The Role of WiFi Header Pic

The Role of WiFi and Mobile Broadband

The WiFi relationships uncovered through preliminary analysis would suggest that mobile subscriber WiFi usage is far more prevalent than may at first appear. In the higher income countries, the greater use of WiFi by mobile subscribers would indicate that their per unit cost of broadband would be lower than that of their counterparts residing in lower income countries.

Introduction

In this post, we uncover relationships between mobile broadband, WiFi usage and fixed broadband adoption.

The information used in this analysis is sourced from OpenSignal (with permission), International Telecommunications Union (ITU, fixed broadband household penetration) and the World Bank (GDP per Capita, PPP). Specifically the data used in this post are taken from the following sources:

  • Global State of Mobile Networks (August 2016) Report, OpenSignal
  • 2015 ICT Statistics, ITU
  • World DataBank, dataset from World Bank

We typically use this type of analysis to draw inferences about market behaviour. They provide good departure points for robust discussion about what market factors drive consumer behaviour.

Fixed Broadband Household Penetration (2015) vs. GDP per Capita (2015)

This chart shows the country adoption of fixed broadband per household versus the GDP per Capita (PPP).

Over the years, we have seen this classical plot presented where we have explored the relationship between GDP per Capita (as a proxy for income) and the various telecommunications indicators. While we can raise various arguments for and against this type of a plot, it nevertheless does provide an indication of whether your country is inline, above or below your peer countries.

The Role of WiFi - Pic 1

Source: ITU 2015 Indicators, World Bank 2015 GDP per Capita (PPP), Africa Analysis, data plotted for the 93 countries presented in the OpenSignal report

Fixed Broadband Household Penetration vs. Average 3G/LTE Speed

The graphic shows the plot of the fixed broadband household penetration and the average 3G/LTE speeds.

The Role of WiFi - Pic 2

Source: Africa Analysis, OpenSignal (2016, data plotted for the 93 countries presented in the OpenSignal report), ITU 2015 Indicators

While there is some data scatter, we can make some interesting observations:

The higher the fixed broadband penetration, the higher the 3G/LTE speeds. The trend suggests that in the more broadband abundant markets, mobile operators have needed to increase the average speeds in order to compete against their fixed broadband counterparts.

In countries with lower fixed broadband penetration, the following reasons can be put forward to explain the observations:

  • Mobile operators are not under strong competitive pressure to increase the average 3G/LTE speeds. Perhaps mobile operators believe that consumers have very little broadband choice and, therefore, there is less pressure on the mobile operators to invest in their networks.
  • There is a lack of spectrum for LTE, thus mobile operators are limited to 3G.
  • In developing markets, where the mobile operators are deploying 3G, they may have the licence requirement to achieve a certain population coverage, and therefore, focus on extending reach before focusing on increasing the capacity to offer higher 3G/LTE speeds.

Fixed Broadband Household Penetration vs. Time Spent on WiFi

Intuitively, it makes sense that as the country’s fixed broadband penetration rises, so does the time spent by mobile subscribers on using WiFi.

The Role of WiFi - Pic 3

Source: Africa Analysis, ITU 2015 Indicators, OpenSignal (2016, data plotted for the 93 countries presented in the OpenSignal report)

Given that there is some data scatter, we can still make some interesting observations:

  • In the higher fixed broadband markets, more mobile subscribers will have access to WiFi at their homes, thus they would switch from mobile to fixed broadband when they are at home.
  • In addition, the availability of WiFi is driven by the greater availability of fixed broadband to serve as backhaul to the WiFi sites. Thus, we see the rise of more public WiFi sites.
    This observation can serve as a strong motivator for decisive mobile operator WiFi strategy.
  • At a country level, we would put forward that the greater use of WiFi will, in general, lower your cost of broadband access as WiFi is either used at rates ranging from no charge to at most price parity with fixed broadband.

This trend shows that as fixed broadband is deployed, mobile operators will experience more competition.

GDP per Capita vs. Average 3G/LTE Speed (Mbps)

The plot of GDP per Capita vs average 3G/LTE speed shows that the average speed increases as the country’s GDP per Capita increases.

The Role of WiFi - Pic 4

Source: Africa Analysis, ITU 2015 Indicators, OpenSignal (2016, data plotted for the 93 countries presented in the OpenSignal report ), World Bank (2015)

While there is some data scatter, we can make some interesting observations:

  • There is a wider spread of data points for the higher GDP per Capita (PPP) countries. Inspection of the data shows that there are fewer higher GDP per Capita countries where the average 3G/LTE speed was measured on the low side. Rather, these countries would be deemed to be poorly performing.
  • In the lower income countries, under GDP per Capita of USD20,000 (PPP), we can see a much less scattered and, more likely, a stronger relationship between GDP per Capita and the 3G/LTE average speed. This observation can be ascribed to various factors, but what it does show is that these countries are placed at a strategic competitive disadvantage regarding strategic capabilities to grow the country. This is based on the observation that broadband is critical to a country’s development.

In Summary

Analysis of the OpenSignal data does highlight interesting subscriber behaviour. When this data is combined with other 3rd party data (ITU and World Bank), we uncover interesting relationships.

  • In higher fixed broadband countries, mobile operators offer higher average 3G/LTE speeds. This is most likely driven by the need to compete against the higher fixed broadband speeds.
  • In the high income countries (as measured by GDP per Capita), subscribers have more broadband choice (mobile and fixed) regarding speed and availability. There is wider availability of good quality WiFi networks, both in and outside of the home. Therefore, subscribers spend more time on WiFi.

These relationships would suggest that WiFi usage is far more important than operators may want to admit to. The data does suggest that a more clearly articulated and executed WiFi strategy is called for.

 


OpenSignal is the leading source of insight into the coverage and performance of Mobile Operators worldwide. OpenSignal data is directly measured from consumer devices as opposed to traditional methods of simulating or approximating mobile experience. With over 15M downloads, the OpenSignal app represents the largest crowdsourced measurement of Mobile Networks. Operators across the globe use OpenSignal data for competitor benchmarking, network spend optimization, understanding true customer experience and more. OpenSignal also works with regulators and analysts globally and is backed by top tier investors including Qualcomm, Inc.