Shaw WiFi network to initially target malls, arenas, transit; expand later

Shaw Communication Inc.’s early WiFI deployments will be in shopping malls, sports arenas and transit systems in Vancouver, Edmonton, and Calgary, Cisco Systems Inc., the company hired to build the network, says. On Sept. 1, Shaw announced the launch of a WiFi network in place of a mobile network—but the development left many wondering how it would be rolled out. The WiFi network will be initially built to target places where large numbers of people congregate. “The source of things that are being planned at the moment are shopping malls, sports arenas and also transit systems,” Mark Kummer, vice-president of service provider operations at Cisco, said in an interview. But Shaw intends to expand its coverage areas over the next three years, he said. When asked whether the network could be expanded to provide connectivity along highways, Kummer said robust access points can be mounted on roadside cabinets or buildings. Existing fiber-optic cable and “overhead,” i.e. copper cables, will also play a role in Shaw’s WiFi plan, he said. “It only takes 20 minutes to deploy each access point on that cable,” Kummer said. “So it can be done in a very quick way because it accesses their cable network infrastructure. It’s very quick and easy, so it’s feasible that they could deploy over a very large area.” Kummer could not comment upon the number of access points necessary to provide significant WiFi coverage in each city. “But we’ve actually got our engineers locked in with Shaw engineers at the moment doing very detailed analyses on exactly where you put them to give a robust high-quality experience,” he said. Kummer noted that the earliest adopter of such a WiFi system was U.S. company Cablevision Systems Corp., which deployed a network in New York and New Jersey in 2008. “They deployed 25,000 access points and they are continuing to deploy them,” he said. “That’s given them pretty much an umbrella coverage of southern Manhattan.” Kummer said Shaw is planning to offer the WiFi service free to its own customers in part as a retention strategy—which he said has worked for Cablevision. “The added value that was perceived by giving their customers WiFi access actually increased the number of customers who stayed with them,” he said. “So that's a definite business benefit.” The company is also looking at options were it can grow incremental revenues from extending the service to customers who aren't Shaw subscribers, Kummer said. During special sporting events, for example, Shaw’s WiFi service could be made available to non-subscribers for a fee, he said. Shaw’s WiFi network could also earn revenues from helping mobile providers offload heavy data users. “If you’ve got customers who are accessing video and large quantities of data, it can make more sense to offload it onto a WiFi network,” he said. “There is a wholesale option Shaw could look at.” In a research note released the same day as Shaw's WiFi announcement, Scotia Capital analyst Jeff Fan estimated that Shaw's net incremental capital expenditures for the WiFi network will be approximately $270 million over three years. “This reflects substantial savings over time as the total spending for 3G/4G would have cost over $1 billion,” Fan wrote. Fan said in an interview Wednesday that Shaw’s WiFi will not be a replacement for people who have 3G or 4G wireless services. He said he expects WiFi to become more popular as data usage rates continue to rise. “Over time, there’s a likelihood that more traffic will go through WiFi for wireless data instead of going through a 3G or 4G wireless service,” he said. “People over time may be capped out in terms of how much they’ll pay for data. So for access usage for wireless data, they will rely on WiFi service.” Fan noted that, according to the Federal Communications Commission’s (FCC) 2011 Wireless Competition Report, 40 per cent of iPhone data is carried over WiFi. According to data collected by AT&T Inc., 59 per cent of the telco's WiFi connections were made with smartphones in 2010, Fan said. Shaw’s WiFi network will be deployed through a combination of sophisticated access points and Cisco core routers, Kummer said. The Cisco 5000 series router will let customers switch between a mobile network and WiFi. “It would allow the seamless movement of users from say LTE onto a WiFi network,” Kummer said. Kummer said the Cisco Aironet hardware provides outdoor access points that are unlike traditional WiFi hotspots in homes or coffee shops. “With these clever ones, they actually constantly monitor the airwaves that interfere, and change the frequencies they use to get around interference,” Kummer said. “It’s a different degree of access point.” Iain Grant, managing director of telecom consultancy the SeaBoard Group, said in an interview that Shaw’s decision to target high human traffic areas makes sense. “Sports arenas, for example, are notoriously problematic for cellular service providers because of the huge demand for only limited times,” Grant said. “It would be extremely expensive to augment your capacity. So WiFi makes a lot of sense.” Grant said Shaw’s WiFi is not yet a replacement for cellular but it is moving in that direction. “The idea is to take your Shaw services and move them outside the home with you,” he said. “It’s not really a replacement for cellular—although it will be—it’s more an extension of your living room.” Kummer said the WiFi service could be attractive to tablet users as an extension of Shaw's video entertainment, cable TV and high speed Internet services. “It’s really extending that experience to their own customers when they are on the move,” he said. “That’s what we’ve focused on. How can you really deliver a high-quality video experience over a mobile environment?” The Cisco vice-president also noted that location-based ads will play a role in Shaw’s WiFi network—with the potential for revenue generation. Kummer said depending on which access point a subscriber is connected to, local-area businesses could send ads to the wireless device. “If you’re in a shopping mall and a certain clothing shop knows you’re there, not by name, but knows your device is there,” he said, “they may want to put in an ad that says, ‘50 per cent off today.’” Shaw is expected to launch WiFi networks in Vancouver, Edmonton and Calgary by next spring. dgrenier@thewirereport.ca

Shaw WiFi network to initially target malls, arenas, transit; expand later

News | 09/15/2011 9:20 pm EDT

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