Published: 7 July, 2011
It’s always fun to remember when senior industry figures’ crystal balls cracked, and in a week of carrier WiFi news, a 2008 classic from Ericsson CMO Johan Bergendahl came to mind. The executive caused uproar when he predicted that WiFi hotspots would become as “irrelevant as telephone boxes”. Three years later, in reality WiFi is becoming more central to the operators’ network plans than phone boxes ever were.
The past couple of years have seen many carriers turning to WiFi to offload excess data from their overtaxed networks – whether AT&T’s extensive use of its growing hotspot network, or T-Mobile’s dual-mode indoor service combining WiFi and 3G. Emerging standards for cellular hand-off to WLans will enable operators to place WiFi more easily at the heart of their data strategies, and the introduction of high bandwidth 4G will not diminish the interest in offload. Indeed, the ‘4G’ landscape will see cellcos grasping as much spectrum and wireless capacity as they can, pooling license exempt WiFi with 3G, LTE and WiMAX in a desperate bid to stay one step ahead of consumer data usage.
Carrier grade WLans from vendors like Ruckus and BelAir; integration of femtocells with WiFi to maximize capacity and offload; intelligent discovery and hand-off so users are always on the best connection; harnessing of many spectrum bands, even including unlicensed frequencies for LTE – all these will be tactics to transform WiFi’s role in the cellco strategy. It will change from a fallback option, using fairly simplified techniques to offload the least valuable data, to a central aspect of the spectrum/data strategy, not just adding low cost capacity but supporting cellcos’ increasingly complex charging and prioritization structures.
According to Tolaga Research, about 20% of AT&T’s mobile data traffic runs on itsWiFi network and a further 60% on home WLans, especially now that the cellco has introduced tiered data tariffs. AT&T has usedWiFi aggressively to counter problems with overload of its 3G network, as highlighted by the iPhone, and most of its smartphones now support auto-authentication at AT&T-affiliated hotspots, which number more than 23,000. In the third quarter of 2010, AT&T handled 106.9mWiFi connections on its network, exceeding the total 85.5m connections made during the entire year of 2009.
Such trends will increasingly be seen at other carriers, and many techniques are emerging to make this easier for operators and users. One will be aWiFi Alliance certification program, announced in March and due to kick off in 2012, for a set of seamless roaming and authentication standards. TheWiFi Alliance Hotspot Program will address automatic discovery and selection of networks, based on user preference, operator policy and connection speed; automatic sign-on based on SIM cards or other methods; immediate provisioning of new user accounts; and WPA2 security.
That will greatly ease hand-off and roaming and make it more convenient for customers to switch toWiFi when they are on the move, not just next to a hotspot or home access point. Some suppliers are already addressing such challenges, most recently iPass – best known for its mobile broadband access and aggregation services. The firm has created a system for cellcos called the Open Mobile Exchange (iPass OMX), which integratesWiFi with 3G and 4G via an authentication and transaction settlements layer between different networks and WLans. Carriers can then track and charge users who roam onto license exempt systems in the same way as on 3G.
Recently, another interesting new service was unveiled by hotspot tracker WeFi, which announced WeANDSF, a system that enables carriers to offload toWiFi, without having to invest in access points and gateways. WeANDSF allows them, instead, to ride for free on third party public WLans. It uses a client on the handset and policies set on the network so that cellcos can manage their customers’ access to WiFi networks as if they were their own, controlling where, when and under what circumstances their subscribers use WiFi. They can judge the best connection for a user in real time, according to various parameters. The policies can be as broad-brush as automatically ignoring secured hotspots or those requiring registration, or they can take into account quality of experience factors such as battery time, the consumer’s data plan and signal strength. The solution uses the Access Network Discovery and Selection Function server, part of the 3GPP standards family, combined with WeFi's global database of more than 80m access points.
“WiFi is just in this second renaissance,” iPass CEO Evan Kaplan said in an interview. “People are building out WiFi like crazy, and it’s become a viable network for carriers … There is a recognition that there is a role for WiFi and certain mobile services should not go through the 4G core.”
This will certainly make WiFi more usable for mobile subscribers, though carrier tracking also raises the prospect of convenient, on-the-move WiFi being charged for in the same way as cellular services – whereas it is currently usually included as a free extra to tempt mobile or broadband customers.
The trend also opens up new opportunities for WiFi hotspot operators, and aggregators like Boingo, whose networks will gain new value to operator partners as well as consumers. They will be particularly keen to gain revenue from cellcos which do not have extensive hotspot platforms of their own. Some have gone for outright acquisition, like Wayport, whose network forms the heart of AT&T’s extensive strategy to offload data while keeping broadband and mobile customers loyal with free hotspot access offers. Others, like The Cloud, now owned by BSkyB, or BT OpenZone, enter into roaming deals with cellco partners.
In general, carriers with major offload strategies estimate that about 20% of their overall data traffic rides on WiFi. In some intense areas of data usage, such as central areas of PCCW’s Hong Kong coverage zone, the figure can be as high as 80%. So it is no coincidence that carriers leading the way in offload are so often targeting urban communities in Asia. China Telecom plans to build about one million hotspots for offload over the coming two years, while this week, Taiwan’s Chunghwa Telecom discussed its aim of deploying 20,000 WiFi locations this year and another 30,000 in 2012. This is part of a $5 billion 3G expansion program.
And another ambitious offload strategy is seen in one of the world’s most broadband focused nations, Japan, where number two cellco KDDI has announced “the world’s first and largest ‘instant-on’ WiFi access and mobile data offload service.” It is working with Ruckus Wireless to build the network, which will enable it to shift traffic from its mobile infrastructure while providing seamless, high speed data services to customers in the country. Ruckus said that customers with flat rate plans can use the ‘au WiFi Spot’ service free of charge in 10,000 locations initially, to be increased to 100,000 by March 2012.
KDDI is not just harnessing WiFi but also WiMAX, a tactic that is likely to become common among those cellcos which have WiMAX investments or partners – and part of the rising willingness to merge several technologies and frequencies in an amalgamated mobile broadband platform. KDDI is the lead shareholder in UQ Communications, whose WiMAX network will be used mainly for hotspot backhaul in the ‘au’ strategy. KDDI chairman Tadashi Onodera has been outspoken in arguing that one technology will not be enough to support mobile data needs, and at a recent conference said: "LTE will not be sufficient to cope with such huge data demands.”
The use of equipment like that from Ruckus or BelAir distinguishes operators like KDDI, or BelAir customer Cablevision, from those cellcos which have focused on conventional hotspots in retail outlets or airports. These vendors, along with Cisco and others, offer longer range, higher powered WLans, specifically designed to supplement mobile networks and provide carrier class service.
Asian frontrunners like KDDI and Korea Telecom – also using a combination of 3G, LTE, WiMAX and WiFi – are planning exceptionally high performance and dense WLan systems, going well beyond the old-style hotspot or even metrozone in terms of quality and robustness. As the GigaOM blog points out, “100,000 access points will give KDDI a WiFi node for every 320 customers. AT&T has a WiFi access node for every 4063 customers. The sheer density of KDDI’s deployment assures that WiFi will become a major component of its mobile data networking strategy, rather than a mere supplementary technology.”
Also committed to a huge hotspot roll-out is Korea’s SKT, which will also turn on its LTE network in capital Seoul this week. The company projects that around 65% of total data traffic will be handled by LTE networks in 2014, with the rest travelling over 3G, WiMAX and WiFi. Already, it says, mobile data traffic has risen by 19 times between August 2010 and June 2011, and in May it raised its 2011 capex investment to KRW2.3 trillion, up 15%.