Will Dubai's retail and hospitality boom mean free WiFi for all?
Free WiFi is the most preferred amenity for choosing hotels, a recent survey suggests, with more than half the guests saying they’d like to see free WiFi as a standard amenity across all hotels.
Dubai’s hotels – and along with them malls and other retail outlets, schools and even hospitals – are obliging with just that.
The growing retail, hospitality, and healthcare sectors in the UAE are expected to offer significant growth opportunities for WiFi services in the years to come, according to a new report commissioned by UAE telco Etisalat and prepared by IDC.
Enterprises that often provide free or paid-for Internet or WiFi to their end-customers are known as public internet access providers (PIAPs) in the UAE and they come under Telecom Regulatory Authority's (TRA) radar.
These enterprises are required to adhere to the TRA’s directives regarding the misuse of public Internet or WiFi.
The TRA mandates that PIAPs must migrate to a secure managed Internet solution offered by one of the two licensed operators and implement added features such as user authentication and security.
Failure to comply with this directive can lead to a discontinuation of the services in question.
Where WiFi?
According to the report, the UAE government’s economic diversification measures are paving the way for new investments in a variety of greenfield infrastructure projects.
These projects are, in turn, expected to drive the growth of the retail and hospitality sectors in the UAE.
Some of the most notable projects are identified below:
• The 'Mall of the World' includes 8 million square feet of mall space and 100 hotels.
• The 'Dubai Meydan One' project, which spreads across 47 million square feet of space, includes a large mall, 100 hotels, 300 restaurants, cafes, and kiosks.
• 'Deira Islands' includes 1,400 retail units, hotels, restaurants, and beach resorts. Another project 'Bluewaters Island' is being developed along similar lines and will include dedicated retail space.
• 'Dubai Creek Harbor' includes 8 million square feet of retail space and 22 hotels.
• 'Al Mamzar Beachfront' includes 2.7 million square feet of retail space and 300 hotels.
Ongoing expansion projects at Mall of the Emirates, Dragon Mart, and Ibn Battuta Mall are also expected to add significant floor space in the years to come.
Similar growth trends are expected in the hospitality industry, with hotel room capacity expected to grow at a compound annual growth rate (CAGR) of 5.3 per cent during 2012-2016 to reach 125,383 rooms by the end of that period (as per Alpen Capital). These developments are sure to add significant retail floor space and hotel room capacity by the time Dubai Expo 2020 commences.
In the education sector, Dubai alone is planning to add 80 new private schools, with Abu Dhabi expected to add equal numbers by 2020.
In the healthcare sector, the UAE government is investing heavily in the development of new hospitals and medical centres. For example, Dubai is currently building three new major hospitals, 40 healthcare centres, and six specialised centres. Similar public and private investment in other emirates is expected to significantly add to the country's hospital capacity.
In the report, IDC and Etisalat examine the growth of managed WiFi services in the UAE by highlighting the conditions that are shaping the market's demand.
It discusses the key challenges that businesses face while using WiFi, explains how managed WiFi services can help address such issues, and presents IDC's opinion of the 'Business Managed WiFi' service offered by Etisalat.
Why WiFi?
ICT investments by businesses in the UAE are being stimulated by the economic diversification measures that have been undertaken by the government in recent times.
Ongoing announcements relating to new megaprojects, smart cities, and infrastructure projects for global events such as Dubai Expo 2020 are the primary drivers for the fresh round of ICT investments we are seeing, with mobility, cloud computing, big data/analytics, and social media technologies proving particularly popular.
With reference to mobility, wireless local area network (WLAN) technology is emerging as one of the most attractive means of wireless broadband connectivity for customers and employees alike. This trend is becoming more significant by the day, particularly for retail shops, hotels, restaurants, healthcare institutions, offices, public places, and schools and with the growing popularity of enterprise mobility concepts.
Interestingly, small and medium businesses (SMBs) in the UAE have also begun viewing WLAN as a way of creating competitive differentiation for themselves.
Opportunities
The consumerisation of IT and the growing popularity of enterprise mobility is driving the popularity of concepts such as bring your own device (BYOD) and choose your own device (CYOD) among UAE enterprises.
