Tom Rebbeck & Matt Yardley - Arqiva sample is representative of the UK telecoms market Although we did not set quotas for subscribers’ choice of telecoms service provider, the results

Report for Arqiva

Public Wi-Fi networks in

a 4G world

19 November 2014

Tom Rebbeck & Matt Yardley

Ref: 2000291-453

.

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Contents

1 Executive summary 1

2 Introduction 3

2.1 Overview of the sample 3

3 Results of the survey 8

3.1 The usage and perception of public Wi-Fi networks 8

3.2 Role of mobile operators in provision of public Wi-Fi networks 18

4 Implications of the survey 21

Annex A Conjoint analysis, utility scores for all price options

Annex B Responses of people in London and those aged 35–44 compared to the overall sample

Public Wi-Fi networks in a 4G world

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Copyright © 2014. The information contained herein is the property of Analysys Mason

Limited and is provided on condition that it will not be reproduced, copied, lent or

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Public Wi-Fi networks in a 4G world | 1

Ref: 2000291-453 .

1 Executive summary

In July 2014, Arqiva commissioned Analysys Mason to explore how UK consumers perceive

public Wi-Fi services. In our survey of 2000 UK residents, respondents answered questions about

how much they use public Wi-Fi networks1 and what they think of them, and how they compare to

cellular networks.

This research explores the trade-off between public Wi-Fi networks, which are typically free but

only available in certain locations (e.g. cafés, shopping centres), and cellular networks, which

involve a cost to the user but are almost ubiquitously available.

This report outlines the findings from our research, as well as indicating some of the future

implications of the results. The key conclusions are:

Public Wi-Fi networks are highly relevant for 4G subscribers. Subscribers with 4G devices

use and value public Wi-Fi networks. 4G subscribers, more than the average subscriber, place

high value on public wireless data access2, regardless of the network technology used (cellular

or Wi-Fi). The survey shows that:

— 4G subscribers are as likely as non-4G subscribers to use public Wi-Fi networks.

— 4G subscribers place a slightly higher monetary value on access to public Wi-Fi networks

than non-4G subscribers.

— 4G subscribers would be more likely than non-4G users to switch to a mobile operator that

provided public Wi-Fi connectivity as part of their contract.

Non-4G subscribers prefer public Wi-Fi networks to cellular networks. Non-4G users rate

public Wi-Fi networks more highly than cellular connectivity. These users also place a

relatively high monetary value on public Wi-Fi connectivity and would take into account the

provision of public Wi-Fi services as part of their choice of network provider. The results are

significant as the overwhelming majority of handsets in use today are 2G/3G-only and will

continue to be for a number of years (until 2018 according to Analysys Mason forecasts).

UK mobile subscribers would rather have an equal balance of cellular and public Wi-Fi

access in their data allowance rather than a bundle that favours either cellular or public

Wi-Fi access. When offered a bundle of data (e.g. 10GB) for a given price (e.g. GBP10),

respondents preferred to have an equal balance of data across public Wi-Fi and cellular

networks, rather than opting for a bundle favouring either cellular or public Wi-Fi access. This

is a strong indication of the value users place on public Wi-Fi connectivity. Furthermore 80%

of all tablets and laptops are only used on Wi-Fi networks.

1 By public Wi-Fi we mean Wi-Fi access in public places, i.e. locations outside the home or usual place of work

2 By public wireless data we mean data connectivity on all wireless networks outside of the home or office, i.e. cellular

and Wi-Fi networks


Ref: 2000291-453 .

Users see mobile operators as the most likely provider of public Wi-Fi networks. Customers

see mobile network operators as the obvious providers of Wi-Fi services outside the home or

place of work, even if customers do not fully appreciate who is providing the public Wi-Fi

infrastructure. Offering public Wi-Fi services may help win new customers and assist in

retention.

— 59% of respondents cited their mobile operator as the provider they would most likely use

for public Wi-Fi connectivity.

— 58% of respondents (and more for 4G subscribers) would churn to a mobile network

operator that provided public Wi-Fi connectivity as part of the subscription.

These findings provide a snapshot of opinion at a specific moment in time, though clearly the

market is not static: a number of factors will create changes in the market for public wireless data

connectivity. For example 4G will be rolled out and adopted more widely, while ‘Hotspot 2.0’ will

make Wi-Fi network log-in simpler. However, we do not expect that these developments will

significantly shift the balance of perceived performance of the two technologies.

Overall, the survey provides evidence that the usage and deployment of public Wi-Fi connectivity

is needed as a complement to cellular networks in order to meet consumer communications needs

in a variety of contexts. The move to 4G does not reduce the need for public Wi-Fi infrastructure

and may in fact reinforce the requirement for high-quality wireless networks of all types.


Ref: 2000291-453 .

2 Introduction

In July 2014, Arqiva commissioned Analysys Mason to explore how UK consumers perceive

public Wi-Fi services. In our survey of 2000 UK residents, respondents answered questions about

how much they use public Wi-Fi networks3 and what they think of them, and how they feel they

compare to cellular networks.

In the survey we asked about:

the respondent (age, gender etc.)

communications services used

devices used

use and satisfaction of public Wi-Fi and cellular services.

The survey was performed by Survey Sampling International4, using an online questionnaire

developed by Analysys Mason. The analysis and interpretation of the results was performed by

Analysys Mason.

This report outlines the findings from our research. We have also provided some indications of the

future implications of the work.

This report is intended to help answer some of the key questions and dispel myths surrounding

public Wi-Fi networks by providing a detailed understanding of end user perceptions of different

networks.

This report is structured as follows:

Section 2.1 provides more details of the sample and basic information on the sample of survey

respondents.

