WiFi: the next Shaw Thing?

Is it a bold move?  A far-sighted, bullet-biting decision which acknowledges that low-cost WiFi connectivity will capture most of the coming wireless growth as users plump for smartphones and  tablets (the latter increasingly relying on WiFi only?)  and corporates begin looking for machine-to-machine solutions at very low cost?

Or is the announcement  just  -  as some analysts seem to think - a consequence of Shaw not quite managing to get the spectrum-sharing deal it wanted with fellow-Canadian CSP Rogers?  Is Shaw trying to put some positive spin on a corporate defeat it's suffered while trying to get into the only growing (and potentially profitable) bit of the telecoms market?

We're not sure, but whatever the case, Shaw has announced that some of the Canadian billion dollars it was going to spend on cellular infrastructure over the next decade will now go on WiFi instead.  It says the "extremely challenging" economics of a conventional mobile network build meant it couldn't justify a plunge into what looks like an increasingly competitive (and therefore risky) market.

WiFi, on the other hand, doesn't involve expensive licensed spectrum and could be used at marginal cost to extend Shaw's core multi-channel TV business to devices like tablets - increasingly being used beyond the home. At the same time, a WiFi strategy makes use of the company's other huge asset - its fibre network which can be utilised for the backhaul.

Shaw says it will concentrate on its home territory in Western Canada and will be building out WiFi hot spots in businesses, shopping centres and all sorts of heavily trafficked areas in places like Vancouver and Calgary. It wants to build a data-focused alternative to the cellular network.

“Anywhere people gather, we want to have an access point that will extend, essentially, our broadband pipe into their tablet or WiFi-enabled device,” Shaw president, Peter Bissonnette, told Canada's Globe and Mail newspaper.

 “For the next ten years we’re going to spend over a billion dollars building this network, but it’s never going to be over. You’re never finished building that network. And the margins are starting to deplete.”

It's not an original approach, of course. In the UK BT has been talking up its use of WiFi (Openzone) for years now and claims over 2.8 million hotspots are already in use.  BT famously doesn't have a cellular arm.  (See our panel programme 'The future of mobile is fixed' below.

And on the positive side, some commentators see the Shaw move as the first of many.  Far from WiFi being a sort of consolation prize for network operators who can't quite make it into the grown-up cellular league, they see a move to WiFi as a natural for companies keen to intercept the data access market.

According to Francis McInerney of North River Ventures in New York City, the Shaw decision reflects the fact that WiFi is "The Existential Threat to Cellular."

"Marginal cost-based WiFi will fast supplant average cost-based cellular and the burdensome, expensive architecture that goes with it. Already 85 per cent  of iPad users are WiFi exclusive [and] the whole structure of Apple's offering is based on a common WiFi platform with cellular at the margins.

"The future is core-free, DAS on steroids. A whole new frontier of wireless innovation just opened," he says.