Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
It is well established that mobile data traffic is growing much faster than mobile data service revenues. One thing that really has helped mobile operators handle this traffic is the availability of Wi-Fi, enabling users to “self offload” onto 802.11 networks – not just at home but in public hotspots.
However, because it is wireless Ethernet technology, Wi-Fi usually operates as a separate network with no handover, or service continuity. So whilst operators can offload traffic onto Wi-Fi, they also “lose” the customer from their network.
Wi-Fi is complimentary to mobile networks. But could it become a fundamental part of the mobile network?
In the early days of Wi-Fi, operators built out coverage in airports, hotels, coffee shops, etc., and the “hotspot” was born. The intention for the operator was to build a new stream of revenue from wireless networking, which was becoming increasing viable due to wireless data cards being affordable and most importantly, Wi-Fi being unlicensed but also standardized. A couple of years on and Wi-Fi was embedded in almost every new laptop and was beginning to be common in mobile phones. A few years further on again and Wi-Fi became a de facto feature in not only personal computers, but also netbooks, tablets and smartphones. But revenues directly driven by standalone Wi-Fi services were modest and many customers found it awkward to locate hotspots, authenticate on the network and make payment for the service each time they wanted to use it.
Fast forward to now. The mobile Internet game has changed: Data traffic growth has exceeded all previous predictions, and mobile networks are feeling the strain, putting Wi-Fi back on the agenda. This time round, the primary value of the large amount of Wi-Fi deployed in the public domain is in providing a solution that enables an operator to offload data from the macro network. Glancing back at those early days again, many mobile operators felt Wi-Fi was a potentially cannibalistic technology that could eat their mobile service revenues, but fixed operators loved it as a means of adding value to fixed broadband or breaching the walls of the wireless market.
Wi-Fi’s new role of is more than a compliment to the mobile network – it is becoming an absolute necessity. Wi-Fi is backhauled over the generic Internet, usually DSL or cable broadband, and therefore has an advantage over mobile cells, which are still part of the mobile network with backhaul paid for directly by the operator. So Wi-Fi is a money saver, easing the pressure on backhaul capacity, rather than necessarily a money generator. And although most of the public Wi-Fi that has been deployed acts very much as an overlay network, separate from the mobile network, vendors are now starting to bring solutions to market that position Wi-Fi as very much part of the mobile network.
Cisco has launched a SIM-based carrier Wi-Fi solution, a means of offloading mobile data traffic described as a spectrum-aware, self-healing and self-optimizing wireless network. What makes it more than just an offload solution is the way in which it interacts with the mobile network. It is designed to give a SIM-based experience by supporting persistent IP device authentication and roaming; in effect, it seeks to offer mobile service continuity over Wi-Fi.
Other carrier Wi-Fi vendors, such as BelAir Networks, have repositioned their architectures using a multi-mode picocell approach. In BelAir’s case, it’s a strand-mounted W-CDMA/LTE/Wi-Fi product. Small cells (microcells and picocells) will feature much more prominently in cellular networks over time, suggesting that integrated Wi-Fi will be built into the DNA of future mobile networks.
Also, the femtocell market has evolved to include public spaces, offering an alternative means of offloading data traffic from the macro network. But though this offers another coverage and capacity compliment, it will not suffice on its own to relieve the traffic pressure on mobile networks. In support of this, The Small Cell Forum emphasizes (and has a working group for) what it terms “fully-fledged offload” – leveraging both femtocells and Wi-Fi in conjunction to offer what may appear more as a tapestry of small cells integrated with the mobile network.
Wi-Fi continues to evolve beyond being just a separate wireless data network to being a convenient offload network, and perhaps now on to an era of small-cell integration with 3G and 4G networks to achieve “smart” offload. It could also come back round to being part of a mobile broadband services package that actually generates revenue for operators, while reducing costs by offloading data.
Much of Wi-Fi’s evolution has been due to the fact that whilst it has never been a flawless technology, wherever it is deployed, Wi-Fi is used. And a technology as useful as that will always have a role.
Richard Webb is Directing Analyst for Microwave, Mobile Offload and Mobile Broadband Devices at Infonetics Research. He authors and co-authors market research on Wi-Fi offload equipment, small cells, femtocells, mobile broadband devices, microwave and millimeter wave equipment and mobile backhaul. He also interviews global service providers throughout the year on hot topics, including their Wi-Fi offload and hotspot strategies, residential femtocell service strategies, and IP RAN and 3GPP strategies.