Section 3 reports the results of the survey.

Section 4 discusses the implications of the survey results with some discussion of technology

and market developments.

2.1 Overview of the sample

The sample was designed to reflect accurately the UK population

The sample of 2000 adults was designed to be representative of the UK adult population overall,

with quotas for age, sex, region and employment status. We are confident that the overall results

3 By public Wi-Fi we mean Wi-Fi access in public places, i.e. locations outside the home or usual place of work

4 See http://www.surveysampling.co.uk/


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are a good reflection of the overall UK population. For example, as can be seen in Figure 1, the

survey provides a very close match to the overall UK population.

Figure 1: UK population

by region5 [Source:

Analysys Mason, 2014]

The sample is representative of the UK telecoms market

Although we did not set quotas for subscribers’ choice of telecoms service provider, the results

from the survey give a reasonable representation of the UK market.

In Figure 2, we can see the relationship between survey respondents and UK mobile subscribers,

which we believe shows that the sample is a reasonable reflection of UK subscribers.

5 Question: “Which of the following regions best describes where you live?” n=2003

0%

2%

4%

6%

8%

10%

12%

14%

Scotlan

d

Nort

h E

ast

Wa

les

Nort

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est

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nd

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um

be

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st

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glia

So

uth

Ea

st

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do

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So

uth

West

Nort

he

rn Ire

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d

Survey UK population


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Figure 2: Share of

mobile network

providers6 [Source:


In Figure 3, we can see the relationship between survey respondents and the UK’s fixed broadband

market. Again, the match is not exact, but we believe it is close enough to provide a reasonable

representation of the UK market.

Figure 3: Share of

home broadband

provider [Source:


The respondents appear to be slightly more technologically sophisticated than the UK average

The results of the survey suggest that our respondents are more technologically sophisticated than

the overall market as a whole. Online surveys by definition tend to exhibit a slight bias in towards

people who are slightly more technologically literate than the average. While we do not believe

6 All subscribers to MVNOs have been included with the host network operator to make the results comparable with

published market data. All data on market shares is taken from Analysys Mason’s Telecoms Market Matrix, Western Europe 1Q 2014 (see http://www.analysysmason.com/Research/Content/Data-set/TMM-WE/#21%20July%202014)

0%

5%

10%

15%

20%

25%

30%

35%

40%

EE O2 Vodafone 3 Others

Survey Q1 2014, UK market

0%

5%

10%

15%

20%

25%

30%

35%

BT Sky TalkTalk Virgin Media Others

Survey Q1 2014, UK market


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this affects the main findings of the survey, it means we need to exercise some caution in

translating the results to the population as a whole.

The evidence for concluding that the respondents may be somewhat more technologically

advanced than the general population can be seen in two metrics:

Firstly, and as can be seen in Figure 4, while across the overall UK market, around 75% of UK

mobile subscribers had a smartphone7, in our survey the figure was higher, at 95%.

Secondly, almost 30% of the respondents believed that they have a 4G device (Figure 5),

whereas for the overall market, 4G devices account for closer to 10% of handsets. The

difference between the survey responses and the market may be down to self-reporting. While

the question was explicit (“Does your mobile phone service include 4G?”) the results reflect

what the respondents think they have, rather than what they actually have (e.g. an owner of an

iPhone 4 may believe that it is a 4G device). The survey results remain valid as we are

concerned here with perceptions of services and service quality, which may differ from actual

performance.

Figure 4: Percentage of smartphone owners, survey

results compared to UK market8 [Source: Analysys

Mason, 2014]

Figure 5: Ownership of a 4G handset, survey results

compared to UK market9 [Source: Analysys Mason,

2014]

7 Source: Analysys Mason “Western Europe telecoms market: concise trends and forecasts (8 countries) 2014–

2019”, http://www.analysysmason.com/Research/Content/Regional-forecasts-/WE-forecasts-concise-8-Jul2014-RDDG0/

8 Question: “Is your primary mobile phone a smartphone?” n=2003;

9 Question: “Does your mobile phone service include 4G?” n=2003

95%

77%

Survey UK market

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Survey UK market

Yes No Don't know


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Respondents were well placed to answer questions on Wi-Fi network usage from devices other

than mobile handsets

The survey was filtered so that all respondents had a mobile handset. As part of the survey, we

also asked respondents about access to devices10

other than mobile handsets. The vast majority of

respondents to our survey had access to multiple Wi-Fi-enabled devices. As can be seen in Figure

6, just 4% of the sample did not have access to a Wi-Fi device other than their handset.

Respondents were therefore in a good position to answer question on Wi-Fi network usage.

Figure 6: Access to

connected devices

other than mobile

handsets11

[Source:


10

Note that the survey did not ask about device ownership, but access to a device, so including respondents who may

use a tablet on a regular basis even if it does not belong to them ~ for example within the family or provided by work.

11 Question: “Which of the following devices do you own, or have regular access to (for example, through someone

who lives with you)?” n=2003

0% 20% 40% 60% 80% 100%

None of these

Other

Handheld console

E-book reader

Tablet

Laptop PC


Ref: 2000291-453 .

3 Results of the survey

The main survey focused on two areas:

the usage and perception of public Wi-Fi networks compared to cellular networks

the role of mobile operators in providing public Wi-Fi services.

Each of these is covered in a separate section below.

3.1 The usage and perception of public Wi-Fi networks

The key findings relating to the usage and perception of public Wi-Fi networks are:

Public Wi-Fi networks are highly relevant for 4G subscribers. Subscribers with 4G devices

use and value public Wi-Fi networks. We believe that 4G subscribers, more than the average

subscriber, place high value on wireless data, regardless of the network technology used

(cellular or Wi-Fi). The survey shows that:

— 4G subscribers are as likely as non-4G subscribers to use public Wi-Fi networks.

