Wow! Cablevision's Public Wi-Fi Drives 70% Growth
Tara Seals
XChange Magazine
Wednesday, March 11, 2009
http://www.xchangemag.com/hotnews/wow-cablevision-public-wi-fi-drives-70-growth.html
While the rest of the municipal wireless world has slowly faded away to be forever billed as a bad idea, Cablevision Systems forged ahead last fall with a public Wi-Fi mesh play that we at xchange and VON thought might actually work out thanks to a smart business model. And it turns out that it did. Municipal Wi-Fi contributed to more than 70 percent sequential growth in Cablevision’s net subscriber additions for the quarter, a rate higher than any other cable operator in North America.
That’s according to the Dell'Oro Group, which sees Cablevision’s success as contributing to double-digit growth in municipal wireless users in 2009, even though the service provider mesh wireless LAN market declined by almost 10 percent in the fourth quarter of 2008.
“Cablevision’s Optimum Wi-Fi service is rekindling interest in municipal WiFi applications among other large service providers, such as Comcast,” said Ben Kwan, analyst for wireless LAN research at Dell’Oro Group. “For this and other reasons, we believe municipal Wi-Fi applications will become an increasingly important growth driver for the service provider mesh market in 2009.”
Why the success where free public Wi-Fi failed before? Several reasons. For one, the network offers real broadband: symmetrical access speeds of 1.5mbps, comparable to a T1. That makes it potentially able to handle a shared, congested environment – an important consideration, considering poor service quality is one of the reasons previous public networks failed.
Also, Cablevision isn’t operating in a vacuum. Other muni wireless providers had no embedded base of customers in the cities where it built its networks – making for little brand equity.
And, Cablevision is making the service free only for its existing customers – charging everyone else for the quality service. Most of the previous failed models involved giving broadband away to the public, and it’s kind of hard to make money that way. Even plans to use the network to serve public safety and other city hall needs for a price didn’t prove enough to monetize the model.
For Cablevision’s existing customers, it acts as a retention device (the well-worn “sticky service”) and sweetens the pot for those deciding between DSL from Verizon Communications Inc. and cable modem (and that’s a throw-down not likely to subside anytime soon).
And, this strategy gives it a competitive edge when Clearwire Corp. rolls out WiMAX broadband wireless in its markets.
And finally, Cablevision also is the fortuitous recipient of a moment in time: Wi-Fi-enabled iPhones might make Optimum look tasty for consumers and professionals alike.