WiFi Hot Spot Service Business for the Automotive and Oil Industries: A Competitive Analysis

Louis Pau and M.H.P. Oremus

Informatica Economica, 2010, vol. 14, issue 3, 5-20

Abstract: While you refuel for gas, why not refuel for information or upload vehicle data, using a cheap wireless technology as WiFi? This paper analyzes in extensive detail the user segmentation by vehicle usage, service offering, and full business models from WiFi hot spot services delivered to and from vehicles (private, professional, public) around gas stations. Are also analyzed the parties which play a role in such services: authorization, provisioning and delivery, with all the dependencies modelled by attributed digraphs. Account is made of WiFi base station technical capabilities and costs. Five year financial models (CAPEX, OPEX), and data pertain to two possible service suppliers: multi-service oil companies, and mobile service operators (or MVNOs). Model optimization on the return-on-investment (R.O.I.) is carried out for different deployment scenarios, geographical coverage assumptions, as well as tariff structures. Comparison is also being made with public GPRS and 3G data services, as precursors to HSPA/LTE, and the effect of WiFi roaming is analyzed. Regulatory implications, including those dealing with public safety, are addressed. Analysis shows that due to manpower costs and marketing costs, suitable R.O.I. will not be achieved unless externalities are accounted for and innovative tariff structures are introduced. Open issues and further research are outlined. Further work is currently carried out with automotive electronics sector, wireless systems providers, wireless terminals platform suppliers, and vehicle manufacturers. Future relevance of this work is also discussed for the emerging electrical reloading grids for electrical vehicles.

Keywords: WiFi; Fuel Stations; Business Models; Oil Company; Mobile Operator; WiFi Services; Regulations; Professional Vehicles (search for similar items in EconPapers)
Date: 2010
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