Have you noticed more and more shopping malls are offering free wifi? That appears at first sight a puzzling investment, especially in this day and age where everyone has data subscription on their smart phones. But then you start noticing that it’s quite hard to get good signal coverage from your telcos inside those malls that offer wifi. What’s going on there?
I have a guess and a bit of context would help explain things. Every telco is exploring ways to better monetise their data and, in that context, I have had several conversations with telcos across Asia Pacific on the subject of people tracking. Invariably, each of those conversations turn in one of several now-predictable directions, one of which is about tracking movement of people within shopping malls. There are variations but the basic idea is simple: We can quite easily build a preference profile for each person by analysing, say, their web browsing history. By marrying that profile with their movement data we can, for example, send someone a targeted ad if we know the person has an interest in cosmetics and she’s in her favourite mall and there’s an SK-II clearance sales going on nearby. Something like that. You can easily imagine shopping malls will gladly pay for a service like that from telcos.
The main problem with realising that scenario is data acquisition. In most cities, you can know when someone first steps into the vicinity of a shopping mall using data from the cell towers and you can get that more-or-less in real time. But there’s usually not enough access points inside malls to pinpoint where a person is with sufficient accuracy for targeted advertising use cases and this is where telcos can get stuck in a chicken-and-egg problem: they need to invest in excess infrastructure (from a coverage perspective) but the business benefit of being able to provide services like targeted advertising to their corporate customers is often hard to quantify without having the infrastructure to first build out some such services.
So this looks like a problem telcos cannot solve on their own. A partnership of some sort between telcos, shopping mall owners, and possibly a 3rd-party data analytics company (to absorb the failure risks) is really required here and that is of course exactly what is happening. Australia is leading the pack in Asia Pacific. There is a partnership between Westfield (or Scentre to be more precise), Optus and a data analytics company called Skyfii that does exactly this. All three parties are required. You need the cooperation of a telco to switch off / turn down network access in a mall, the nimbleness and focus of a shopping data analytics company to build compelling targeted advertising campaigns for mall shoppers, and the commercial appetite of a large shopping mall owner to pull off a systematic study. I expect one will start to see this kind of partnership play out across the rest of the region.