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From Skyper to Passpoint: The Renaissance of Wi-Fi Innovation

[With WiFi being more than 10-years old, you might think that it's become dated. Think again; in the last 2 years WiFi has seen a renaissance of innovation from numerous companies like DeviceScape, Instabridge, Karma, LIFX, Lockitron, Twine, WeFi, Wiman.me and many others. Guest author Niklas Agevik reviews the initiatives behind the resurgence of WiFi innovation and the reasons behind it].

VisionMobile - the Renaissance of Wi-Fi Innovation

Wi-Fi is now over 10 years old, but a new wave of innovation is leveraging those same technology foundations. Why? Firstly, the smartphone revolution has created 100 of millions of Wi-Fi endpoints. In addition, Wi-Fi has become too ubiquitous to ignore. It’s also unregulated enough to spur new use cases.

FON, a large Wi-Fi sharing community, announced last year that they have 7 million hotspots and the new 5th generation Wi-Fi routers (802.11ac) clock in at data speeds of over 1 Gb/s. Everything from VisualLight, a Wi-Fi enabled light bulb to hotspots for sharing Wi-Fi with strangers has appeared in just the last two years.

Read on to understand how Facebook can be used to grant Wi-Fi access, how FON got 7 million hotspots and how mobile operators in US and France are challenging the incumbents by relying on Wi-Fi.

Wi-Fi: The bad old days

For as long as Wi-Fi has been around people have dreamt of large scale Wi-Fi networks which can provide ubiquitous wireless Internet access.

Many of the first initiatives for free Wi-Fi access were community-driven. “Elektrosmog” in Sweden, dating back to 2001, was one of the earliest, biggest initatives. The movement had hundreds of members that had installed open Wi-Fi routers in as many places as possible. It was in no way unique – similar initiatives existed in almost every major city in the world, many of which still survive.

Skype, initially dubbed “Skyper” (short for “Sky peer-to-peer”) was intended as a way to create a free P2P mesh network. The free voice call aspect was a mere afterthought to lure users into joining the network and the naming change to Skype happened because the domain name Skyper was already taken.

There have also been attempts with “software only” approaches that leverage already deployed home Wi-Fi routers. A good example is Wisher, a software client for OS X and Windows XP that synced Wi-Fi credentials between its users. Unfortunately, it never got a large enough following and disappeared.

The most famous large scale attempt of an open Wi-Fi network is Martin Varsavsky’s FON. The original idea of FON was that users would install FONera routers that shared their own home Wi-Fi network with other FON users, with the upside being that by installing a FON router every user gained access to all other hotspots in the FON network. As in the Wisher case, however, users never ordered enough FONera routers for the network to truly take off. FON is now successfully partnering with fixed line operators to have the FON software included by default on all routers, removing the need of users to buy a separate piece of hardware. This allows FON and the fixed line operators to quickly add millions of hotspots that can offload traffic from 3G networks. Customers include BT, MTC and Softbank.

[UPDATE]: Another company working with fixed line operators is Anyfi. But instead of opening up a hotspot like FON their software tunnels secure Wi-Fi signals over the Internet, giving each subscriber remote access to their home Wi-Fi. Anyfi are said to be in trials with operators but do not yet seem to have any major deployments.

Other initiatives include the Open Wi-Fi Movement, which wants people to open up the guest SSID on their home routers to passers-by, and German-run wifis.org, which has built a popular way for anonymously contacting the owner of a certain Wi-Fi hotspot.

Wi-Fi Innovation vs 3G innovation

EDGE, 3G and LTE have been mostly restricted to phones, tablets and M2M applications. This stands in contrast to Wi-Fi. The freedom of the spectrum that Wi-Fi operates in and the availability of cheap Wi-Fi hardware has fostered an enormous amount of innovation and ingenuity.

For a few years it seemed as though Wi-Fi had been relegated to the back seat while consumers bought mobile data subscriptions, moving the spotlight to mobile broadband. But Wi-Fi innovation has hardly stopped.

In the last year alone we’ve seen several highly successful crowd-funded Wi-Fi projects like Lockitron, a Wi-Fi enabled physical lock,LIFX, a Wi-Fi enabled light bulb, and Twine, a Wi-Fi enabled platform for capturing sensor data. To pundits in the mobile industry it should be worrying that none of these projects are even offering a 3G version. So why aren’t they? According to Cameron Robertson from Lockitron the main reasons for not producing a 3G version was the higher power consumption and the requirement of a mobile data plan.

The proliferation of smartphones has contributed greatly to Wi-Fi innovation. US-based OpenGarden’s app creates an automatic mesh network between all devices running the app using Wi-Fi or Bluetooth. A user running OpenGarden on their smartphone or computer will automatically hop on to the OpenGarden mesh network using any nearby access point. Other good examples are DeviceScape and WeFi that collect open Wi-Fi networks and automatically connect users when one is nearby.