— 4G subscribers place a slightly higher monetary value on access to public Wi-Fi networks

than non-4G subscribers.

— 4G subscribers would be more likely than non-4G users to switch to a mobile operator that

provided public Wi-Fi as part of their contract.

Non-4G subscribers prefer public Wi-Fi networks to cellular networks. Non-4G users rate

public Wi-Fi networks more highly than cellular connectivity. These users also place a

relatively high monetary value on public Wi-Fi connectivity and would take into account the

provision of public Wi-Fi services as part of their choice of network provider. The results are

significant as the overwhelming majority of handsets in use today are 2G/3G-only and will

continue to be for a number of years (until 2018 according to Analysys Mason forecasts).

UK mobile subscribers would rather have an equal balance of cellular and public Wi-Fi

access in their data allowance rather than a bundle that favours either cellular or public

Wi-Fi access. When offered a bundle of data (e.g. 10GB) for a given price (e.g. GBP10),

respondents preferred to have a balance of data across public Wi-Fi and cellular networks,

rather than opting for a bundle favouring either cellular or public Wi-Fi access. This is a strong

indication of the value users place in public Wi-Fi connectivity. Furthermore, 80% of all

laptops and tablets are only used on Wi-Fi networks.


Ref: 2000291-453 .

The vast majority of respondents use public Wi-Fi networks, and 4G subscribers are only

marginally less likely to use them than others

We asked respondents about their usage of public Wi-Fi networks. As can be seen in Figure 7,

more than three quarters of respondents use public Wi-Fi services, with very little difference

between the results from non-4G users and the results from users who believe they are on 4G.

Public Wi-Fi connectivity is relevant to all users.

Figure 7: Portion of

respondents that use

public Wi-Fi networks12

[Source: Analysys

Mason, 2014]

Price emerges as the main reason for using public Wi-Fi connectivity; though for 4G users the

speed of the alternative cellular network matters greatly

We asked respondents why they choose to use public Wi-Fi connectivity. As is to be expected, for

the majority, price was the key driver for usage of public Wi-Fi networks (see Figure 8). In many

locations (e.g. cafés, shopping centres) access to public Wi-Fi access is provided to the user for no

additional charge.

12

Questions: “Do you ever use Wi-Fi offered by your mobile phone provider/home broadband provider/other Wi-Fi

providers outside of your home or usual place of work (e.g. public transport, shopping centres, cafes)? n=2003

76% 75% 76%

Respondents who usepublic Wi-Fi networks

4G respondents whouse public Wi-Fi

networks

Non-4G respondentswho use public Wi-Fi

networks


Ref: 2000291-453 .

Figure 8: Highest rated

reason for using public

Wi-Fi networks.

Percentage of

respondents giving

highest response13

[Source: Analysys

Mason, 2014]

Price is not the only factor affecting usage of public Wi-Fi infrastructure. Almost a fifth of users

(19%) connect to a public Wi-Fi network because no mobile signal is available. This figure is

slightly higher for 4G users (23%).

Differences between 4G and non-4G users are striking. Price is notably less of a constraint for 4G

users. This may be a short-term effect – early adopters of 4G may well have more disposable

income and larger data bundles and so are less price-sensitive than other users. The relative

importance of the mobile data speed between 4G and non-4G users is notable, with 4G users much

more likely to use (faster) public Wi-Fi connectivity. Reasons for this difference could be:

Many 4G subscribers spend time outside 4G coverage, and so public Wi-Fi access may be a

faster option than resorting to 3G or 2G coverage.

4G users may be more demanding about data speeds (which is partly why they are on 4G) and

so will use a public Wi-Fi network when it appears to be better than the cellular network (e.g.

when no 4G connectivity is available).

Lack of availability and inconvenience are the key barriers to using public Wi-Fi networks

Respondents were asked about the reasons for not using public Wi-Fi services. The highest rated

reasons given for not connecting to public Wi-Fi infrastructure, shown in Figure 9, are lack of

availability (“can’t find it”) or the effort required to establish a connection (“too much hassle to

connect”). As will be discussed in Section 4, we expect some of these barriers to be reduced over

time, for example as ‘Hotspot 2.0’ removes the need for subscribers to manually log on to a Wi-Fi

network.

13

Question: “When you choose to use [public Wi-Fi], on what do you base this decision? Please rank all options that

apply in order of their relevance/importance to you.” Response options were: I have no signal for my mobile data connection, It is faster than my mobile data connection, It is free, I pay for it, but it is cheaper than mobile data, I don't want to use up my mobile data allowance, I'm not sure (exclusive), Other, please specify. n=1450

24%

23%

45%

11%

16%

63%

16%

19%

56%

0% 10% 20% 30% 40% 50% 60% 70%

Faster than mymobile data signal

No mobiledata signal

It is free

Allrespondents

Non-4G users 4G users


Ref: 2000291-453 .

Figure 9: Highest rated

reason for not using

public Wi-Fi networks.

Percentage of

respondents giving

highest response14

[Source: Analysys

Mason, 2014]

Results are broadly consistent between 4G and non-4G users (though 4G users are more sensitive

to the quality of public Wi-Fi networks).

In performance terms, respondents believe that public Wi-Fi networks are better than cellular

networks in general

Respondents were asked two sets of questions about the overall performance of public Wi-Fi and

cellular networks.

We asked respondents to score the performance of public Wi-Fi, cellular and (where

applicable) 4G networks. These questions were asked in isolation with no comparison between

different technologies.

We also asked respondents to score public Wi-Fi services relative to cellular connectivity and

(where applicable) 4G connectivity. We asked whether, overall, public Wi-Fi or cellular

connectivity was superior.

