Wi-Five to BitBuzz!
Despite many users now having an internet connection on their phone, the demand for WiFi access is greater than ever, according to the founder of Irish wireless provider BitBuzz.
With the deluge of smartphones on the market over the past few years, and the slow ramping up of mobile speeds around the country's more populated areas, it is now easier than ever to get online while on-the-go.
For a company like BitBuzz – which provides wireless internet access in public places like cafés and hotels – this would surely be a threat to its business model. However, according to Shane Deasy, founder of the company, they have turned that threat into a new opportunity.
"The business models will obviously change and have changed numerous times since we started," said Deasy. "We now have an ever-growing data-offload business which allows smartphone customers to get access to our networks in a very simplified way."
In the past, a significant source of BitBuzz's revenue was user subscriptions – individuals would pay a fee to access their network of wireless hotspots so they could browse the web while having coffee or in a hotel.
With the advent of 3G connectivity – and perhaps more importantly the devices to fully utilise that standard's potential speed – it no longer made sense to sign up to a service when you could use your phone instead.
However, while the technological shift changed the dynamic for users, it also changed it for the mobile phone networks.
As an ever-increasing number of people now use their phones to check emails, browse the web and download apps an enormous strain has been placed on the infrastructure belonging to the likes of O2 and Vodafone.
Whatever it was designed for, it was not intended to be used by thousands of people at once to access large files, video streams and downloads.
When the networks sought a solution to help them lighten the data load, Deasy said the company saw a new revenue opportunity.
"Before people were thinking that 3G would compete with WiFi but it's really not the case; people like using a cocktail of technologies depending on where they are," said Deasy. "3G is fantastic, it's a very mobile service but there are now more and more services that require a high bandwidth connection."
BitBuzz has now struck deals with a number of operators in Ireland, which allows their users to connect to the WiFi network as part of their mobile contract.
This means the likes of O2 can remove some of the traffic from its own network, BitBuzz gains a client and the user can save on data usage should that be a concern for them.
However, the next challenge is to ensure that there are hotspots in as many locations as is possible.
"We've never been as busy as we have we have been at the moment," said Deasy. "We started this year with 300 locations, we'll be up to 400 by June."
To help achieve that, BitBuzz has struck deals with a number of café chains, including Costa, Insomnia and B&Bs. It has also got its WiFi into a number of shops, service stations and restaurants around the country.
According to Deasy, they are also seeking to find ways to make their hotspots accessible on high-traffic streets, while hotels have become a significant focus for the company, particularly as it expands into the UK.
However, despite its changing business model there are still challenges facing BitBuzz.
The next generation of mobile connectivity standards – such as LTE – has the potential to offer users even faster speeds through the phone network. Unlike 3G services, it is designed to deal with high demand and so should cater better to data-heavy usage.
4G spectrum has not yet been put on offer by ComReg here, though it is thought to only be a matter of time before this happens. When it does, could it wipe out the need for networks to partner with BitBuzz?
"Some people would think that [4G and LTE] would be a threat but WiFi has been used when referring to 4G as well," said Deasy. "A lot of the new handsets are developed to allow a seamless handover between 3G, WiFi and 4G."
There is also the risk of the operators themselves building WiFi networks to serve their customers.
Eircom – owner of Meteor and eMobile – already has its own wireless network and allows existing customers to access it through its WiFiHub service.
In Britain, BT has also been heavily publicising a similar service to its customers.
However, Deasy does not think this will be a trend in the Irish scene.
"I think there seems to be a growing trend to partner [with WiFi providers]," he said. "All the operators are divesting themselves of mobile infrastructure and sharing assets; I don't think they would have an appetite to build another network themselves."
BitBuzz had grown its revenue beyond the €1mn mark in recent times, he said, and was now setting a plan in place to bring that up to €5mn as soon as possible.
To a large degree this would be focused on growth in the UK. Deasy accepts that this will be a challenge for the company but feels it has the right approach to succeed.
"We reckon over the next two years, a huge portion of our business is coming from the UK and particularly the London market," he said. "In the UK, we're mainly focusing on hotels...a lot of the stuff we're looking at is chain-based.
"It's a far more mature market but it's so much bigger, so there's a lot more opportunity."