So, now Qualcomm is planning to buy Atheros for $3.2 billion in order to garner a bigger chunk of the Wi-Fi chip market. Wow! Wi-Fi continues to be one hot technology.
I’ve tried to think of a suitable analogy for the continuing and growing interest in Wi-Fi. Is it the Rolling Stones of networking technology, staying cool, vibrant and relevant despite (and often because of) its maturity? No, even Mick Jagger is starting to show obvious signs of wear and tear that you just don’t see with Wi-Fi.
I guess the closest analogy I’ve seen for Wi-Fi is reflected in the evolution of Ethernet technology. The popularity of both in the enterprise drove high volumes, which, in turn, reduced costs. Both technologies are constantly evolving, supporting ever greater bandwidth. It’s a classic story of a successful industry standard. Now, Wi-Fi is walking the path that Ethernet has so successfully negotiated; moving from enterprise networks into carrier networks. Carrier Wi-Fi is analogous to Metro Ethernet.
Over the holidays, between the big turkey dinner and midnight champagne toasts you may have noticed the AT&T announcement regarding the success and expansion of their Wi-Fi hotzones in Times Square, Chicago and Charlotte, with new coverage established in San Francisco. No longer classified as a pilot, the AT&T announcement referred to their “major Wi-Fi initiative to deploy more hotzones in key markets.” Dan Meyer of RCR Wireless covered the details in his article: “AT&T Mobility expands Wi-Fi initiative.” This was a good news story for AT&T customers (and for BelAir Networks).
In fact, I’ve noticed that when our service provider customers make announcements relative to their Wi-Fi offerings, the only negative comments tend to come from their competitors and competitors’ customers. But, that “good news” angle, the positive PR implicit in carrier announcements of free Wi-Fi services, is just one of the reasons why both mobile carriers and cable operators are increasingly interested in carrier Wi-Fi.
For mobile carriers, Wi-Fi is obviously a way to offload data to alleviate congestion, but it also contributes to overall network profitability by delivering data at a lower cost per megabit that traditional macrocells. ABI Research estimates that carrier Wi-Fi can deliver data at 5% the cost of adding cellular capacity. Perhaps the most important driver, though, is the fact that, properly designed and architected, a carrier Wi-Fi network will deliver a consistently great user experience. The implications of that on attracting and retaining subscribers are obvious.
Of course, we’ve also seen cable operators taking advantage of their broadband HFC infrastructure to mount Wi-Fi APs throughout their coverage areas, offering free Wi-Fi as a sticky service to attract and retain home broadband subscribers. While Cablevision can certainly claim the lead in this regard, no doubt their customers are also happy to benefit from the expanded Wi-Fi availability enabled by the roaming agreement with Time Warner Cable and Comcast. [Disclaimer: Comcast Interactive Capital is an investor in BelAir Networks].
But to view carrier Wi-Fi in isolation or as a stop-gap measure, would be missing the point, I think. First, there’s no indication that Wi-Fi’s popularity has peaked and no reason to believe that it will not continue to evolve in terms of performance and bandwidth. 802.11ac, the successor to today’s 802.11n, is slated for completion in 2012 and promises to deliver speeds of more than a gigabit per second. Meanwhile, at least two industry associations, the Wi-Fi Alliance and the Wireless Broadband Alliance (WBA) are hard at work on standards to enable seamless roaming between cellular and Wi-Fi networks.
Perhaps even more important than the continued viability of Wi-Fi as a technology, is what it represents in terms of a new deployment paradigm for mobile broadband networks. Carrier Wi-Fi sits at the bleeding edge of an unmistakable trend toward small cell architectures deployed on a large-scale. This trend, driven by consumers’ seemingly unquenchable thirst for bandwidth is certainly not limited to North America.
At the GSMA Mobile Asia Congress, back in mid-November, 2010, KDDI’s president and chairman explained that while they would be migrating to LTE, which would double their network capacity, data demand in Japan was forecast to increase by 15 times over the next five years. So LTE alone, he admitted, would not be enough. A few weeks before that, European operators, including Deutsche Telekom and Telefonica, were making similar statements at the Broadband World Forum in Paris.
It is clear that LTE alone will not be sufficient to meet ongoing mobile data demand. Technical innovation has resulted in huge capacity gains, but we’re now at a point where additional bandwidth is more of a by-product of incremental spectrum. And, we all realize the finite nature of that resource. So, based on this new spectrum, LTE macrocells could deliver a 2 – 4X capacity increase. Meanwhile, ABI estimates that data capacity requirements are increasing 150% per year.
So, it’s pretty clear that carriers are going to need more than just an LTE swap out to keep delivering a great user experience. They need to, as many already realize, augment their licensed spectrum with Wi-Fi. KT, the second largest mobile carrier in South Korea, claims to be offloading 67% of their mobile data traffic onto Wi-Fi. There may also be additional unlicensed spectrum made available, at least in the U.S. and the U.K., through the release of so-called white space spectrum, freed up through the switch from analog to digital TV.
Having adopted the small cell architecture of carrier Wi-Fi, service providers are then in a much better position to fundamentally change their current mobile broadband network model. Rather than simply deploying macrocells and microcells on towers and rooftops for coverage, they can deploy small cells, or picocells, for capacity. These picocells can be targeted at the areas where the large number of data users creates congestion challenges for the operator’s macrocell or microcell network. And, of course, the picocells can support both licensed and unlicensed bands. Mobile carriers who find ways to deploy small cells and take advantage of Wi-Fi (and, potentially, other unlicensed spectrum) will ultimately be in the best position to deal with ongoing growth in mobile data demand.
So, we’ve seen Wi-Fi evolve from the technology that dare not speak its name in carrier circles to its current position as the forerunner of a new architecture for mobile broadband networks. Can’t wait to see what it’ll do next.
Bernard is the founding President and CEO of BelAir Networks, the market leader in Service Provider Wi-Fi (according to Dell’Oro Group), with customers that include AT&T, Comcast, Cablevision and Time Warner Cable.