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Behind operators initiatively closing WLAN hot spots: it's critical to find exact industry position

Updated:2015/11/2 11:05

Recently MIIT announced the economic performance of the telecom industry in September 2015. Statistics shows that the major telcos strengthened the mobile network construction in the first nine months of 2015 and added 680,000 mobile base stations with the total number reaching 4.077 million and the number of 3G/4G base stations reaching 2.944 million. But compared with the rapidly developing cellular network, the sum of public WLAN APs is 5.958 million, 870,000 lower than that of the end of last year.

The simple number reflects the dilemma of the public WLAN market and it’s time to figure out what to do in the future.

Once crazy about WLAN construction

The major telcos started massive WLAN construction in 2012 of which China Mobile worked hardest.

China Mobile made ambitious plans, aiming to construct 6 million WLAN APs in three years. Corresponding with massive network construction, China Mobile proposed a new strategic slogan- four networks collaborating, raising WLAN to an unprecedented height.

As the dominant vendor of the industrial chain, China Mobile almost reformed the industry structure with this move. A large number of special WLAN vendors sprang up such as Hong Hao Ming Chuan and AUTELAN; system vendors such as Huawei and ZTE also joined the competition. These newly entered vendors engaged in a fierce battle with the traditional vendors, such as H3C, Ruijie, Cisco and Motorola, and the universal price war made the competition with no lower bound.

Driven by China Mobile, China Telecom and China Unicom joined the deployment plan of operator-level WLAN. But can’t tell whether lucky or not that they were,lacked of capacity for investment, China Telecom and China Unicom didn’t invest too much on WLAN. Pulled collectively by the three operators, the domestic WLAN market was completely distorted and the whole industrial chain descended into madness.

Once confused about WLAN construction

The operators got confused after the elementary scale of WLAN deployment was formed.

First it was confusion about technology. APs deployed were used less frequently with bad user experience, and the data unloading effect was not obvious. Facing these problems, the operators considered “improvement”, for example, they asked the vendors to introduce some new network planning optimization solutions and to simplify the network authentication method.

But now take a look, what can be solved by technology is not a problem. What confused the operators more is how to make WiFi collaborate with cellular network, and some in the industry even believe that the operators are not suitable to engage in WiFi inherently.

Actually, behind the argument of WLAN is the operators’ rethinking of the business model. With the development of mobile broadband and the popularization of smart devices, data services are gradually taking place of voice and SMS and becoming the new increasing point of business, but WLAN is not prepared for mobile broadband business inherently, and it is just like that a cow wouldn’t become a horse however hard you train or disguise it.

For China Mobile particularly, when TD-SCDMA network and devices became mature, especially TD-LTE beckoning it, its enthusiasm for WLAN started to decrease. And China Mobile’s internal division also intensified this point to a certain extent, and the fate of WLAN was determined when some provinces didn’t deploy WLAN in a large scale but chosed the fixed network with a great success.

The industrial chain fell into confusion with WLAN being“frozen out”. The operators suffered nothing but investment loss and bad name, and their strategies could be adjusted, but many vendors had no way back, just on the brink of going bankruptcy.

Restruction

It is obvious that the current problems can’t be solved through network construction and operating adjustment, so the operators start to seek changes.

China Telecom, for instance, has formulated particular work plan, distributing comprehensively in product, operation, service platform, network construction, KPI and other aspects, such as "six unifications" in product and intensive national operation.

Meanwhile China Telecom begins to widely take social resources in the WiFi hot spot construction mode to accelerate the network construction and enhance the network scale. The new expanding of APs is mainly of other-building and supplemented of self-building, which needs to choose commercially valued sites, to be constructed by order and acts as a leading construction.

As a former leading enterprise in WLAN construction, China Mobile is seeking changes actively. It essentially gives up the former mode of massive centralized purchase and construction. Oriented by government and enterprise customers’ business requirements of WiFi coverage, China Mobile turns to drive network operating mode of WLAN to transform from forward operation to backward operation to achieve the ability to meet the personalized business demands of the government and enterprise customers.

Anyway, is WLAN valuable? Though the operators are reconsidering and adjusting, players including the Internet and Wi-Fi network operators are entering the market and competing heterogeneously, and the ecology system of the industry is reconstructing dramatically. With further development of the Wi-Fi market, there will be new types and modes of commercial Wi-Fi operation. And the operators will find their real positions in this process of reconstruction.

 Source:c114
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