How app makers will trade Wi-Fi access for membership

Many of us in the wireless industry are familiar with the term ‘sponsored connectivity’. The premise behind it is that consumer-focused companies, such as app offerings or Web browsers, can offer free cellular or Wi-Fi connectivity in exchange for using their service. While the concept isn’t new, I do foresee it becoming a lot more pervasive in the years to come for day-to-day use among app providers in particular.

The popular social app SnapChat recently made a good effort at leveraging sponsored connectivity. The company provided app users attending Electric Daisy Carnival (EDC), a 140,000-person electronic music festival in Las Vegas, with access to free Wi-Fi connectivity. However, the connectivity was only available within the SnapChat and official EDC application. While the plan was good in theory, it backfired.

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Many users could not access a wireless connection because of network congestion, which is a very simple and prevalent problem in the wireless world. SnapChat’s Wi-Fi network could not withstand the amount of traffic it was receiving from such a large audience.

After SnapChat’s failed attempt at sponsored connectivity, why would other app providers pursue the same strategy? The answer is simple. App providers want to expand their user bases.

The best way to expand a user base is to offer unique value, and free connectivity is highly valued among consumers as most are concerned with data caps and overage fees. For services that aren’t subscription-based this is particularly attractive, as it opens new avenues for monetization. More users translate into more eyes to view advertisements and more behaviors to target for data collection. More ads can be pushed to even more users, which results in greater ad-spend and behavioral analytics that can be leveraged to improve the delivered service or sold to other companies.

Sponsored connectivity is a sound strategy, but the technology needs work to become truly beneficial for app providers. Even if more Wi-Fi access points were deployed at events similar to EDC, networks still would not be able to connect everyone. This leaves two viable approaches for app providers pursuing sponsored connectivity.

First, they could allocate Wi-Fi capacity. By dispersing connectivity in fair fashion across a population, this would allow most users some connectivity rather than making the Wi-Fi connection unavailable for the whole population. One way to disperse connectivity is to develop algorithms that dictate the number of uploads allocated to any specific user during a pre-determined time frame. For example, for X user, X number of uploads are pushed through per hour.

Alternatively, SnapChat could go the route of making automatic connections. They could hold onto an upload request if the network connection is unavailable. By using integrated app policies, the system could retry uploading a request every few minutes, basically enabling staggered connectivity. This solution is least aggravating to the end-user as it eliminates the need for manual re-tries. Policies may also be configured to retry using the cellular network, if that is acceptable to the user.

Aside from the two methodologies listed above, fundamental changes to network infrastructure can also contribute to the success of sponsored connectivity. While such solutions might better solve the capacity crunch, app providers such as SnapChat will not control them. In two to three years however, there will be a significant shift in network infrastructure due to new technologies being introduced.

Social messaging is a crowded market and new apps hit the market every day. Those looking to solidify their position in the market by monopolizing end-user adoption and viewership should consider sponsored connectivity. Consumers are increasingly concerned with rising data usage and overage charges, so any company to offer an alternative solution would unquestionably gain market share. Until some fundamental network changes occur, I foresee the app providers who can apply sponsored connectivity in day-to-day scenarios, outside of major events, to have the best shot at becoming leaders in the crowded social space.

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(Note: The views expressed in this article are my own and do not necessarily reflect the views of my company, InterDigital.)

Narayan Menon is vice president of InterDigital Labs.

 

 

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