Overall, respondents believe that public Wi-Fi networks are better than non-4G cellular networks

but not as good as 4G networks. When asked for the absolute score for services in isolation, as can

be seen in Figure 10 and as we would have expected, 4G connectivity scored best, followed by

public Wi-Fi and then cellular networks. We see similar results when the panel was asked about

the relative performance of networks.

14

Question: “On the occasions you DON'T use this service, on what do you base this decision? Please rank all options

that apply in order of their relevance/importance to you.” Response options were: I cannot find it, I have to pay for it and I think it should be free, I am willing to pay for it but it is too expensive/not good value for money, It is too much of a hassle to connect to, The quality of the connection isn't good enough, I don't trust the provider with my personal data, I’m not sure (exclusive), Other, please specify. n=1052

26%

34%

24%

23%

23%

32%

24%

27%

29%

0% 10% 20% 30% 40%

Too much hassleto connect

Quality notgood enough

Can't find it

Allrespondents

Non-4G users 4G users


Ref: 2000291-453 .

Figure 10: Perceptions of performance of all cellular

networks, public Wi-Fi and 4G networks15

[Source:


Figure 11: Relative performance of public Wi-Fi

networks compared to cellular and 4G networks16

[Source: Analysys Mason, 2014]

The strong performance of public Wi-Fi connectivity is important as most tablets will never use a

cellular network

We asked respondents with access to a tablet whether their tablet

is capable of cellular connectivity

if so, whether cellular connectivity is used.

As can be seen in Figure 12, the survey found that the majority of tablets do not have cellular

connectivity, and fewer than 40% use cellular connectivity. The majority of tablet users therefore

have no alternative to public Wi-Fi networks when out of the home.

In Figure 12, we also show the results from a previous Analysys Mason tablet survey, which asked

a very similar question about cellular connectivity. This comparison suggests that usage of cellular

connectivity among respondents to the current survey is higher than for the market as a whole,

which may reflect the fact that respondents are more technologically sophisticated than average

consumers. For devices other than their primary handset, most UK subscribers will only have the

15

Questions: “How would you score the following when you are using the data connection of your mobile phone (e.g.

your 3G connection, NOT Wi-Fi)?” n=1247; “How would you score the following when you are using the 4G data connection of your mobile phone?” n=587; “How would you score your satisfaction with any Wi-Fi services you use outside your home or usual place of work?” n=2003

16 Question: “How do you perceive mobile data compared to Wi-Fi when outside your home and usual place of work?”

n=2003. Note that the positive/negative used on the chart is used to illustrate the results only. In the questionnaire, respondents were simply asked which service was superior on a five point scale

1.0

2.0

3.0

4.0

5.0

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5 =

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atisfie

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Cellular networks, overall

4G networks

Public Wi-Fi networks

-0.20 -0.10 - 0.10 0.20

Allusers

4Gusers

Non-4Gusers

Relative result

Preference for

Wi-Fi

Preference for

cellular


Ref: 2000291-453 .

option of public Wi-Fi connectivity. From a previous survey performed by Analysys Mason, only

17% of UK consumers use tethering17

.

Figure 12: Usage of

tablet on cellular

networks from this

survey18

and from

Analysys Mason’s

previous tablet survey19

[Source: Analysys

Mason, 2014]

The Van Westerndorp price analysis suggests that users place a higher value on public Wi-Fi

connectivity than is commonly assumed

To gain a view of the pricing for cellular, public Wi-Fi and 4G services, respondents were asked a

series of questions about an unlimited package of public Wi-Fi or cellular data. Respondents were

asked at what price the package would be

too expensive to be considered

expensive but worth considering

very good value for money

priced so low that the quality could not be very good.

Based on the intersection of the range of results to these four questions, the Van Westerndorp price

sensitivity analysis provides an indication of the range of prices people are willing to pay.

The results of this for the entire sample are illustrated in Figure 13.

17

See The Connected Consumer Survey 2013: smartphones, mobile data access and monetisation,

http://www.analysysmason.com/Research/Content/Reports/CCS-smartphone-data-monetisation-Aug2013-RDMM0/ Question: “Do you ever use your smartphone for 'tethering'?“ n=6610

18 Questions: “Which of the following devices do you own, or have regular access to (for example, through someone

who lives with you)?” n=2003; “Does your tablet have a mobile broadband connection (i.e. 3G/4G)?, n=1226; “How often do you use your tablet's 3G/4G mobile broadband connection?” n=569

19 Source: Analysys Mason “Tablet survey worldwide 2013: devices, data plans and connectivity – current usage,

future intentions”, http://www.analysysmason.com/Research/Content/Reports/Tablet-survey-worldwide-Nov2013-RDMM0/#15%20November%202013. The specific question asked was: “Is your tablet 3G/4G compatible, or is it only able to support Wi-Fi connectivity?”

0%

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Tablets with cellularconnectivity

Tablets that usecellular connectivity

Tablets that usecellular connectivity

often

Survey Analysys Mason's previous tablet survey

http://www.analysysmason.com/Research/Content/Reports/CCS-smartphone-data-monetisation-Aug2013-RDMM0/

http://www.analysysmason.com/Research/Content/Reports/Tablet-survey-worldwide-Nov2013-RDMM0/#15%20November%202013

http://www.analysysmason.com/Research/Content/Reports/Tablet-survey-worldwide-Nov2013-RDMM0/#15%20November%202013


Ref: 2000291-453 .

