Mobile customers of Canada’s four major mobility service providers will have greater freedom in the use of their Wi-Fi-enabled devices after the firms hammered out an interoperability agreement last month.
Bell Mobility, Microcell Solutions, Rogers AT&T and Telus Mobility struck an agreement to make Wi-Fi interoperable in Canada. The four carriers have agreed to co-operate to develop technical standards, which will allow customers transparent access to any of their networks, said Peter Barnes, president and CEO of the Canadian Wireless Telecommunications Association (CWTA).
“This is a first step, an agreement in principal to make it easier for customers to be able to use their laptop or handheld devices that are equipped with high-speed cards to walk into any [hot spot] location…and not have to worry if it’s something provided by carrier A or carrier B,” Barnes said.
He added that although smaller Wi-Fi providers are not included in the agreement today, they will not be excluded in the future once the larger telecom carriers work out the kinks.
“The idea here is that the four major wireless carriers felt it important that they work together, agree on a technology standard or standards. Then in the future, there is nothing that precludes further agreements with other firms,” Barnes said. “This is…sort of walking before we run and I’m sure it will be successful, but it’s obviously difficult to get four different companies to agree on something.”
Smaller providers will now have to think about how they will position themselves going forward, according to Warren Chaisatien, senior telecom analyst at IDC Canada Ltd. in Toronto.
“Going forward, perhaps 12 to 24 months time, the market dynamic for the commercial hot spot will change in that we can expect to see wireless carriers play a much more active and significant role. Smaller wireless ISPs, who are dominant today, will take a backseat role,” Chaisatien said. “By that time smaller carriers (will) either have to partner with one of the four big wireless carriers, or they would be acquired.”
Chaisatien added that it is the role of the smaller ISP “early birds to the market” to establish footprints and roll out infrastructure, but also to get ready for its new roles.
“As the market matures and technologies allow users to roam between various networks and also between Wi-Fi and cell phone technology, [small ISPs] know their existence will change,” Chaisatien said. “And many small ISPs even expect their organizations and their assets, in this case wireless LAN networks, to be purchased, to be acquired by a larger cell phone player.”
This Wi-Fi agreement is further proof of the co-opetition that exists between the four Canadian telecom providers, which began with a similar agreement on short messaging service (SMS) in November, 2001, Barnes said. He added that this accord will not stifle competition between the companies.
“On the [SMS] we have had the same kind of experience, where the four companies basically agree that it’s good for the marketplace to establish a common technology base on which they can all compete,” Barnes said. “The challenge, of course, is to hold back the competitive juices when you are working on the technology agreement, get it in place, and then the competition begins.”
Robert Blumenthal, vice-president of products and services for Telus Mobility in Toronto, said that an agreement like the one announced last month won’t drive competitiveness out of the Wi-Fi arena, it’s simply an infrastructure agreement.
“This is an agreement on plumbing…whatever plumbing we have we are each going to make sure that they can be interconnected,” Blumenthal said. “Therefore each of us in turn, as we provide services to our clients, can provide the service experience that our clients would expect from us.”
Because of their partnership with Telus Mobility, Toronto-based Spotnik Mobile Inc. is in a slightly different position than other independent Wi-Fi operators, according to the company’s company-CEO, Mark Wolinsky.
“We are going to be heavily involved in working with Telus and setting the standards that move [Wi-Fi] forward,” Wolinsky said. “So we are excited by that.”
The Wi-Fi providers in the Canadian market that currently don’t have affiliations with larger telecom providers won’t be left behind, Wolinsky said, adding that everyone is going to benefit from the agreement in the long run.
Blumenthal added that there was a need in the marketplace for the four major mobility service providers to collaborate on a standard because customers wouldn’t be getting optimal services without an agreement.
“[Users] would end up having 15 different accounts across 15 different operators.…Even if we all tried and we were all really aggressive acquiring locations, none of us are going to get them all, and you end up with a patchwork of locations,” Blumenthal said.
The only way Wi-Fi is ever going to be useful to customers is if the mobility service providers work together, he added.
Chaisatien added that although, in his opinion, the mobility service providers didn’t need to collaborate to get what they wanted from the Wi-Fi market, the agreement will hasten the process.
“If you go it alone, you can do it, but when you provide compatibility, it stimulates demand,” Chaisatien said.
From the customer’s perspective, this agreement will prove to be beneficial because the onus will now be on the providers to compete on things like service quality, billing, packaging and pricing, Barnes said.
“The customer basically has a wider range of options or a wider range of locations in which they will be able to use the service and their choice among carriers will be independent of their favourite coffee shop.”