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May 20, 2014

Wireless world: telcos invest as we become more mobile

Telstra has announced a massive investment in wireless technology for customers today. Telcos are thinking ahead to a more wireless world.

News that Telstra plans to build a national wi-fi network, as reported by The Australian and Fairfax mastheads, shouldn’t come as a shock. Given the volatility of anything and everything to do with mobile internet use, nothing should surprise us any more. But it should scare you.

Telstra’s plan, which is being announced right on Crikey‘s deadline, will — according to tweets from ZDNet‘s Josh Taylor — reportedly see $100 million spent showering the country with new modems for broadband customers who choose to act as wi-fi hotspots using Fon sharing technology. It’ll be free to use by the telco’s fixed broadband customers, although any data used will count towards their quota, and a “small daily fee” for others.

Arranging free wi-fi for fixed broadband customers is not uncommon in Asian and North American cities, although the Fon sharing is a less common twist, and it’s a logical move for Telstra for the same reasons. It makes the telco’s fixed broadband packages more attractive, it reduces the load on 3G/4G mobile broadband services in high-traffic areas, and — not talked about so much — it provides more opportunities to track customer behaviour for all those data mining and monetisation strategies that make modern telcos into something much more like a media company.

For all the hype around the “mobility revolution”, and while consumers are increasingly using their mobile devices away from the home or office, the growth in Australia’s mobile broadband market was just 3% in the 12 months to December 2013, according to research released yesterday by analyst firm Telsyte.

The proliferation of public wi-fi hotspots, which Telsyte analyst Alvin Lee says are “sprouting like mushrooms and are now widely supported by local councils, shopping centres, local businesses and increasingly our transport networks”, means that there’s less need for a dedicated mobile broadband device — particularly as most smartphones can now operate as a wi-fi hotspot, and people are becoming more comfortable pressing that button.

“The opportunity for dedicated mobile broadband is diminishing even as mobile traffic continues to grow,” Lee said. As a result, Telsyte believes telcos will only be able to monetise 20% of the consumer media tablet market.

Indeed, why would anyone want to load yet another device into their pocket, perhaps with yet another charger, and certainly with another monthly bill?

Whether this will play out well commercially for Telstra remains to be seen. As Fairfax’s David Ramli points out:

“Other Australian companies have attempted to use Wi-Fi hotspots to give customers more internet services on the go with very low success rates.”

iiNet sees its wi-fi offering more as a marketing tool.

My weekend in San Francisco showed how this might play out. AT&T has wi-fi hotspots across the city, and you see their branding every time you look for a connection. It left an impression. But at the same time, most bars, cafes and shopping malls have “free” wi-fi too — along with power outlets and somewhere to sit.

“Free” is in scare quotes there because the use of wi-fi for tracking consumers is becoming ever more sophisticated. Toronto-based Turnstyle is just one of the companies pushing the boundaries in this regard. By rolling out a unified wi-fi network throughout the shopping district, they can track people as they go about their business. As The Wall Street Journal reported in January:

“Turnstyle’s weekly reports to clients use aggregate numbers and don’t include people’s names. But the company does collect the names, ages, genders, and social media profiles of some people who log in with Facebook to a free wi-fi service that Turnstyle runs at local restaurants and coffee shops… It uses that information, along with the wider foot traffic data, to come up dozens lifestyle categories, including yoga-goers, people who like theater, and hipsters.”

If Telstra is planning something similar — and given that this is increasingly the way things are done, I suspect it’s likely — then this could be the start of one of the most comprehensive consumer tracking databases in the country.

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15 comments

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15 thoughts on “Wireless world: telcos invest as we become more mobile

  1. gapot

    Its a scary concept to be tracked by wifi. but with apple find my ipad app the use of this on an ipad without 3g is a concept which worries me.

  2. David Hand

    Oops!
    That $40-60-80bn NBN is suddenly not looking so vital after all.

  3. AR

    So…Bullturn was correct…?

  4. Matt Dalton

    It actually just made the NBN more necessary.

    You will be sharing your ADSL service with whomever is near your house. If they are streaming media, your available bandwidth falls.

    Given that the average broadband connection in Australia is just under 6mbits/s, just one person watching iView or Foxtel Go uses half your bandwidth.

  5. David Hand

    Well Matt that’s true if everyone is downloading mbits in huge volumes in their homes. But the evidence around you is that people are going wireless with their devices. This proposed WIFI network is supposed to relieve demand in mobile data.

    I don’t see how having thousands of km of fibre to homes does anything for the multitude going wireless.

  6. Liz

    The wifi hotspots use existing domestic internet connections, piggybacking on Telstra customer’s home connections. If you have a poor internet connection it could be largely consumed by people accessing it externally. The Telstra scheme relies on good quality domestic internet connections and is a great example of a hidden benefit of a nationwide fibre network such as the NBN.

  7. zoidlord

    @David

    You should actually read some facts.

    Read the ABS statistics.

    ADSL connections rising:
    http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/8153.0Chapter3December%202013

    Data on Fixed-line is rising:
    http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/8153.0Chapter7December%202013

  8. David Hand

    Zoid,
    Both the web pages you pointed to contradict you.
    The first one has mobile and fixed wireless at 1.7% distribution in July 2006 and 49.1% in December 2013.

    The second web page specifically excludes data downloaded by mobile devices, according to the last sentence. This massive growth in mobile data is not going to the thousands of km of fibre the NBN is connecting to suburban homes.

  9. zoidlord

    @David

    I think you are reading the old data from 2006, I am reading 2013 data.

    Mobile wireless:
    June 2013 said 6,150,000,
    December 2013 said 6,040,000 (Down 110,000).

    While Fixed Line data has been increasing through out of 2013.

    DSL: June 2013 said 4,787,000,
    December 2013 said: 4,898,000 (Up by 111,000).

    Cable: June 2013 said 934,000,
    December 2013 said: 944,000 (Up by 10,000).

    FTTP: June 2013 said: 115,000,
    December 2013 said: 167,000 (Up by 52,000).

    Now towards Volume of Data:

    Wireless: June 2013 said: 27,232TB,
    December 2013 said: 37,426TB (up only 10194TB).

    Fixed Line: June 2013 said: 629,964TB,
    December 2013 said: 823,421TB (up massively of 193457TB).

    Also with every other alternative technology (be it Wireless, Sats, FTTN, Cable, etc) requires Fibre to be installed.

  10. David Hand

    Happy with your numbers Zoid and I think fibre is great.
    Mobile wireless accounts for half of all connections. It does not use fibre to the home and it is what Telstra’s new WIFI network will support.

    Of course, all technologies need fibre. They just don’t need it to every home in every suburb of every town and city in the country. Your huge volume on fixed lines is going mostly through ADSL and has more to do with pricing than demand. Telstra’s WIFI will not need fibre in the last kilometre, which is where 80% of the cost of Conroy’s NBN was/is going.

    There’s no escape mate. This new wireless technology shows just how profligate Conroy’s NBN is and in future, that will become yet another financial millstone round the neck of Australian taxpayers as it abjectly fails to deliver the return Labor promised.