Why did the giant fancy the "cake" of WiFi?

China has recently scrambled to upgrade its commercial WiFi entry. Tencent, the public comment 300 million yuan investment WiFi service provider Michael, Alibaba 3 billion Guizhou free WiFi, 360 and three major telecom operators and industrial chain enterprises nationwide built nearly billion free WiFi hotspot. Baidu tens of millions of strategic investment wireless communication developers Shanghai Han Feng ...

Because of the lack of mature business model, WiFi has been seen in the capital market, the industry chain of enterprises on WiFi participation is not high, why a sudden heating up overnight? "Communications daily" (Micro-letter: maoqiying2008) through the visit to WiFi operators and the industry chain to exchange knowledge, bat giants in addition to compete for mobile internet portals, the promotion of their application store is the purpose behind.

The following is dry goods information sharing:

Why did the giant fancy the "cake" of WiFi?

Why do giants stare at free WiFi? Since the media person Shep said, "WiFi is the hardware, operating system, search, distribution, lbs after another large mobile internet portal, is connected to mobile devices and mobile Internet pass." ”

1, encirclements app user.

Public data show that Baidu mobile phone assistant to provide free WiFi penetration of the entire platform 700,000 app download. As of the second quarter of 2014, Baidu applied market (including Baidu mobile phone assistant, 91 assistants, Android Market) The overall user size has reached 600 million people.

360 Free WiFi business director Ma Yi to the "communications daily", 360 launched an independent app,3 month has reached 16 million users.

Ma Yi said, "Unlike other Internet free WiFi, 360 free WiFi is a stand-alone app, with basic operators and cooperation is deep cooperation, not limited to any one operator." In addition, the internal application and 360WiFi free close integration. ”

2, push their own products.

Insiders said that in September this year, Zhou 360 free WiFi projects to the highest level: 360 free WiFi products in the year's goal is to achieve the industry second, the first three months before next year will be the number one. 360 of the mobile phone assistants and 360 mobile phone guards have been adjusted to the "free WiFi" content. To better promote free WiFi, Zhou personally asked about the product and the content.

Meanwhile, Tencent set up a secure WiFi alliance. Tencent has announced the establishment of a secure WiFi alliance with 10 commercial WiFi providers, including the 10000+ Ultra, 15000+ Café and 35000+ restaurant. Among them, the mobile phone QQ5.1 added "QQ free WiFi" function, provided 5 million free hot spots. Then, micro-mail push phone book, known as WiFi status can be free calls.

Industry personage Analysis thinks, 360, Tencent to free WiFi so the division moves the public, the promotion ego product ingredient is bigger than the reality.

3, to enter the "municipal engineering" and other fields.

Tencent, the public comments on this 300 million yuan to complete the C-round of the financing. Mai di commercial wifi services covering the Beijing capital, Shanghai Hongqiao, Pudong International, including more than 20 airports nationwide, as well as more than 500 well-known domestic and foreign famous commercial chain brands, including Starbucks, Burger King, Qiao Jiangnan and so on.

According to the WiFi operators, the airport, subway and urban public transport and other municipal projects, involving the construction of national Wisdom City, these WiFi operators to provide car advertising, in addition to the line of deep tillage, the special circle is the bat can not get through, so bat chose to work with the WiFi operator, This is the ideal route.

Can wifi make the Giants get what they want?

The heat of WiFi China's capital markets has struggled to disguise the global lack of mature business models, and BAT's ideas for free WiFi are mixed, and I'm afraid promises are hard to cash.

1, WiFi technology defects, internet companies can not make up

Mobile Business Support System Department of Planning Department of the construction everywhere Changning Yu said, "WiFi its own existing technical defects gradually exposed, non-telecom-grade equipment quality and lack of professional operational capacity, but also increased the difficulty of solving problems." ”

This, e-road WiFi related people to the media, the company in Beijing to deploy free WiFi, the early use of Huawei's network facilities, due to the standard is not uniform, can not continue, now switch to the company's WiFi facilities, due to the system upgrades, delayed for several years.

E Road CMO Liu Yan, said in the communication Life newspaper, "Public transport WiFi has its particularity, for example, the equipment should be placed in the mobile, bumpy and high temperature environment, so the test period may be longer." ”

"Internet companies have a big difference between technology and telecoms standards, especially the security implications of public WiFi, and Bat is unwilling to spend a lot of energy on it," said one operator. "Baidu CEO Robin Li has issued in the two sessions on the cancellation of public places WiFi personal identity authentication proposal, the basic operators are opposed."

2, the fund invests huge, the recovery period is long, the internet company has tasted

Liu Yan to my account, the deployment of free public transport WiFi per car cost of 3000-4000 yuan, which does not include flow costs, personnel costs, operating costs, maintenance costs.

"According to each hot deployment cost of about 4000 yuan calculation, telecom operators to build WiFi investment more than 20 billion yuan." WiFi users average monthly ARPU less than 15 yuan, not to mention the rate of return, not even the cost of network advantages, "a carrier responsible for the WLAN project, said.

Public news shows that this July, Baidu mobile phone assistant and China Telecom push free WiFi service (free to open 340,000 WiFi hotspots). Insiders to the author that, because the Baidu application store has achieved the expected target, and China Telecom to cooperate with the free WiFi function temporarily stopped, Baidu may have made a difficult decision.

3, the profit model stays in "storytelling" stage, it is difficult to form group strategy

There are two main types of profit for WiFi operators:

First, car ads. Including SMD ads, text chain ads, banner banner ads, Liu Yan said to the newsletter, "Free WiFi advertising is the lowest profit model, flow guidance, application distribution, game transport and O2O and large data analysis will be the mainstream of the future." ”

Second, app apps make money. Users download apps, can browse information, play mobile games, socialize. E-Road WiFi started in 2013 and has been developed by app user 3 million. Bus online vice President Shambo to the author that the bus online hopes to pass "Mike" (APP, is a completely free to support a lot of people at the same time voice or video applications) will free Wi-Fi and other business integration, through the game and so on.

WiFi operators told the newsletter, app WiFi has just begun, only a small amount of information such as push, the application is still in the planning stage, the number of users, talk about making money is premature. BAT's goal is not to make money, but if you blindly throw money inside, and can not achieve large-scale operation, bat is difficult to move it to the group strategy, at most, is a few small departments.

4. What is the likelihood of continuous investment?

Wi-Fi is still the preferred way for users to access the mobile Internet, which accounts for more than half or even higher, according to the alliance's report, with 60% WiFi access in June alone.

However, Beijing, Shanghai, Guangzhou and Hangzhou and other cities have already "test water" access to free Wi-Fi in public places, but caught in difficult to login, poor signal, slow speed of the dilemma. A WiFi operator complained to the author, "The current user spit The biggest problem is not experience, let users download app, and then constantly verify, audit and so on." ”

According to media reports, "the basic operators are currently only technical support for public transport WiFi, some operators in charge of the public transport WiFi project engineers have left or redeployed." "The success of the bus Wi-Fi depends on the perfect 4G network of operators, and the current 4G network is not able to achieve large-scale public-transport WiFi," said Wang Jinhu, the CEO.

App as a mobile internet portal, can increase user stickiness. BAT hopes to gain access to app users quickly with free WiFi, to promote their apps and curve to get a mobile internet ticket. However, once the free wifi is found to be huge, the cost recovery period is far away, the publicity effect and the expected difference, may be halfway.