A quick look on Google Play shows plenty of Wi-Fi-related apps in the top 500 hundred lists doing everything from hacking (!) WEP keys to analyzing the optimal configuration for your home Wi-Fi router. The popularity of such apps shows the importance of Wi-Fi in the minds of consumers.

“Social Wi-Fi”

There’s also the concept of “social Wi-Fi,” which as of yet means different things to different people. Socialwifi.net, Wiman.me and even Facebook itself are testing a variety of social mechanisms for granting Wi-Fi access, the most popular requiring a user to like a page on Facebook or check in on Foursquare in exchange for access.

In the US, a new MVNO simply named “Karma” is selling a mobile hotspot connected to the Clearwire WiMAX network. The social part being that users get extra megabytes of data by sharing their mobile hotspot connection with anyone who connects to the hotspot and logs on with Facebook.

Another example is Instabridge (of which I am a co-founder), an app that allows its users to selectively grant Wi-Fi access to Facebook friends or addressbook contacts.

Wi-Fi and mobile operators: friends with benefits

Free Mobile in France offers users a lower cost on their home broadband if they agree to be part of the Free Mobile Wi-Fi network. By combining this network with another network of public hotspots they push users over to Wi-Fi whenever possible and cut prices on mobile data subscriptions. The results speak for themselves: the new entrant took a 5.4% market share in just six months. Bouygues and SFR have been forced to reorganize themselves to compete with Free Mobile. Operators who were not seriously considering working with Wi-Fi before have certainly changed their mind now.

Free Mobile is not the only MVNO using Wi-Fi to lower prices. RepublicWireless in the US have also bet heavily on that users can cover a majority of their data and calling needs with Wi-Fi. RepublicWireless offers an “all you can eat” voice and data plan for just $19 / month without a contract. The catch is that all their phones are preloaded with RepublicWireless’ own VoIP app that routes calls through Wi-Fi whenever possible.

2012 also saw the launch of FreedomPop. Like Karma, they also rely on Clearwire’s WiMAX network. FreedomPop provides a sleeve for iPod touches that allows an iPod touch to be used as a VoIP phone and function as a Wi-Fi hotspot for up to 8 different devices.

Operator-controlled Wi-Fi calling apps have also gained traction. Apart from offloading the network they also help increase indoor coverage. In 2012 many operators started experimenting with Wi-Fi calling, T-Mobile and its Bobsled app being on the forefront.

Incumbent mobile operators are also openly embracing Wi-Fi. Boingo recently announced an offloading deal with the CCA which Dave Hagan, Boingo’s CEO, refers to as their first “true Wi-Fi offloading deal.” Another telling sign of the industry embracing Wi-Fi is that Ericsson finally caved in and accepted Wi-Fi as an important technology after ignoring it for years, by buying BelAir Networks to strengthen it’s non-existing Wi-Fi portfolio. (During my time at Ericsson, Wi-Fi wasn’t seen as neither important or relevant).

New standards and certifications such as Passpoint and Hotspot 2.0 have also been created to help increase Wi-Fi usage. Passpoint certified routers allow devices to check which nearby hotspots they can authenticate towards and automatically connect to them based on pre-defined policies like for example if they belong to a Wi-Fi operator the mobile operator has a roaming agreement with.

In essence, mobile operators are betting on Passpoint to allow them to integrate Wi-Fi in their 3G network, just like any other base station. The first Passpoint-enabled routers were certified by the Wi-Fi alliance last year.

But operator-controlled Wi-Fi is not without controversy. Several analysts have raised concerns over how much control operators should and can have over Wi-Fi. After all, the operators’ main asset is their GSM, 3G and LTE licenses and networks leveraging those licenses. Why should they dabble in other technologies in which they have no strategic advantage?

Fortunately for operators, device manufacturers have been quick to integrate new Wi-Fi related standards on the device side, lending credence to the idea that some of these new standards will actually be used commercially and not just be more paper tigers. EAP-SIM, which allows SIM-based authentication to hotspots has been available on Apple devices since iOS 5. Samsung has made a custom Android implementation in its Samsung Galaxy S3 devices and it should only be a matter of time before it’s included by default on all Android devices.

With smartphones losing their “smarts” as soon as they lose their Internet connection, handset makers of course have a vested interest in enabling easy Wi-Fi access. Apple and Amazon have bet heavily on the importance of Wi-Fi with their latest devices, the Apple iPhone 5 and the Kindle Fire HD. They both list the Wi-Fi speed as one of the top features of their devices.

Wi-Fi innovation in 2013 and beyond

For years, Wi-Fi has been seen as 3G’s cheap and unreliable step brother. But Wi-Fi has improved. New standards and technologies that increase both speed, range and reliability may change consumers’ perception of Wi-Fi. Most people in the mobile industry have not yet realized how mature this technology has become.

