Enhanced WiFi – Profitable CSP Innovation

Enhanced WiFI is potentially a key area where CSPs can innovate and differentiate themselves.

Necessity is the mother of invention

The majority of CSPs, especially those in the fixed-line broadband side of the business, have an innovation challenge. Our belief is that CSPs spend far too much effort coveting opportunities that are largely unrelated to their core capabilities, and therefore highly risky. Instead they should concentrate on the steady stream of adjacent services that tie closely to their core businesses.  Not nearly as exciting, but with a vastly better probability of success

Enhanced WiFi and Broadband – A perfect Innovation

We believe that home and SMB WiFi is such an  opportunity.  Let’s look at the situation:

1. Broadband represents the largest consumer/SMB revenue opportunity, and the only growing opportunity
2. WiFi is the weak link in the chain, exposed more clearly by the Covid-19-driven shift to home working and schooling
3. Consumers, while confused about the source of the problem, are expressing dis-satisfaction with home broadband performance
4. And yet, consumers are suddenly all the more appreciative of the importance of broadband, and likely to pay for better performance
5. The WiFi technology bundled with the vast majority of broadband services is both old, and often just plain poor performing.
   (in particular, essentially no modern mesh solutions are offered)
6. Consumers will generally not upgrade WiFi on their own for three reasons:
   A – they don’t understand the details of the problem – they just know “their internet is slow”
   B – Even if they recognize WiFi as the culprit, they don’t wish to undertake the complexity of the solution
   C – They don’t wish to lose CSP support for the end-to-end solution
7. Consumers will continue to blame their “internet service” for performance problems
8. WiFi performance therefore generates service/support calls and cost.  And no additional revenue.
9. An entire generation of far better performing technology, and superior products even on a tech-equivalent basis, exists

The Business Opportunity

We have:

• user need and  an acknowledged problem
• willingness to pay.
• a customer perception/satisfaction problem
• needless support costs
• lost revenue opportunities.
• a natural channel and tie-in to an existing customer service

What needs to be done

So why are CSPs not stepping in to profit on this screaming need?  We postulate that there have been four causes:

1. A simple lack of innovative urgency on CSPs’ parts
2. Uncertainty over whether the mass of consumers would appreciate the performance advantage
3. A lack of suitable product designed specifically for CSPs
4. A lack of clarity on how to differentiate (flip side: if the differentiate on support, how is that implemented?)

Readers may wish to read our earlier Research Note

A path forward

So, how might CSPs take advantage of this situation?  We suggest that they take a 3 step approach as follows:

First, bundle leading edge mesh product. CSPs have been bundling STBs, old WiFi technology, DVRs, etc for ages.

Second, package attractively, using well-worn marketing tools such as monthly payments, and “good-better-best” tiers, a-la-Apple

Third, differentiate the offering with active support based on remote management, cloud-based optimization and other modern capabilities that can deliver the triple benefit of improved customer satisfaction, reduced support costs and improved performance.  Oh, and more revenues

So where is the problem? Why has this not occurred already?

We believe the first reason is CSP inertia.  Without a screaming need, large, conservative organizations tend not to rock the boat.  But world events suggest that the right time to rock the boat is now.  We believe the second reason is a lack of suitable product, with remote management (TR-069) and remote optimization features, from the leaders in mesh WiFi.

Nokia Beacon

Enter Nokia’s Beacon family. Beacon is a new entry into Mesh, but unlike others, Nokia targets CSPs as partners and channels, supports remote management and provides a cloud-based capability that crunches statistics and optimizes settings such as channel selection. As such, Beacon supports the automated and proactive management features that improves performance/satisfaction and cut support costs.  Beyond that, Nokia is comfortable with CSP channels and likely understand the specific needs of CSPs. We cannot comment on all of the unique product features a CSP might want, but caution that such customization and micro-management is how they got such old and mediocre tech in the first place.

CSPs and Nokia should seriously look at creating a market for enhanced Wifi, particularly given the increased demand and appreciation for home broadband in the current Covid-19 crisis. If successful, we expect this could attract other players as well, but its good to see one solid familiar player with a product at the ready.

We have also evaluated beacon 3 and published our opinion/experience here

Grant Lenahan

Appledore Research