Figure 13: Range of

values assigned to

unlimited monthly data

bundle, all respondents

[Source: Analysys

Mason, 2014]

Looking at the ranges, some of the responses are to be expected:

The maximum price of cellular connectivity is higher than public Wi-Fi connectivity. Given

the greater utility of cellular networks (i.e. they can be accessed in a wider range of locations)

this output is in line with expectation.

The minimum price of cellular connectivity is higher than for public Wi-Fi connectivity.

Again, it is to be expected that the minimum value of cellular connectivity is higher than

public Wi-Fi connectivity due to the greater utility.

However some of the results are more surprising and illustrate the value users place on public Wi-

Fi networks.

Subscribers place relatively high value on public Wi-Fi connectivity. Considerable overlap exists

between the values for public Wi-Fi and cellular connectivity. Given the additional utility of

cellular networks, it would be reasonable to assume that the difference between Wi-Fi and cellular

connectivity would be greater.

Below, we see the same results but this time for 4G users (Figure 14) and non-4G users

(Figure 15).

0

2

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20

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P


Ref: 2000291-453 .

Figure 14: Range of values assigned to unlimited

monthly data bundle, 4G users [Source: Analysys

Mason, 2014]

Figure 15: Range of values assigned to unlimited

monthly data bundle, non-4G users [Source:


In both cases, cellular connectivity is valued slightly higher than public Wi-Fi access, but again,

there is considerable overlap between the values respondents assigned to public Wi-Fi and cellular

connectivity.

There are two distinct messages about 4G subscribers:

4G users value all wireless data connectivity more highly than other respondents. This is

as we would expect – 4G users are a self-selecting group who value wireless data connectivity

sufficiently highly that they have chosen (or believe they have chosen) 4G contracts.

4G users place greater value on public Wi-Fi connectivity than non-4G users. It might be

reasonable to expect that 4G subscribers would place less value on public Wi-Fi connectivity

than other users. In fact, the opposite is true. It appears that 4G subscribers place greater value

on data connectivity regardless of the network technology used (cellular or Wi-Fi): our 4G

respondents value public Wi-Fi access more highly than the rest of the market.

As with the result comparing network performance, we need to be cautious about placing too

much emphasis on these answers. For example, we cannot know what respondents had in mind,

when asked to place a price on unlimited public Wi-Fi access. It is possible that respondents were

considering unlimited public Wi-Fi connectivity to mean a network with a much greater coverage

than is currently the case. Nonetheless, the results point to the considerable value that all users

place on public Wi-Fi connectivity.

0

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GB

P


Ref: 2000291-453 .

Respondents clearly preferred a balance of public Wi-Fi and cellular connectivity

In the final question on usage, respondents were asked to rank a range of different options. In

assessing how they ranked these different options we can gain some insight into the priorities of

our panel.

Respondents were asked to rank a mix of:

data allowances (500MB–2GB)

price points (GBP6–15)

connectivity type (i.e. splitting the data allowance between public Wi-Fi networks and the

cellular network by varying proportions).

The conventional view would be to expect that users would opt for a greater weighting of cellular

data as this can be used in a wider range of locations, followed by a 50% mix of cellular and public

Wi-Fi connectivity, with the package that was weighted to public Wi-Fi connectivity being the

least favoured option.

In fact the results of this analysis shows that respondents prefer the data allowance to be split

equally between cellular and public Wi-Fi networks. This was deemed more attractive than a split

in which a larger share of the allowance can be used on the cellular network.

In Figure 16, we can see the utility scores20

for each of the 2GB/GBP10 options. We can see that

users’ preference by network was:

1. An equal 50:50 split of data on the public Wi-Fi and cellular networks

2. A 75:25 split of data in favour of cellular networks

3. A 75:25 split of data in favour of public Wi-Fi networks.

20

Note that the utility scores in themselves carry no meaning. What we are interested here is the relative utility score

of the different options.


Ref: 2000291-453 .

Figure 16: Conjoint

analysis, utility scores

for 2GB, GBP10

options21

[Source:


In Figure 17 and Figure 18, we see the same order of results for 1GB and 500MB data volumes.

Respondents, again, preferred to have their data allowance balanced between cellular and public

Wi-Fi networks, rather than opt for a package weighted in favour of purely cellular connectivity.

21

Questions: “When considering data connectivity outside of the home as part of a monthly bill, which of the following

combinations of connection and data allowance would be the most useful to you? Please rank all 9 options in order of preference (1 = most favoured, 9 = least favoured), 125MB cellular, 375MB Wi-Fi;250MB cellular, 250MB Wi-Fi;375MB cellular, 125MB Wi-Fi;250MB cellular, 750MB Wi-Fi;500MB cellular, 500MB Wi-Fi;750MB cellular, 250MB Wi-Fi; 500MB cellular, 1.5GB Wi-Fi;1GB cellular, 1GB Wi-Fi;1.5GB cellular, 500MB Wi-Fi” n=2003, “When considering data connectivity outside of the home as part of a monthly bill, which of the following combinations of price and data allowance would be the most useful to you? Please rank all 9 options in order of importance (1 = most favoured, 9 = least favoured), 500MB, £6;1GB, £6; 2GB, £6;500MB, £10;1GB, £10; 2GB, £10; 500MB, £15; 1GB, £15; 2GB, £15”, n=2003.

0

25

50

75

100

125

150

2G

B

2G

B

2G

B

Utilit

y s

co

re50% public Wi-Fi

25% public Wi-Fi

75% public Wi-Fi


Ref: 2000291-453 .

Figure 17: Conjoint analysis, utility scores for 1GB,

GBP10 options21


Figure 18: Conjoint analysis, utility scores for

500MB, GBP10 options21

Source: Analysys Mason,

2014]

The results reinforce the idea that users place significant value on public Wi-Fi networks.

