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“There ain’t no such thing as a free lunch,” as the saying goes. Well, judging from news reports this year, more and more people are hungry as food prices are rising. No, I’m not writing a commentary on the state of the global economy in these difficult financial times, but rather that we are seeing is the end of the era of gluttonous Internet feasting at a never-ending table.
Much has been written about the increasingly high-demand for mobile broadband, and as a result, the congestion of cellular networks. While for most people today the idea that their phone would not be connected to the Internet and allow for them to frequently check emails or post on social networks would be simply unthinkable. And the best — or worst — is yet to come. A senior official from Verizon Wireless recently said that the carrier expects a 380% increase in data usage over the next three years.
Cisco recently predicted that global mobile data traffic will increase 26 times from 2010 to 2015. The growth will be driven by increased use of smartphones and a rise in the number of notebook PCs connected to cellular networks. Notebook computers generate an order of magnitude more data traffic than smartphones, so even a small number of cellular notebooks drives a huge increase in traffic. And don’t forget the tablet market is now beginning to surge as well.
4G networks — whether HSPA+, WiMAX or LTE — aren’t going to solve the challenges related to network demand anytime in the foreseeable future. As a result, 2011 seems to be the year when mobile operators in the United States and Europe have taken concrete actions to finally utilize Wi-Fi as a central and effective tool to meet consumer network demand.
In an opinion piece I contributed to Total Telecom more than two years ago, I wrote about the eventual demise of “all you can eat” data plans: those that gave subscribers unlimited data service for a flat monthly fee. A key reason why mobile operators chose to offer unlimited plans was the unspoken assumption that subscribers will only consume data bandwidth sporadically for short periods of time so that there will be enough aggregate bandwidth within the 3G networks to supply the demand. However, due to the fact that in today’s new reality carriers are struggling to provide enough broadband in areas where mobile Internet usage is popular, this era has come to an end. Carriers have already taken significant steps to cut back unlimited data plans; users will have to begin paying by the megabyte.
Activities by mobile operators around the world confirm this, particularly in the United States. This year, we’ve seen the two leading U.S. carriers, Verizon Wireless and AT&T Mobility, switch to a strategy of tiered data plans, that is, subscribers would be required to purchase the amount of bandwidth available to them at increasing prices per size. For example, effective July 7, Verizon Wireless data plans without tethering start at $30 a month for 2 gigabytes, while 5 GB and 10 GB cost $50 and $80 respectively. Users will pay $10 for each gigabyte if they exceed their monthly limit. AT&T Mobility has a similar model, charging $25 for 2 GB of data or $15 for a 200-megabyte plan, and an extra $10 for each extra gigabyte.
Device vendors were first to jump into the Wi-Fi market for the benefit of their users and before it was even required by mobile operators. Wi-Fi on smartphones is a significant trend. It’s estimated that nearly 4 in 5 smartphone devices already contain Wi-Fi, and all future smartphone models will as well. Thus devices that are driving high data usage are being deployed with a technology ideal for alleviating the demand.
Thankfully, carriers are increasingly turning to Wi-Fi offloading as a key part in a new network strategy. While two years ago carriers still thought of Wi-Fi as a threat to their cellular networks, it is increasingly seen as crucial to meeting consumer data demand.
With Wi-Fi being used increasingly for data offloading, there are several ways that operators are able to derive significantly more. Wi-Fi can be smarter. As offloading technology develops further, operators will be able to automatically transfer users away from the cellular network whenever a Wi-Fi network that can deliver good quality of user experience is within range.
The need to expand the capabilities of existing cellular networks by integrating additional types of wireless resources into mobile operator’s core network is also addressed by initiatives within the 3GPP standards body, such as the definition of the Access Network Discovery and Selection Function (ANDSF). ANDSF was first drafted in 3GPP Release 8, meant to enable mobile devices to discover non-3GPP access networks (such as WiMAX and Wi-Fi), which can be used for data communications in addition to 3GPP access networks (such as HSPA or LTE), and to provide rules for managing such network selection. With 3GPP-standardized ANDSF solutions, mobile operators can control where, when and under what circumstances their users will use either Wi-Fi or the cellular network. Emerging ANDSF offerings will enable operators to understand users’ data usage patterns not only within the cellular network, but also on Wi-Fi networks, and fine-tune their offloading policies to achieve optimal balance between deliver costs and quality of user experience.
It’s very important that from this point forward, carriers should not see Wi-Fi as a separate entity or complementary option to their “regular” 3G or 4G cellular network. Based on the movements of mobile operators in the last several months, the future points to a “mega network” — one that incorporates several different solutions, including a 4G cellular network, a fully integrated Wi-Fi network, femtocells for enhanced indoor coverage, and perhaps more.
Wi-Fi is here to stay, but that is already a fact. How quickly and extensively operators adapt it into their network ecosystem will forecast their success in the near and distant future.
