Wi-Fi Essential To Wireless Carriers

Wi-Fi users will outnumber cellular data users by 2007, putting strong pressure on wireless operators to bundle both types of access, according to a report to be issued later this month by Pyramid Research.

“This trend should be a wake-up call to any carrier offering or planning to offer a cellular data service,” the research firm said in a statement released this week that summarizes the report. The trend puts T-Mobile in particularly good position because, despite criticism, it has invested heavily in Wi-Fi hotspots in the last two years, the report said.

“We believe that by bundling Wi-Fi and cellular, the carrier (T-Mobile) has created a service worth more than the sum of its parts,” the report concludes. The report notes T-Mobile’s claim that more than 30 percent of its hotspot users also subscribe to its cellular service.

“While we cannot say that Wi-Fi alone resulted in added cellular subscribers, the correlation between the two services is significant,” the report notes. “We believe that T-Mobile can justify its Wi-Fi investment purely through cellular customer acquisition and retention.”

By contrast, some operators are positioning their cellular data services as competing with Wi-Fi when they would do better to use Wi-Fi to gain and keep customers who may well use both types of access. The report counts as cellular data service EDGE, 1x services, EV-DO and UMTS. Currently, most subscribers of cellular data services us slower 1x service. [Mobile Pipeline]

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