As with the previous results, some caution is needed in assessing these results. What users say they

prefer may not be reflected in their actual choices and we cannot be certain about how the

respondents interpreted the question. For example, while limitations on the data allowance are

usual for cellular contracts, public Wi-Fi access is typically limited in duration of time and not

volume of data used. This difference may make it harder for users to compare the different

options.

While would be prudent not to draw too firm a set of conclusions from the data, we believe that

this assessment of different options highlights once again the value that users get from public Wi-

Fi networks.

3.2 Role of mobile operators in provision of public Wi-Fi networks

We asked respondents about suppliers of public Wi-Fi networks and which organisations they

believed were best placed to provide public Wi-Fi networks.

Our key findings are that:

users see mobile operators as the most likely provider of public Wi-Fi networks

respondents would consider moving provider in order to receive access to public Wi-Fi

networks for no additional cost.

0

25

50

75

100

125

150

1G

B

1G

B

1G

B

Utilit

y s

co

re

50% public Wi-Fi

25% public Wi-Fi

75% public Wi-Fi

0

25

50

75

100

125

150

500

MB

500

MB

500

MB

Utilit

y s

co

re

50% public Wi-Fi

25% public Wi-Fi

75% public Wi-Fi


Ref: 2000291-453 .

Respondents would prefer to take public Wi-Fi connectivity provided by their mobile network

supplier

Consumers have a clear expectation that public Wi-Fi connectivity has a strong fit with their

mobile network provider. We asked respondents who they would be most likely to use for public

Wi-Fi access. 58% ranked their mobile service provider as the most likely option (see Figure 19)

significantly ahead of their home broadband provider (26%).

The results are not especially surprising as public Wi-Fi connectivity is used while the subscriber

is away from home and on a mobile device (e.g. handset, tablet) and so may be a logical extension

of the existing cellular contract. However, it is worth noting that some of the main providers of

public Wi-Fi connectivity are not mobile but fixed operators (e.g. BT, Sky) and Wi-Fi-only

operators (e.g. Boingo).

Figure 19: Preferred

supplier of public Wi-Fi

connectivity22

[Source:


More than half of respondents say they would switch to a provider that offered free public Wi-Fi

network access; 4G subscribers are even more likely to switch

We asked consumers if they would be willing to change their mobile network provider if offered

unlimited public Wi-Fi access, for no additional charge, from a different provider. While we would

expect a strong portion of users to agree, the results are nevertheless instructive.

A clear majority of subscribers would switch to a provider offering unlimited public Wi-Fi

connectivity as part of the contract. Even if the result exaggerates the impact of unlimited Wi-

22

Question: “Which provider would you be most likely to connect to if they offered Wi-Fi outside the home and your

usual place of work?” n=2003

0% 10% 20% 30% 40% 50% 60%

Other

A 3rd partyprovider

Another mobileservice provider

Your homebroadband provider

Your mobileservice provider


Ref: 2000291-453 .

Fi access, it at least indicates that public Wi-Fi services would be part of a consumer’s

selection criteria when considering providers.

The attraction of unlimited Wi-Fi access is even greater for 4G subscribers. A higher portion

of 4G subscribers would switch to a provider offering unlimited public Wi-Fi connectivity

than for the market as a whole. This result indicates that:

— 4G subscribers appear to be most interested in having access to data connectivity,

regardless of the network technology used (cellular or WiFi)

— 4G does not reduce subscribers’ interest in public Wi-Fi access. Indeed, 4G subscribers are

more interested in public Wi-Fi networks than non-4G subscribers.

Figure 20: Percentage

of respondents willing

to change provider for

unlimited public Wi-Fi

access for no additional

cost23

[Source:


23

Question: “Would you switch mobile provider if offered unlimited public Wi-Fi for no additional cost?” n= 1834

59%66%

56%

All respondents 4G users Non-4G users


Ref: 2000291-453 .

4 Implications of the survey

Most subscribers will still be using non-4G devices at the end of 2017; public Wi-Fi connectivity

offers a way to improve their data connectivity experience

As was seen in Figure 10 and Figure 11, non-4G users rate public Wi-Fi networks more highly

than non-4G networks. This result is important as, according to Analysys Mason’s forecasts, at the

end of 2017, fewer than 50% of subscribers will have a 4G handset and even at the end of 2019

more than a third of subscribers will be on sub-4G devices.

Figure 21: Mobile

subscribers by handset

generation based on

Analysys Mason

forecast24

[Source:


4G users see public Wi-Fi access as a valuable addition to standard cellular solutions and we do

not expect this to change

In developed markets with modern 3G and 4G networks we have yet to see a significant

substitution of user traffic when 4G or Wi-Fi services were added to an existing mobile network

service. Rather, usage of both cellular and Wi-Fi networks tends to increase with the added (and

improved) connectivity. We have long tracked a difference in usage patterns of users of cellular

and Wi-Fi services, especially in relation to key applications. For example, bulk video is mainly

consumed over Wi-Fi connections.

Operators’ initiatives to provide greater coverage and improved performance look set to be based

around the concept of small cells, which will increase the density of the UK’s 4G networks. The

small cell hardware is likely to include a Wi-Fi radio in addition to the cellular radio. The UK

24

Source: Analysys Mason “Western Europe telecoms market: concise trends and forecasts (8 countries) 2014–

2019”, http://www.analysysmason.com/Research/Content/Regional-forecasts-/WE-forecasts-concise-8-Jul2014-RDDG0/

27%22%

18% 15% 12% 11%

62%

57%

48%

38%

30%24%

11%

21%

34%

47%

57%65%

2014 2015 2016 2017 2018 2019

4G

3G

2G


Ref: 2000291-453 .

already has one of the highest levels of public Wi-Fi deployment and usage. The deployment of

small cells should further improve indoor and outdoor 3G and 4G coverage.

