Do you want some Wi-Fi with that beer?

6 thoughts on “Do you want some Wi-Fi with that beer?”

  1. Hi Om,
    Like yourself, we also agree that the advent of sponsored bandwidth is absolutely a big trend and very compelling for merchants, content providers, and public service agencies (local and state education, job training, healthcare) to engage in. In essence, this trend is about enabling “free delivery” of bytes by an interested party to an end user where both parties (sender and receiver) benefit. Not only does it allow connectivity for no (or low) cost to end users (a great way to provide value to end users and “connect the unconnected”), but it also ensures that entities seeking to “build a road out” to end-users have a compelling means of doing so.
    Taking the Wi-Fi models one step further, the next iteration for this trend will be found on data capped cell phones, tablets, and PCs themselves where the bandwidth (3G, DSL, etc.) is paid for “toll-free” (e.g. like 1-800 voice) by the provider of the apps themselves in the form of self monitoring apps (Android, Windows, etc.) that are pre-loaded with free bandwidth. Our firm Box Top Solutions has been looking into these developments and anticipate that as markets see more and more data caps, people will save the bytes they purchased themselves for higher value content (as scarcity dictates), thereby driving content providers to aggressively compete for the attention of these customers by shouldering the burden of bandwidth on behalf of their customers (just like merchants did with 1-800 phone lines). In addition, the regulators should also like the model (we call it “FreeBand”) since it is just one more choice for an end user (FreeBand does not limit existing tariff options for end users, but adds to them).
    In fact, this free byte delivery model is exactly what Netflix does today with their DVDs — they provide “free delivery of the bytes” (which are encased in the plastic DVDs) by paying the US postal service for freight charges. Their free bytes delivery model has been a huge success and it is just a matter of time before this model for the free shipment of bytes makes its way into the Internet delivery market — helping end users avoid high bandwidth charges each month. So while data caps may cause short-term pain in certain markets, it will also drive long-term innovation in others and make many forms of connectivity more affordable for end users — whether that toll-free connectivity is tied to govt services, education, job training, healthcare, or simply downloading movies. As for what content will come bundled with free bandwidth, the “invisible hand” of the market will dictate the mix of app bundles just like it does for all other forms of free delivery (books, flowers, pizzas, DVDs, etc.).

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