With this article we aim to explain the various models used for monetizing free WiFi zones.
Before we speak on monetizing free WiFi, it’s important to learn about the costs involved for ISPs or Quasi ISPs for hosting a free (or low cost) WiFi service. Different factors such as network architecture styles and business modeling techniques lead to varied costs from one WiFi Zone to another.
Once you understand the underlying costs; you need choose a method (or a combination of methods for monetizing free WiFi. According to MIKRO, various available models by which companies are monetizing free WiFi hotspots and the findings were as follows:
Wi-Fi as a Service
Most cases of free WiFi Zones maintained by Quasi (temporary) ISPs followed the ‘WiFi as a service’ model is used. In this model there is no extra charge to the user for accessing/using Internet. It is a part of the overall service or experience. For instance, a cafe that marks up the cost of coffee and offers free WiFi as a service to its customer. This is one of the simplest methods by which many cafes, restaurants and hotels are monetizing their free WiFi zones.
Most cases of free (or low cost) WiFi Zones maintained by licensed ISPs can be classified into (one or combination of) the following three models.
The governments of many countries have been taking measures to bridge the digital divide with public WiFi programmes. One key measure ISPs are using for monetizing free WiFi is use of public funds. Under the information for all program, the cost of setting up and running the service is borne partly or wholly by the government.
User Funded Models (UFM):
In UFMs, ISPs create two user groups – Free Plan Users and Premium Plan Users. The free plan is usually slow, and limited by time and data download. The premium plan is a paid plan for faster speeds and lesser limitations on time and downloads. The fee received from the premium plan users is used to balance the expenses incurred on the free users.
Advertiser Funded Models (AFM):
In the recent years WiFi advertising has been an promising new method for monetizing free WiFi Zones. During the sign in process an advertisement is shown to the user. The advertiser pays the ISP who in-turn enables free WiFi for the user. In some cases, ISPs would collect user data such as emails, phones numbers etc. and sell it to advertisers.