The UK’s largely independent fixed-line industry views Wi-Fi networks as an extension of its

broadband service and uses it to defend its market share without fear of cannibalisation. Of the five

largest public Wi-Fi network service providers, only one (Telefónica UK) is a mobile network

operator. From the information released by these service providers, we calculate that in the UK

public Wi-Fi accounted for traffic equivalent to about 24% of all public wireless data traffic in

2012 (i.e. data traffic on public Wi-Fi and cellular networks outside the home), and that this rose to

about 35% in 2013 (Figure 22). This figure includes so-called ‘homespot traffic’ (the sharing of a

private Wi-Fi router with the public).

Figure 22: Public Wi-Fi

traffic volumes and as a

proportion of all public

wireless data [Source:


While the survey provides a snapshot of opinion at a given moment in time, the market is not

static. A number of factors will change the market for public Wi-Fi and cellular connectivity. For

example, developments in public Wi-Fi networks include support for 802.11ac 5GHz technology

which should suffer less interference than 2.4GHz technology; 802.11ac phase 2, will also support

Multi-User MIMO (MU-MIMO), which will increase the number of concurrent devices that can

use a single Wi-Fi access point; advances in cellular technology, such as LTE-A, will likely take at

least the next three years to deploy and are likely to require new devices to support the upgrade

(compared to the current 4G devices being sold). Next-generation Hotspot 2.0 and Passpoint will

serve to improve quality of Wi-Fi service and user experience.

In Figure 23 we provide a summary of the main developments that will affect both 4G network

and public Wi-Fi network performance. The impact of each factor will differ but in our view there

is nothing to suggest a dramatic change in the balance in performance that would affect our

interpretation of the results.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50

100

150

200

250

300

350

400

450

500

2012 2013 2014 2015 2016 2017

Pe

tab

yte

s

Public Wi-Fi data traffic

Percentage of public data traffic on public Wi-Fi networks

Forecast


Ref: 2000291-453 .

Figure 23: Summary of the main forthcoming developments in 4G and public Wi-Fi networks [Source:


Developments favouring 4G networks Developments favouring public Wi-Fi networks

Greater coverage of 4G. According to Ofcom, at

the end of June, 73% of UK premises had 4G

network coverage from at least one provider. By

the end of 2017, at least 95% of premises will

receive 4G connectivity from more than one

mobile network.

Increased usage of 4G. As more consumers

upgrade to 4G devices and as these devices

become more capable, demands on the network

will increase, potentially reducing available

capacity per user.

Increased speeds of 4G networks. The first roll-

outs of LTE-A are expected in early 2015 and will

bring speeds over 200Mbit/s and possibly up to

300Mbit/s to users. Improved backhaul capacity

tied to LTE-A deployments will increase per-site

throughput.

Improved Wi-Fi performance. Fixed-line

upgrades and improvements provide increased

throughput for Wi-Fi access points. With the

number of Wi-Fi access points increasing, usage

is spread over a larger number of APs and

backhaul lines. 802.11ac phase 2 will support MU-

MIMO, increasing the number of devices that can

use an AP concurrently

Passpoint. Increased deployment of Hotspot 2.0

and support of Passpoint by larger number of key

device vendors (Apple, Samsung, etc.) will mean

that users no longer need to log on manually to a

public Wi-Fi hotspot, reducing a major barrier to

usage. Users will be connected to ‘known’ Wi-Fi

providers, increasing security for users.

Increased roll-out of public Wi-Fi hotspots.

The cost of 4G devices will decrease. Device developments. Every 4G mobile device

also supports Wi-Fi and many devices (such as

most laptops and tablets) only support Wi-Fi. We

expect devices to be increasingly able to work with

both Wi-Fi and cellular networks simultaneously,

either selecting the network with the greater

capacity or bond both Wi-Fi and cellular channels

to increase performance

Public Wi-Fi networks in a 4G world | A–1

Ref: 2000291-453 .

Annex A Conjoint analysis, utility scores for all price

options

Figure 24 shows all of the utility scores for GBP10 options. As discussed in Section 3.1, our panel

preferred an equal split of public Wi-Fi and cellular connectivity over a package weighted in

favour of cellular or public Wi-Fi connectivity.

Figure 24: Conjoint analysis, utility scores for GBP10 options25


25

Questions: “When considering data connectivity outside of the home as part of a monthly bill, which of the following

combinations of connection and data allowance would be the most useful to you? Please rank all 9 options in order of preference (1 = most favoured, 9 = least favoured), 125MB cellular, 375MB Wi-Fi;250MB cellular, 250MB Wi-Fi;375MB cellular, 125MB Wi-Fi;250MB cellular, 750MB Wi-Fi;500MB cellular, 500MB Wi-Fi;750MB cellular, 250MB Wi-Fi; 500MB cellular, 1.5GB Wi-Fi;1GB cellular, 1GB Wi-Fi;1.5GB cellular, 500MB Wi-Fi” n=2003, “When considering data connectivity outside of the home as part of a monthly bill, which of the following combinations of price and data allowance would be the most useful to you? Please rank all 9 options in order of importance (1 = most favoured, 9 = least favoured), 500MB, £6;1GB, £6; 2GB, £6;500MB, £10;1GB, £10; 2GB, £10; 500MB, £15; 1GB, £15; 2GB, £15”, n=2003.

0

20

40

60

80

100

120

140

2G

B

2G

B

2G

B

1G

B

500

MB

1G

B

500

MB

1G

B

500

MB

Utilit

y s

co

re

50% public Wi-Fi

25% public Wi-Fi

75% public Wi-Fi

Public Wi-Fi networks in a 4G world | A–2

Ref: 2000291-453 .

