Hamilton Tiger Cats and Vex Canada unveil new business case for Wi-Fi

Vex Canada’s recent announcement that it has a deal to deliver Wi-Fi to Hamilton Tiger Cats’ fans at Ivor Wynne Stadium is early proof that dual mode handsets and ad-based funding are breathing new life into public access Wi-Fi. “The model we are putting out there is based on sponsorship,” Asif Khan, country manager for Vex Canada, a subsidiary of Sao Paulo, Brazil-headquartered Vex Corp., tells Report on Wireless. “Hypothetically, if we went into McDonalds’ 1600 locations in Canada, we would offer a brand a year of exclusivity. That might be McDonald's itself or a partner like Coca-Cola.” Khan says this would not result in rolling banners, but a single advertisement that might say “free Wi-Fi powered by Vex, and sponsored by Coca-Cola.” The Vex Corp. relationship with the Tiger Cats may be a sign of things to come because accessibility to the Wi-Fi network is completely contingent on dual mode access of smartphones. And the real appeal, of course, is that access will be free. “Sometimes consumers get annoyed when they have to pay for Wi-Fi,” says Bruce McGregor, a senior analyst at Current Analysis Inc. “If there is some angle where they can get it for free, it will definitely have more appeal.” This is one thing that has killed public Wi-Fi in Canada: whether at airports or in Cogeco Data Services Inc. ONE Zone service in Toronto, people won’t pay. And if the free service at Ivor Wynne isn’t a walled garden, then users could feasibly make VoIP calls. “This is targeted completely at mobile devices,” confirms David Lachapelle, the Tiger Cats director of technology. “We are anticipating a good response, and are building promotional material to advertise the service. If everything works out, and we can handle the infrastructure, we’ll be able to provide live replays, and fans will be able to check yardage and other statistics.” The infrastructure is an issue, and one obvious reason why larger hotspots like football stadiums are harder to roll out than a cafe or restaurant. “We have fibre to the stadium provided by a third party,” says Lachapelle, “and we now have an order for a 10 Meg pipe that will be dedicated to the Wi-Fi network. With fibre it is also expandable – we can expand without having to re-implement infrastructure.” The Tiger Cats looked at a self-funded roll out but found it too expensive. “This didn’t make sense for us from a revenue perspective,” says Lachapelle. “We have been working toward this for some time, and last season we looked at implementing it ourselves, but we couldn’t come up with a cost model that would work for us. We weren’t going to be able to monetize it.” Given that Vex doesn’t have a named advertiser, and given that Cisco Systems is the incumbent network vendor for both the Tiger Cats and Vex Corp, it’s likely that the deal is at least partly vendor-funded in order to gain access to new markets. It was Vex that approached the Tiger Cats. “By the end of next year we are hoping for 4,000 to 5,000 hotspots,” says Khan. “We’ll get there through deals with large franchise chain operators like McDonald’s and Tim Hortons.” This is quite ambitious, given that at present Canada only has about 3,000 public hotspots. Wi-Fi is a proven technology but large scale roll-outs are expensive, require backhaul, and have limits. “Wi-Fi has limited throughput,” says Bill Ho, a research director for wireless services at Current Analysis. “It is unlicensed spectrum, and there are engineering challenges – quality of service isn’t guaranteed.” It will also require a degree of sophistication on the part of advertisers and partners. “Some ad buyers want 30 seconds of a consumer’s attentions,” says McGregor, “but the consumers on Wi-Fi are tech sophisticated, and might have more money in their pockets. It’s a captive audience – you might only need a 10 second flash ad.” If Vex does get traction, it could end up with strong partnerships on the carrier side, much as Qwest Communications International Inc.’s residential and small business internet subscribers have free unlimited access to the AT&T Wi-Fi network. In effect, if the Vex Wi-Fi hotspot network reaches its goal, Canada’s big telcos and cablecos could want a piece of the action. “AT&T now owns WavePort, says Khan. “It has over 20,000 hotspots in the US. They had 3.4 million connections on their Wi-Fi network in the first quarter of this year – it is a cost savings for them to be taking data traffic off of their 3G network.”

Hamilton Tiger Cats and Vex Canada unveil new business case for Wi-Fi

News | July 10, 2009

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