Consumers are increasingly aware that fast broadband is not going to keep them happy if the in-home Wi-Fi cannot handle the speeds, especially if they are streaming video to multiple devices. Service providers know this too, so are paying more attention to Wi-Fi performance, with some determined to both differentiate their offer with a ‘premium Wi-Fi’ capability and make money from it. Singtel, the Singapore telco, and U.S. cable operator Midco (Midcontinent Communications) are two service providers that charge a monthly subscription for a premium Wi-Fi solution. Waoo is one of the pioneers for this business model in Europe, offering its mesh Wi-Fi capability free on its two highest broadband tiers but with a fee on its lower two packages.
According to Philippe Alcaras, CEO at AirTies – whose set-top boxes act as access points and clients within the Waoo home mesh Wi-Fi networks – any service provider offering broadband above 30Mbps should think about premium Wi-Fi. After this point it is increasingly difficult to ensure that promised (and widely marketed) broadband speeds do reach end devices. Consumers running their own speed tests become disappointed and complain.
Midco is charging $8 a month for its premium Wi-Fi (and an extra $2/month for each device after three) and Singtel asks SGD10 per month (covering two devices) and SGD 5 per month for each additional device to support the mesh network [* see bottom of story for full pricing and conversions]. Waoo charges DKK39 per month (EUR 5.24) for premium Wi-Fi on its Fiber Light (10Mb speeds/DKK 199/EUR27 per month) package and the same for users of its Fiber Basic (100Mb speeds/DKK299/EUR40). The cost of the premium Wi-Fi ‘upgrade’ is the same as buying access to 100Gb of cloud storage from the broadband provider. Premium Wi-Fi is bundled free with Waoo’s Fiber Extra (300Mb/DKK349/EUR47) and Fiber Full (500Mb/DKK499/EUR60) packages.
Peter Bernard Kummerfeldt, Senior Business Development Manager at Waoo, says nine out of ten consumers will see value in premium Wi-Fi and show a willingness to pay once the benefits have been explained to them. And those benefits amount to better Wi-Fi coverage and performance including throughput speeds and stability. When Waoo launched its premium Wi-Fi offer last autumn its consumer marketing focused on exactly these attributes, including the offer to ‘Fill up your home with Wi-Fi’. The bigger message was about getting what you pay for.
Waoo is the Danish FTTH provider that is owned by seven different utility firms. The company covers half the country physically, reaches one-third of homes with its network and has 300,000 customers. Most of its subscribers receive speeds between 100Mbps and 500Mbps, depending on their broadband package. Danish consumers are demanding broadband users – and Waoo has encouraged them to expect more, including with its Netflix app integration on its set-top boxes.
Kummerfeldt reveals that the faster its access network became, the more customer calls the company received about real speeds on end-devices. “Wi-Fi was becoming the bottleneck to the experience,” he confirms. “There needs to be a closer relationship between what you guarantee into the gateway and the actual experience [around the home] and that is our main reason for deploying premium Wi-Fi.”
The premium Wi-Fi service has been well received in the market. “Everyone can relate to the problem of bad Wi-Fi and the majority of people do not have the skills to handle Wi-Fi issues or care enough to do so. They would prefer that Wi-Fi is part of the service,” Kummerfeldt says.
Waoo deployed after a year of testing showed the significant benefits to consumers. 80% of customers previously expressed some dissatisfaction with their Wi-Fi but after the trials, 70% of users were happy and felt that they were getting what they paid for, in the sense that they now had the coverage and speeds they expected for end-devices.
According to Alcaras, 15-20% of all broadband subscribers are candidates to enjoy and pay for premium Wi-Fi. These are the intense users including those who watch streaming video services like Netflix and often stream video to multiple devices at once. “This is a way to boost ARPU for the operators. Hopefully it will increase subscriptions and reduce churn. PVR users are less likely to churn and we think the same will be true for premium Wi-Fi.
“There are expectations about cost of ownership too,” Alcaras continues. “One of the side-effects [of premium Wi-Fi] is fewer customer calls. We expect real reductions in call centre activity and truck rolls.”
It is not just large houses that benefit from premium Wi-Fi, according to AirTies. Smaller apartments also gain if they are dogged by wireless congestion and thick walls. Alcaras says the retail market for Wi-Fi repeaters is “exploding”, providing further evidence that people take Wi-Fi seriously and are willing to pay to improve it.
Home Wi-Fi is now a managed solution for the premium customers at Waoo and it is easy for consumers to set it up themselves. Technicians can take care of advanced installations. Kummerfeldt thinks it is time that service providers focused on something other than speed, which is not necessarily a way to ensure higher prices, long-term. “There should be more focus on the end-to-end solution.”
He confirms that Waoo wants to reduce churn and also attract new customers with its innovative Wi-Fi offer and the early signs are encouraging. After launch, the company saw a 50% surge in online requests for its products and a 250% increase in online leads. At the very least, the message about getting what you pay for certainly resonated.
[ * Midco charges $7.95 per month (EUR 7.40) for what it calls ‘Whole Home Wi-Fi’ using up to three devices (a minimum of two is required), with each additional device costing $2 per month (EUR 1.86). Whole Home Wi-Fi installation costs $50 (EUR 47). The Singtel pricing of SGD10 (Singapore Dollars) is equivalent to EUR 6.58 and the additional device fee of SGD5 is equivalent to EUR 3.29. Singtel refers to the upgraded Wi-Fi as ‘WiFi Mesh’ to consumers.]