Making a business case for Wi-Fi

While cellular operators struggle to cope with increasing demand and lack of available spectrum  for their networks, Paul McKibbin, MD of Jasco Networks believes this data overload represents an opportunity for owners of malls and shopping centres to provide their own Wi-Fi networks.

The overload on cellular networks, particularly when it comes to data, is something that most subscribers across the majority of networks have experienced at some point.

This effect is multiplied in environments where a large number of people are gathered and are all trying to access services at the same time, such as malls and shopping centre environments, McKibbin says.

“These Wi-Fi networks are not the typical low cost Wi-Fi hotspot that users have come to associate with the concept of Wi-Fi, but carrier grade networks that offer sophisticated functionality and management.”

The company head opines that using carrier grade Wi-Fi networks will not only help to ease congestion on cellular networks, they will also provide mall owners with an additional service to draw customers to the malls, creating another revenue stream from selling data, along with a host of other benefits.

“Owning the network in their air space represents a significant opportunity for malls and shopping centres,” he said.

Supply and demand

According to Jasco, the reality is that mall owners have in effect given permission for cellular operators to provide coverage within their centres, allowing customers to use their cellphones inside the buildings.

“However, this has become problematic given the increase in 3G and data usage, especially since the revolution of social media and a growing desire for always-on connectivity. Added to this, cellular signal often does not penetrate buildings well, so signal within buildings is not always available, requiring repeaters to be installed within mall buildings,” McKibbin said.

Demand is on operators to improve connectivity within these spaces, but as demand has outpaced supply this has proven tricky, the MD noted.

“Malls also often charge a minimal rental fee for cellular operators to place their equipment, and the operators gain the bulk of revenue from this as a result of subscribers using their networks.”

“The airspace within a mall provides an opportunity for owners to reclaim their air space to some degree and gain a portion of this revenue, using Wi-Fi to offer customers the ability to take advantage of better data services.”

Data gathering

According to Jasco, aside from additional revenue however, Wi-Fi within malls presents a number of opportunities.

“With wall to wall Wi-Fi coverage, owners are able to gain granular and in-depth understanding of the shopping and buying patterns of their shoppers, by using the Wi-Fi to pinpoint where their customers are at any given time, which stores they visit and which they bypass, and even how long they spend in any particular shop, based on an opt-in model where users of the Wi-Fi network are able to elect to be a part of data gathering,” McKibbin said.

“This marketing intelligence can be immensely valuable in itself for discovering shopping patterns and popular stores, amongst other things. It can also then be used for further applications, such as pushing discount vouchers to shoppers, advising them of special offers in stores near them, and using other promotional techniques to draw shoppers in to stores,” he added.

The networks can even be used to provide entertainment for children, access to mall information and more, Jasco says.

Bountiful benefits

The group notes a number of side benefits of Wi-Fi for malls as well, including the ability to provide instant Point of Sale connectivity for new tenants instead of them having to wait for an ADSL line to be installed.

Security is another area where Wi-Fi can be beneficial, linking existing security cameras to the Wi-Fi so that guards can view video on the move on a tablet PC, providing more interactive and proactive security, McKibbin says.

Jasco stresses however, that the cost of using Wi-Fi within the mall needs to be attractive to consumers, otherwise they will not take advantage of the service.

“However free access also needs to be limited, since consumers may abuse the free service and there is a cost involved with providing Wi-Fi services which needs to show return on investment.”

McKibbin believes there needs to be a balance between providing a service that is useful to consumers, but which is also profitable for mall owners.

“One way to achieve this is to link Wi-Fi access into a loyalty scheme arrangement, giving users a limited amount of free bandwidth and then rewarding customers with additional bandwidth for time spent in the mall.”

For mall owners, while there are side benefits, the main advantage of providing customers with wall to wall seamless Wi-Fi access, and what all of the other benefits add up to, is increased dwell time.

“This in turn leads to increased revenue. Wi-Fi can even add to a mall’s premium image and act as a draw card to get more foot traffic into malls, particularly if Wi-Fi is free or linked to some sort of loyalty scheme.”

“The data overload on cellular networks represents a substantial prospect for malls and shopping centres to own their networks and take advantage of multiple opportunities,” McKibbin said.

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Making a business case for Wi-Fi