Figure 25 shows the results for all prices. Again, the option of an equal balance of public Wi-Fi

and cellular connectivity is preferred over a data bundle with a larger allowance on cellular

networks.

Figure 25: Conjoint analysis, utility scores for all price options [Source: Analysys Mason, 2014]

0

20

40

60

80

100

120

140

160

180

200

GB

P6

, 2

GB

GB

P6

, 2

GB

GB

P6

, 2

GB

GB

P6

, 1

GB

GB

P6

, 5

00

MB

GB

P6

, 1

GB

GB

P1

0,

2G

B

GB

P6

, 5

00

MB

GB

P1

5,

2G

B

GB

P6

, 1

GB

GB

P6

, 5

00

MB

GB

P1

0,

2G

B

GB

P1

5,

2G

B

GB

P1

0,

2G

B

GB

P1

5,

2G

B

GB

P1

0,

1G

B

GB

P1

5,

1G

B

GB

P1

0,

50

0M

B

GB

P1

5,

50

0M

B

GB

P1

0,

1G

B

GB

P1

5,

1G

B

GB

P1

0,

50

0M

B

GB

P1

5,

50

0M

B

GB

P1

0,

1G

B

GB

P1

5,

1G

B

GB

P1

0,

50

0M

B

GB

P1

5,

50

0M

B

Utilit

y s

co

re

50% public Wi-Fi

25% public Wi-Fi

75% public Wi-Fi

Public Wi-Fi networks in a 4G world | B–1

Ref: 2000291-453 .

Annex B Responses of people in London and those aged

35–44 compared to the overall sample

In the second annex, we have compared the overall results with two subsets of users:

people resident in London

people between 35–44 years of age

Our sample provided large enough subsets for us to do meaningful analysis on this data. 260

respondents lived in London and we had 354 respondents in the 35–44 age bracket.

As can be seen in Figure 26, both of our subsets were slightly more likely than the average

respondent to use a public Wi-Fi network. For London respondents, this may be because of

slightly greater availability of public Wi-Fi connectivity in the capital.

Figure 26: Profile of

users of public Wi-Fi

networks26

[Source:


26

Questions: “Do you ever use Wi-Fi offered by your mobile phone provider/home broadband provider/other Wi-Fi

providers outside of your home or usual place of work (e.g. public transport, shopping centres, cafes)? n=2003

76% 78% 77%

Respondents who usepublic Wi-Fi networks

People in London whouse public Wi-Fi

networks

People aged 35-44who use public Wi-Fi

networks


Ref: 2000291-453 .

Figure 27 compares the reasons given by our panel for using public Wi-Fi networks. For people

living in London, and those aged 35–44, price is less of a driving factor. As both groups are likely

to be slightly wealthier than the average respondent, this result is unsurprising.

Significantly however, both groups see speed as a key reason for using public Wi-Fi networks;

people aged 35–44, 24% ranked speed as the top reason for choosing public Wi-Fi over the

cellular network.

Figure 27: Principal

reason for using public

Wi-Fi networks27

[Source: Analysys

Mason, 2014]

27

Question: “When you choose to use [public Wi-Fi], on what do you base this decision? Please rank all options that

apply in order of their relevance/importance to you.” n=1450

22%

19%

50%

24%

18%

51%

16%

19%

56%

0% 10% 20% 30% 40% 50% 60%

Faster than mymobile data signal

No mobiledata signal

It is free

Allrespondents

People aged35-44

People inLondon


Ref: 2000291-453 .

Looking at the reasons for not using public Wi-Fi networks, availability was much less of an issue

for respondents in London than for the rest of the sample; only 21% of these respondents ranked

availability as the main reason for not using public Wi-Fi connectivity. For respondents in London,

quality and convenience are more important factors in why they do not use public Wi-Fi access.

Figure 28: Principal

reason for not using

public Wi-Fi networks 28

[Source: Analysys

Mason, 2014]

28

Question: “On the occasions you DON'T use this service, on what do you base this decision? Please rank all options

that apply in order of their relevance/importance to you.” n=1052

27%

33%

21%

22%

29%

25%

24%

27%

29%

0% 5% 10% 15% 20% 25% 30% 35%

Too much hassleto connect

Quality notgood enough

Can't find it

Allrespondents

People aged35-44

People inLondon


Ref: 2000291-453 .

The perception of performance across different wireless network technologies is similar across the

two subsets and the overall sample. Notably, people living in London rank the quality of all

network technologies slightly higher than the overall sample. The overall ranking of networks is

consistent across all respondent types.

Figure 29: Perceptions of performance of all cellular networks, public Wi-Fi networks and 4G networks29


29

Questions: “How would you score the following when you are using the data connection of your mobile phone (e.g.

your 3G connection, NOT Wi-Fi)?” n=1247; “How would you score the following when you are using the 4G data connection of your mobile phone?” n=587; “How would you score your satisfaction with any Wi-Fi services you use outside your home or usual place of work?” n=2003

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Cellularnetworks,

overall

4Gnetworks

Overallview of

public Wi-Fi

networks

Cellularnetworks,

overall

4Gnetworks

Overallview of

public Wi-Fi

networks

Cellularnetworks,

overall

4Gnetworks

Overallview of

public Wi-Fi

networks

All respondents People in London People aged 35-44

(1 =

ve

ry u

nsa

tisfied

; 5

= v

ery

sa

tisfie

d)

Documents

Tom Rebbeck & Matt Yardley - Arqiva sample is representative of the UK telecoms market Although we did not set quotas for subscribers’ choice of telecoms service provider, the results