A recent study published by the European Commission has highlighted the importance of WiFi for European consumers and recommends that extra spectrum should be made available across Europe to support this rising demand. In the UK, the Super-Connected Cities Programme (SCCP) identifies wireless connectivity as a key ambition, which has led to a flurry of recent activity in wireless concessions.
This new report from Point Topic focuses on how local authorities in the UK are using WiFi in their broadband plans and their motivations. We have included several case studies on local authority deployment and examined the challenges facing smaller authorities outside the SCCP.
We also profile the main suppliers bidding for wireless concessions and look at the business model for entering this market. Free WiFi is not commercially viable for these players, and so frequently a local authority’s ambition to provide free public WiFi needs to be a benefit negotiated into a wider wireless concession that is predominantly about small cell deployment – while still a speculative market this is expected to be the real revenue driver for suppliers.
Point Topic believes that significant changes are occurring in this sector and we will continue to report on it with interest. If you have any questions or comments on the report, or if you would like to contribute your own experience of working with wireless broadband solutions, please get in touch.
In July 2013, DCMS published its Options for Wireless Connectivity as part of the Super-Connected Cities Programme. The publication states that “wide-spread, fast and high-quality wireless connectivity is a key ambition of the £150 million Super-Connected Cities Programme (SCCP)”.
In this section of the full report we review the options and the providers:
|Table 1: Recent wireless concessions awarded (24 September 2013)|
|Arqiva||London Boroughs – Camden, Wandsworth, Hounslow, Islington and Hammersmith & Fulham, Barnet, HaringeyManchester, Southampton, Colchester, EastbourneHas at least 12 concessions in total.|
|BT Wholesale||Cardiff,Expects two more contracts to be announced shortly.|
|Virgin Media Business||Leeds/BradfordBirminghamOne more contract expected to be announced shortly.|
|Telefonica O2 WiFi||Westminster|
There are already several success stories for local authorities providing public WiFi services. Newcastle already offers some free WiFi in public buildings, especially libraries, as part of its own internal connectivity contracts. Bristol City Council also has a long history in public WiFi which is profiled in detail in the case study below (in the full report).
Even so, some early WiFi schemes initiated by local authorities appear to have failed. In 2005 lampposts in Islington were used to create a 4km area of free wireless access and the scheme was expanded to cover 10,000 local authority homes in 2008. However the initiative became a victim of local authority spending cuts – it was not regarded as high enough priority to maintain. In Swindon the company due to install a free WiFi network across the town in 2009, Digital City, in which the Council had a stake, went out of business before the network was up and running.
We explore the motivations and some of the applications driving local authorities.
There are three main suppliers currently winning Tier One wireless city concessions. These are all wholesalers and therefore hold a neutral position, although BT also owns spectrum.
We briefly profile the suppliers and players in the market at the moment.
For the big suppliers at least, the key motivation for involvement in the concessions is small cell deployment. Free WiFi is commercially challenging for these players, and so frequently the local authority ambition to provide free public WiFi needs to be a benefit negotiated into a wider wireless concession including small cell deployment. Even so, this market is still speculative – no-one knows when small cell deployment will really take off and whether the networks can be monetised.
It is important to understand what the suppliers are expecting and hoping for when it comes to WiFi deployments particularly in cooperation with local authorities.
Wireless concession contracts are typically long-term – between seven and 10 years. A local authority allows its assets or street furniture such as lampposts and CCTV columns to be used by a supplier for the deployment of small cells for 3G and 4G network capacity boosting and dips in coverage. The local authority then gains a rental over a number of years in return.
We explore some options further in the full report.
The model for small cell deployment is a challenge and may not work or be attractive in smaller cities and towns. Much depends on the requirements of 3G and 4G networks, and therefore growth and costs in this sector.
The specification of concession contracts cannot be too set in stone. Leeds and Bradford found that a negotiated process works much better, as both supplier and local authority will change what they offer. Newcastle City Council recently pulled its wireless concession contract because the specification was too rigid – it is now reissuing a tender using a negotiated approach.
We draw further conclusions in the full report available to subscribers.
The full version of this report is included in Point Topic’s UK Plus service or can be purchased on its own for £245 + VAT. Click on the contents page for more details. Please contact Toby French on +44 (0)20 3301 3303 or e-mail firstname.lastname@example.org for more details.