Australia's Wi-Fi future

With hype around 4G dominating the headlines, it's easy to think Wi-Fi is a stagnant line of technology - but this is far from the case.

Wi-Fi is perhaps Australia’s most underappreciated technology. It’s installed in every device. It declutters our homes and offices from cables. And it ultimately makes it much easier to access the internet.

Yet when it comes to innovation in the mobile internet, all we really want to know about is what’s going on with 3G and 4G technology.

We’re so blissfully unaware of Wi-Fi innovation, that there are some drastic shifts happening in the Wi-Fi sector, yet its debatable as to whether everyone in Australia knows about it.

The next generation of Wi-Fi routers are already here

As it stands, we are only a year away from having a new form of Wi-Fi router system fully approved by US-based regulator, the Institute of Electronics and Electrical Engineers (IEEE).

It's already gone through its first two draft approvals - and therefore there are already some retail-based 802.11AC routers available for purchase. There’s even hints that Apple’s already started integrating the new format in its devices.

But this new technology won’t be available for business use or integrated into all new devices until it is fully certified by the IEEE next year.

Perhaps the first question that springs to mind when it comes to a new internet technology is released is speed... and the new 802.11AC Wi-Fi routers certainly aren't lacking in it.

According to Aruba’s APAC Director of Systems Engineering Mark Verbloot the earliest incarnations of the 802.11AC router will deliver speeds starting 433mbps for an individual user on a Wi-Fi network. A significant improvement from the current standard - 802.11N - which offers a base speed of 150mbps.

From there, Verbloot says that as the technology is rolled out improved 802.11AC routers will eventually break the 3Gb per second barrier. 

The truth about speeds 

Yet there are a couple of points to remember with Wi-Fi speeds. Firstly, they shrink depending on how many people are using a particular service. More people using one Wi-Fi router means slower speeds per person.

Secondly, the data transfer speeds increase depending on how many antennas you have on your router. 802.11AC speeds may start at 433mbps but with three antennas on a router, the speed jumps to around 1.7Gb per second. 

And finally, and perhaps crucially, Wi-Fi routers don’t enhance speed as much as they offer a wireless pipeline for an existing internet connection. For instance, if you have a 12mbps ADSL2 connection to a 802.11AC router, the router isn’t going to make your wireless internet connection any faster than 12mbps. Using a 11AC router in the home will improve your overall connection speed, making it ideal for streaming or online gaming. But sadly, a new router won’t make your download speed faster. 

Regardless of its perks, Verbloot says that if jump to the last Wi-Fi standard was any indication, it will take a while to fully upgrade to 11AC router technology.

“For the majority, they won’t really feel that there will be a compelling reason to upgrade right away,” he says.

Verbloot does point out  that there is great potential for this technology in the enterprise space, and as a result, the sector will lead the charge into this next generation of Wi-Fi. He adds that this technology is particularly useful for anyone who operates a data centre where the transfer of data between servers and users is typically clocked between 1GB per second and 10GB per second. 

Telcos inevitable leap into Wi-Fi

You will never ever hear it from Australia’s major operators, but Wi-Fi is actually a crucial part of their future. 

In fact, in order to attain a 4G network that meets the International Telecommunication Union’s Radiocommunication Sector 2007 definition of 4G, the telcos will need to create a system that seamlessly and automatically offloads users onto a Wi-Fi network where possible.

At the moment, Optus and Telstra are wrapped up in their own respective 4G network rollouts, but analysts tip that they will eventually turn to invest in Wi-Fi.

BuddeCom founder and analyst, Paul Budde points to Indonesia as an example. One of their major telcos, Indosat recently rolled out its own “Super Wi-Fi” network to offer its customers fast, easy internet access at over 30,000 points around the country. 

But this customer perk has a dual purpose. Eventually it will be able to serve as a offloading mechanism when it’s 3G and 4G networks become clogged with mobile internet traffic. In other words, it will help keep the company’s mobile internet up to speed when an overload of data traffic looks to slow it down. 

The plan does have a couple of deficiencies. The first being that granting access to Wi-Fi eats away at telcos 3G and 4G revenue models. Also it would be difficult and expensive for the telcos to rollout their own Wi-Fi network, and estimating the growth and demand for Wi-Fi use would be sketchy at best. 

Ovum analyst Nicole McCormick adds that problems also lie in the telcos integrating their existing networks with current Wi-Fi services as there no set technological standard for Wi-Fi hotspots scattered around out cities.

Which explains the typical problems at Wi-Fi hotspots: weak signals, slow internet and having to continually hurdle over authentication screens every time you log onto hotspot. 

McCormick says that the telcos have their work cut out for them when it comes to Wi-Fi. 

“In Australia, the Wi-Fi infrastructure market is extremely fragmented,” she says.

But it’s a move that both Budde and Ovum’s McCormick believe will be crucial for Australia mobile internet future.

“Telcos will need to invest in Wi-Fi hotspots should no third party leasing option emerge. We expect it will be telcos that lead the infrastructure charge.”  

However, given the current state of our networks, it won’t happen for a while. 

“In Australia, there is no urgent need to offload data to Wi-Fi. LTE is bringing capacity improvements and with more LTE spectrum coming, we don’t see Wi-Fi being used for offloading for at least a couple of years,” McCormick says. 

An emerging Wi-Fi revenue stream

Many free Wi-Fi hotspot operators see their work in maintaining their network as a cost in the name of appeasing customers. However, it may soon become an opportunity. 

Media company GoConnect is trying to push this point with a product that turns a free Wi-Fi service into an advertising platform.

The concept is simple. Every time a user logs on to a GoConnect service they are presented with a screen of ads before they can use the service. The ads subsidies the Wi-Fi costs and can even generate a revenue for the hotspot owner.

The scheme has already rolled out at Melbourne’s major train hub Flinders Street Station. The network is operated by Metro - Melbourne’s major train provider - but the ad service is provided by GoConnect.

“Flinders Street is going well with user numbers expanding daily,” says GoConnect executive chairman Richard Li.

In terms of results for advertisers, Li says that the average click through rates were about 200 to 500 times of the average online ad. He added that the service is set to be rolled out to Melbourne’s other major train stations as well.

It's good news for other groups who are looking into free Wi-Fi models that generate a revenue. And it’s not just business groups either; local governments are to monetise their free Wi-Fi plans. For instance, Waverley City Council in Sydney recently announced it would ship out advertising funded Wi-Fi around the Bondi area to help cover the cost of the network. 

The calm before the Wi-Fi storm

With hype around 3G and 4G dominating the headlines, it's easy fall into the opinion that Wi-Fi is a stagnant line of technology - but this is far from the case.

There are still problems that need to be worked out, like that lingering frustration around forcing users to go through an admin wall every time they want to use a Wi-Fi network. Yet as the technology progresses, there is no doubt that all of these minor technical knots will be ironed out. 

Wi-Fi is destined for a resurgence into the limelight in Australia’s networking scene, but the question remains... will anyone act on these predictions or will they wait until the Wi-Fi storm is at their doorsteps.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles