The Wi-Fi hotspot industry in Canada got a little more interesting recently with the launch by Bell Canada of a new network of 275 hotspots in Mail Boxes Etc. locations across the country. Mail Boxes Etc. is just the first deployment in a new, more aggressive Bell hotspot strategy. The company expects to have 500 sites up and running by year end.
Bell, the incumbent phone company in Ontario and Quebec, also offers high-speed Internet service under the Sympatico brand, cellular service across the country through Bell Mobility, satellite television through Bell ExpressVu, and enterprise systems integration services.
The Mailboxes Etc. project also ties in with the inter-carrier hotspot roaming agreement, first announced over a year ago by Canada’s three major cellular carriers. Bell, like its partners, believes inter-carrier roaming is essential, at least in the early going, to build the density of hotspot coverage needed to attract paying customers. The roaming agreement is finally about to bear fruit, says Bell Mobility vice president of corporate development Almis Ledas.
“It has been slow, steady progress without a lot of hype, which is a little different from what’s going on in the rest of the [hotspot] industry,” Ledas says of the inter-carrier initiative.
However, service standards have now been set, and portal infrastructure and wholesale billing services are in place to manage authentication and inter-carrier accounting. The only thing missing is the retail billing infrastructure, which should be in place by end of the summer. The three companies have a combined total of between 300 and 400 hotspots up and running now. The total should be around 1,000 by the end of the year, Ledas says.
Bell sees both short-term and long-term business models for public access Wi-Fi. In the short term, it will be the hotspot business as we know it – wireless high-speed Internet access for a fee. In the longer term, Bell sees hotspots and hotzones as a way to extend indoor coverage and solidify relationships with both cellular and Sympatico high-speed Internet customers.
Even in the shorter term, it hopes to leverage relationships with those customers to market the hotspot service. “We will likely not be very visible with a mass media campaign,” Ledas said. Bell expects existing customers to start taking advantage of the hotspot service by buying daily or hourly access, but then to graduate to monthly contracts.
Like many hotspot service providers in this country, including its roaming partners, Bell is offering hotspot services for free for now, but that will change by the end of the summer when the retail billing systems are in place. The fact that some providers and municipalities will continue to offer free service is not a concern. Bell sees public access Wi-Fi as analogous to parking, Ledas says.
“When you’re out in public, you have a choice of where to park – free street parking, metered parking, parking garages and so on. The free ones are less convenient and less secure. In fact, the more you pay, the more convenient and secure it is. We’re out to provide consistent, reliable, secure [Wi-Fi hotspot] service.”
Bell first launched a trial of Wi-Fi hotspots with its AccessZone project over two years ago. That trial has now been concluded. “Where there was sufficient traffic to warrant it, we converted those sites into next generation hotspots,” Ledas says. “There are some hotels that fall into that category, for example. Some others where there wasn’t sufficient usage, we wound down.”
In some cases, hotspots that were originally part of the AccessZone trial are now managed by Bell on behalf of clients. Air Canada lounges at Pearson airport in Toronto and Via Rail trains running between Toronto and Montreal are examples. Bell’s enterprise systems group also has several clients for which it implements and manages private hotspots and WLANs.
The Mail Boxes Etc. project represents a first step forward into the commercial hotspot business. Bell’s strategy will be similar to T-Mobile’s. The Mail Boxes sites are roughly equivalent in Bell’s location portfolio to T-Mobile’s Kinko’s sites, Ledas says. Mail Boxes Etc. offers a range of business services, including rental postal boxes and quick printing.
As well as providing high-speed Internet access at the stores, the hotspots will also make it easy for Mail Boxes customers to upload documents from their laptops to the store’s computers for printing on its commercial printers. The automated document upload software was developed by BOLDstreet Wireless Internet, an Ottawa-based hotspot operator with about 70 sites in Ontario and Quebec. BOLDstreet also manages the Mail Boxes sites for Bell.
“For us, the Wi-Fi hotspot business is not yet of a scale that we can weave it into the fabric of Bell’s operations,” Ledas says. “BOLDstreet is a capable and cost-effective service provider for us. They’re like an outsourced Wi-Fi hotspot operator.”
If this sounds like a faint-hearted endorsement of the hotspot biz after all, it’s only because the Bell brains trust is nothing if not pragmatic.
“We don’t see this as a high-margin business for a whole range of reasons,” Ledas says. “It will help us extend our wireless coverage and it will pay for itself. Part of our strategy is to do as much as possible in the short term for the least possible investment. That means it’s necessary to work with the other carriers, for example.”
Bell’s notion of extending wireless coverage is another expression of its pragmatism. Some carriers, including Rogers Wireless, one of its partners in the hotspot roaming agreement, remain skeptical about the idea of Wi-Fi-cellular convergence. Dual-mode phones are coming, though, and Bell sees convergence as not just inevitable but desirable.
“We will need to support a phone that acts as a cell phone but also acts as a home phone in residential settings, a business phone in business places, and as a tool for VoIP through hotspots,” Ledas said. “The reason this is attractive is that there’s a true customer benefit there – it provides better connectivity – and to the carrier, it provides better in-building coverage.”
There will be a trade-off involved. With dual-mode Wi-Fi-cellular phones, customers will be able to do some of the calling they do now over the cellular network through lower-cost Wi-Fi connections at home or in public buildings. On the other hand, if Bell supports both in-building VoWi-Fi and home VoWi-Fi, it gets to hang on to the customer in all three domains.
“It makes a better experience for the customer, so that means revenue opportunities for us,” Ledas said.
Bottom line: at Bell, hotspots may not be hugely important in and of themselves, but they’re part of the mix of products and services the company hopes to use to hang onto its preeminent position in Canada’s telecom industry.