A recent survey of IT decision-makers conducted by IDC found that 48 per cent of UAE enterprises have plans in place to issue corporate smart devices and 56 per cent are planning to introduce formal BYOD policies in the next three years.
Such trends inevitably create a need for highly resilient and secure WiFi connectivity; indeed, wireless connectivity is likely to emerge as the primary mode of access to corporate resources such as application stores and cloud computing services.
Challenges
Mission-critical applications are now more easily available on smartphones and tablets. As such, enterprises must embrace this reality with an overarching enterprise mobility strategy and back it up with the necessary network investments, particularly in areas such as enterprise-grade WiFi networks.
It would be a misconception to assume that such investments are only necessary in mainstream sectors, as recent trends suggest growing network investments among non-traditional businesses too.
Free WiFi is the most preferred amenity for choosing hotels, a recent survey undertaken by Hotels.com globally suggests that. The research further cites that 53 per cent of guests would like to see free WiFi as a standard amenity across all hotels.
Other sectors such as retail, restaurants, healthcare, and education have also started to realize the potential business value that WiFi could offer to their customers.
Enterprises in these verticals often have distributed branches; however, they tend to have one centrally located IT team for managing the entire network. The IT departments of these companies are often not fully equipped to manage security or ensure user data privacy, and they often lack the facilities required to upscale.
In scenarios such as this, WiFi investments may not only prove to be capital intensive, but they may also not provide the network control, transparency, security, and scalability that is required to address continually evolving business challenges.
Is ‘Managed WiFi’ the answer?
Managed WiFi services have the potential to address these concerns by offering improved performance, resiliency, and scalability; centralized management; remote access point (AP) provisioning; and automated firmware upgrades.
The benefits also include comprehensive security and data privacy features, analysis of contextual information and policy enforcement, and end-to-end network monitoring and management across multiple locations. Most importantly, the managed services model helps enterprises to convert their Capex into Opex.
It also provides access to a skilled workforce, helps in lowering operational costs, and ensures high uptime with service-level agreements (SLAs) in place. Most importantly, it helps PIAPs to comply with the TRA's directives on the prevention of misuse of public Internet.
Another compelling advantage is the opportunity for connectivity/location analytics. With analytics, enterprises can gain intelligence and actionable insights into user behavior and location within the WiFi coverage area. Such insights can be extremely helpful for the business decision-making process.
Due to these advantages, managed WiFi has witnessed increased adoption globally. Based on the analysis, the worldwide cloud-based managed WiFi services and infrastructure market alone is expected to grow at a CAGR of 39.7 per cent over the 2014-18 period to reach a value of $2,487 million in 2018.
By way of comparison, enterprise WLAN revenues will rise at a CAGR of 10.5 per cent over the same period to total $7,470 million in 2018.
Managed WiFi is often confused with the term 'Public WiFi' as both of them share some common characteristics such as the network management aspect. While managed WiFi encompasses enterprise networks, Public WiFi, which is also referred to as 'public WiFi hotspots', offer paid or free WiFi access in public places.
Tole of telcos in managed WiFi value chain
The global managed WiFi landscape is dominated by a variety of value chain players such as equipment vendors, systems integrators, Internet service providers (ISPs), and telecom operators.
Among these, telcos are the best equipped to address the market demand for managed WiFi services as a result of their ownership and control of the connectivity network, their existing vendor relationships, their knowledge of enterprise requirements through long-established relationships, their skilled manpower and professional service providers, their ability to comply with the regulatory requirements, and their ability to integrate billing.
Etisalat and its Managed WiFi Services
Launched in August 2015, Etisalat's 'Business Managed WiFi' is a new addition to the telco's managed services portfolio. Its solution includes hardware leasing options (under an Opex pricing model), where Etisalat supplies WLAN devices, offers installation and 24x7 network monitoring and management from its customer network operations centre (CNOC), and provides support and maintenance for the devices.
This scalable solution is primarily targeted at verticals such as hospitality, retail, banking, healthcare, and government, as well as at the burgeoning SMB segment. It is offered in bundles of specially designed add-ons that meet the specific needs of different verticals and comes with the promise that it will reduce upfront costs.
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