Wi-Fi first service that goes beyond the home and matches cellular networks for quality of experience, MSOs have the opportunity to create a service that will underpin retention of their quad-play customers and will attract more.”

Our analysis shows cost savings make up most of the $4.5bn opportunity, but this is in fact an added bonus rather than the real benefit,” added Menon. “The real value will be the retention, new customers, and increased ARPU from an out-of-home service that can go toe to toe against cellular networks.”

The analysis by Real Wireless and XCellAir is based on a study of 250 live Wi-Fi access points around its offices in Montreal, Canada, modelling common urban scenarios in which public Wi-Fi is in everyday use. The study revealed the underuse and inefficiencies of standard Wi-Fi technology, and where MSOs would otherwise need to focus efforts to create a carrier-grade network. The savings and opportunities available are based on MSOs with a 5% market share across the USA, over five years.

In order to create a service capable of matching the experience of a cellular network, MSOs must plan their networks with carrier Wi-Fi in mind, and automate this network with SON, intelligent load balancing and automated provisioning. While MSOs benefit from Wi-Fi being the primary and most-used mobile connection, it must offer the best connection at all times, including seamless hand-off and authentication to cellular networks when necessary.

XCellAir ensures that operators can offload data to Wi-Fi without affecting the customer experience. It does this by unlocking unused unlicensed spectrum capacity, and tracking and fixing access point-level issues before these affect the quality of service.