For now, however, Wi-Fi hotspots appear to be a customer retention strategy to reduce churn and keep pace with traditional telecom and mobile operators, which now have one more reason to see their cable operator brethren as a credible threat.
While many telecoms will view this Wi-Fi strategy as a threat, others might seize it as an opportunity, according to Bill Rubino, principal analyst at ACG Research. Some wireless carriers may ultimately lease Wi-Fi from cable operators as a cheap means of wireless backhaul.
"I think initially it's a way to differentiate themselves. But I think as things evolve, especially in terms of 3G offload … you're going to really see the marriage of the cable operators and the mobile carriers take off," Rubino said.
"It's not a rational market, in the sense that nobody knows what's going on," Jude said. "We're making up the rules as we go along. We don't really know what's ultimately going to define the market."
Cable operators have become "a serious threat to telcos" because of their ability to deliver faster throughput and more tightly integrated services, he added. The attempt to usurp mobile broadband with free Wi-Fi is just "upping the ante" and forcing telecom operators to invest more in integrated services.
"I think you can expect to see a lot of innovation coming out of [telecoms], and they wouldn't [do that] if they didn't feel threatened by Comcast and the other cable MSOs [multiple system operators]," Jude said. "Everything's a threat to them."
Jessica Scarpati is a news writer at SearchTelecom.com
This article originally appeared in SearchTelecom.com
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