What does the future hold for WiFi calling?

Despite the fact that large wireless carriers have been offering WiFi calling for months, the emergence of WiFi calling provider Sugar Mobile, and hinted-at-plans by Shaw Communications Inc. to integrate Wind with its WiFi network, experts say the technology is unlikely to take centre stage in the Canadian wireless market. Small companies wanting to sell WiFi calling face both the cost of roaming and the challenge of dealing with companies that may be unwilling to sell that roaming in the first place — as seen in the Sugar Mobile dispute currently in front of the CRTC — while larger companies are unlikely to undermine their voice plans with a cheaper WiFi alternative. In September, Rogers Communications Inc. and BCE Inc. both announced their wireless service would begin to support calls and texts over a WiFi network with the latest Apple Inc. iPhone. David Heger, a U.S.-based telecom analyst with Edward Jones, said in a series of phone and email interviews that right now in Canada, the “penetration level is pretty low in terms of actual usage of .” Heger said that while there is nothing stopping Rogers or Bell from offering WiFi calling as a standalone service, they’re unlikely to do so given that it would “cannibalize their existing cellular plans.” At the same time, an independent company that intends to make WiFi calling a standalone service would find it challenging to succeed in the Canadian market because it can’t function solely on WiFi hotspots, and needs to be able to roam on a wireless network where WiFi isn’t available. Bill Menezes, an analyst at Gartner Inc., explained in a series of phone and email interviews that the challenge is that “WiFi is not going to be able to handle all calls the same way the cellular network can.” He said that hotspots aren’t available everywhere, and if someone travelled between their office to their home, for instance, the handoff would be weak if they did not have a wireless plan. “Calls that are made when you’re in motion, you really need that cellular network. Additionally if you’re away from a really populated area, even in the suburban area, you’re less likely to be in range of a WiFi hotspot enough of the time to support a continuing voice call,” Menezes said. “That’s when you need a cellular network. So it’s going to be more of a complement in most areas or in many cases than a standalone.” Given those circumstances, Shaw seems like it could be especially well-positioned to take advantage of the service, since it has a WiFi network of its own that its website says is the largest in Canada. Heger said chances are that Shaw will likely have to do some roaming because Wind’s cellular network is currently only operational in a few cities. Shaw closed its $1.6 billion deal to buy Wind Mobile in March. The company hasn’t confirmed any plans yet, though it had indicated it's considering its options. When The Wire Report asked now Shaw president Jay Mehr whether the company would integrate its WiFi network with its wireless assets, he said that “if you think about the set of assets that Shaw now owns … I think there’s some really wicked, innovative ways those assets could come together.” A company that doesn’t have its own wireless network would require a mobile virtual network operator (MVNO) agreement with a facilities-based provider, like Bell or Rogers, but one question is whether those companies would be willing to sell roaming at all, given that there are no rules mandating MVNO access to wireless networks. Sugar Mobile, a Toronto-area-based company and an affiliate of Ice Wireless, an Iristel Inc. subsidiary, announced a standalone WiFi calling service in January. Priced at $19 per month, it offers unlimited Canada-wide talk and text when connected to a WiFi network. The company is currently in the middle of an ongoing dispute with Rogers, who threatened to disconnect Ice Wireless unless Sugar Mobile stopped roaming on its network. Rogers argued it had the right to do so because Sugar Mobile was selling service outside of Ice Wireless’ operating territory. Larger wireless service providers like Telus Corp. have argued that allowing a company like Sugar to have access to Rogers’ network would give Sugar an unfair advantage over facilities-based competitors. Heger said if “the CRTC rules that Sugar can’t piggyback on Ice’s roaming rates, its cost to use Rogers’ network as a standalone MVNO may be too high to survive.” While the CRTC decided last year to begin regulating the rates large wireless companies charge smaller carriers, it decided not to mandate access by MVNOs, a decision it recently upheld. Whether its decision in the Sugar Mobile case will be in line with its stance on MVNOs in general remains to be seen. It wrapped up the proceeding this spring, though it has yet to issue a decision. — With reporting by Shruti Shekar at sshekar@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

What does the future hold for WiFi calling?

News | May 20, 2016

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