Wifi Revolution

Industry analyst (but don’t call him a blogger) Dean Bubley (News - Alert) of Disruptive Analysis published his selection for mobile industry buzzword of 2009. Rather than a litany of words, he has selected just one: Offload.

 

I appreciate a man of few words, as I appreciate the importance of this word for the mobile industry. There have been many reports about the gap between the growth of mobile data traffic and mobile data revenues. Offload is about moving the traffic off the macro network, lessening the burden on the operators’ networks.

 

Mobile data revenues are growing quickly (approximately 30-50 percent a year) and are viewed, certainly by sales and financial departments, to be wildly successful. But mobile data traffic is growing at rates estimated to be 10 times faster, and the headaches are starting to pile up for the network operations groups. 

 

Suddenly, mobile operators are being forced to invest in new capacity to handle the explosion of mobile data. This is driving the need for intelligent offload strategies. 

 

Partially, it’s the operator’s own fault. In the UK, a price war has broken out for mobile data services; pricing for equipment and services have decreased by more than 50 percent in the past 12 months. 

 

While this is good news for consumers, operators are scrambling to keep up with overwhelming amount of traffic flooding their networks. Certainly in the UK, the vast majority of this traffic is being driven primarily by low-cost laptop data access. 

 

How will operators respond? 

 

Will they build more cell towers? Certainly that’s part of the operator’s long-term strategy, but cell towers are expensive. Plus, we have heard from numerous industry pundits and reports that the majority of mobile usage (presumably laptop and phone) happens in the home or office. Cell towers aren’t always effective at delivering high-speed mobile services indoors. 

 

Will operators deploy femtocells? A recent Femto Forum whitepaper concluded femtocells are valuable for increasing network capacity. Deploying a femtocell in the home will dramatically increase the performance of 3G services. Deploying mini-cell towers throughout the network will increase capacity by concentrating usage to specific locations. Initially, it sounds good, but on further consideration, that angle raises more questions. 

 

For a femtocell to function there must be a fixed broadband connection in the home or office. A femtocell uses the subscriber’s existing DSL or cable broadband connection to route traffic back to the mobile network. So here’s the paradox:

 

If the subscriber is using mobile broadband as a substitute for fixed broadband (FMS for data), then there is no IP connection to backhaul the femtocell; but if the user has fixed broadband in the home, they probably have Wi-Fi as well. 

 

A recent EU study concluded that 48 percent of ‘internet households’ in the EU15 already had a Wi-Fi access point. And ‘nearly every’ laptop today ships with Wi-Fi embedded. Ironically, even the smartphones contributing to the mobile data log-jam are Wi-Fi enabled today. 

 

If the goal is to offload the mobile data network, Wi-Fi looks like a glaringly obvious solution. 

 

Interestingly, one can already see operators moving to fill the mobile data gap with Wi-Fi. In the U.S., AT&T (News - Alert) acquired T-Mobile’s Wi-Fi hotspot network and then acquired independent hotspot provider Wayport. In the UK, there have been numerous tie-ups between mobile operators and Wi-Fi access providers like the Cloud. 

 

One of the next steps, which some operators already have in place, is an intelligent communications manager. Subscribers will not want to go through the extra steps of switching access from a 3G dongle to a Wi-Fi access point. Therefore, it’s in the best interest of the mobile operator to embed an intelligent communications manager that can ensure the subscriber is leveraging the best network connection available. 

 

This application already exists for UMA-enabled dual-mode phones. A connection manager on UMA phones intelligently searches for Wi-Fi access points, only connecting when appropriate access points are available. Therefore, the entire process is seamless for the user, and the effect is that traffic is automatically offloaded. 

 

As we look to 2009, it’s clear that mobile operators will be very interested in low-impact, cost-effective offload solutions. It looks like there is a winner in Wi-Fi. 

 

 

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