Handset makers will be in the driving seat because of their pursuit to create great consumer devices where people expect a reliable Internet connection. Their customers, the end users, will continue to embrace Wi-Fi and use it in more situations.

This will leave us with two winners: any player with access to a large Wi-Fi network, including fixed line operators with large home Wi-Fi deployments, and either completely new MVNOs or operators that combine their 3G and LTE networks with Wi-Fi to provide cheap mobile data and voice plans.

Where will innovation come from next? Let us know your thoughts!

- Niklas
Follow Niklas on Twitter

  • David Fishman

    Thanks for the shout out for WeFi. This is a great piece. Very smart!

  • http://www.alanquayle.com/blog Alan Quayle

    Great review of the space. At the Mobile World Congress next week, is the mobile industry providing free data access at the show? No! Its free WiFi. You can just imagine the millions of dollars of upgrades required to each operators' systems to enable such free roaming mobile data, and then all the billing errors for thousands of Euros to each customer. O2 in the UK are doing some interesting innovations on sponsored WiFi access, operators need to follow their lead, Operators need WiFi more than WiFi needs them.

    • http://agevik.se Niklas Agevik

      That raises some additional thoughts. I think you're absolutely right – it's the billing system that is the difficult thing to adapt here. What would it take for operators to be able to experiment with business models? E.g. providing free 3G in Spain to all MWC attendees?

  • Frank Healy

    Niklas, great summary (just had time to sit and read it… over WiFi on my S3 of course. .. :-)) . It’s time for the fight back of the incumbent fixed line providers and cable operators … Driven by WiFi …me-thinks.

    Cheers.

    • niklas_A

      Thanks Frank and glad you liked it. We haven't seen any large movements from the fixed line providers yet although they certainly have the means to do so. Going forward I would predict we see more and more fixed line providers becoming MVNOs.

  • http://www.mobileforesight.com/ Jonas Lind

    Thanks for an interesting article. However, my recollection of very early Skype is a bit different. Back in 2002 I met Zennström before the company had finalized its business model and had yet to even be funded. At that time, “Skyper” wanted to disrupt the mobile operator’s expensive voice channel and offer free VoIP over the mobile data channel. Their marketing strategy was viral and built on the idea that early users would convince their friends to sign up. I pointed out some weaknesses in this strategy. The high latency and low QoS of the mobile data channel at that time would not be able to support VoIP for years. As Skype would strike at the heart of the mobile operators’ voice revenues, they would most likely do everything in their power to block Skype. An outright block of Skype would be controversial and might be considered anti-competitive. But the operators could still prevent Skype from flying. For example, they could ensure that the latency in their backend was too high to support voice over the data channel.

    By the time Skype launched, they had dropped their first mobile strategy and gone for the PC instead. I don’t know if my input influenced them to abandon their first mobile strategy. But the rest is history.

    (Skype may also have toyed with a WiFi based strategy at some phase but Zennström never mentioned that.)

    • http://agevik.se Niklas Agevik

      Thanks for the insight Jonas. I heard Zennström mention at a conference once that he had talked with 20 different VC firms before anyone agreed to invest. That sounds very reasonable to me – almost everyone I run into in the european VC scene can tell a story about how Niklas pitched Skype(r) to them! Another story I've heard is how Wi-Fi was supposed to be the monetization strategy for Skype.

      I would love to hear the full story around Skype, from initial idea to the sale to ebay to the PE buyout to the Microsoft sale. Maybe someone here can convince Niklas to comment.

      Also interesting comment around QoS for VoIP apps – the 3G channel is still not good enough for VoIP. Viber for example is only (IMHO) reliable over a good Wi-Fi connection.

  • http://www.ringcentral.com/phone-service/index.html phone service

    I agree with what you said, even though Wi-Fi is seen as inferior to 3G and LTE, ISPs should still provide this technology as a cheap alternative. And hopefully, its efficiency and reliability will also improve in the near future.

  • http://www.freesatreviews.co.uk Simon Carver

    Hello Niklas,
    I think this is more easier for Wireless Sharing with Multiple Users Simultaneously. Under tests with one user connected to the M5350 downloading large files or watching videos. Results may vary for normal internet surfing applications or multiple users as well as the quality of the 3G connection.

    What do you think regarding Apple iPad with Wi-Fi + 3G vs Microsoft Surface RT in Tablets? and What's next for Wi-Fi?

  • Abhishek

    hi,
    thanks for the great article. however, I'm still quite puzzled about how do mobile service providers end p gaining from Wi-Fi. Aren't they loosing on the data downloads and thus revenue. Correct me if I'm wrong.
    -A non-tech junkie!!

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