Mobile Data Offload - Can Wi-Fi Deliver

Mobile Data Offload Can Wi-Fi Deliver? Anjan Ghosal, CEO

January 2010

EXECUTIVE SUMMARY Mobile Network Operators have long recognized Wi-Fi as a potential means of adding wireless capacity by leveraging low-cost access points and free spectrum. Wi-Fi has however been elusive as a widespread 3G offload mechanism. An early implementation, Unlicensed Mobile Access (UMA) – a highly touted voice offload technology, has failed to deliver on its initial promise. One of its more prominent backers – T-Mobile in the US – quietly pulled the plug on its “@Home” service. While a number of reasons can be attributed to the lack of commercial success, the primary reason is that there is no compelling business case for shifting voice traffic to a lower cost access network. UMA had merit conceptually, but voice is not where pain points exist. However, the mobility space is evolving in real-time. The exponential growth of data consumption, by today’s army of smart phone and intelligent wireless device users, has become a game changer forcing carriers re-look at Wi-Fi as an alternative access mechanism. Are things going to be different this time around? Or will Wi-Fi access again be relegated as a niche play without mass appeal? This papers looks into some of these issues.

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Mobile Data Offload – Can Wi-Fi Deliver? It is the data, stupid! When it comes to telecommunication services – Wi-Fi is disruptive. It lacks basic features that we have come to expect of traditional 3G network including network security, guaranteed quality of service and ubiquitous coverage. However, Wi-Fi does have a couple of strong attributes. It is widely available in devices. It requires no expensive network planning and leverages unlicensed spectrum to add capacity.

When it comes to telecommunication services – Wi-Fi is disruptive. It lacks basic features that we have come to expect of traditional 3G network including ubiquitous coverage

Figure 1: Traffic and Revenue increase Adoption of disruptive technologies requires an extremely strong business driver (bordering on extreme pain!). Such a driver is present today. The rapid growth of data consumption is real and has been observed by many operators. Here are numerous facts to substantiate this. For example, •

Vodafone has seen its data traffic grow from a trickle to a where it almost

•

AT&T has seen a data growth of over 5000% over the past 12 quarters (John

exceeds its voice network traffic (Vodafone 2008) Donavan at ATT) •

Current forecasts based on a study of MNO data expects traffic to grow by 300X to 500X over the next 10 years (Cisco 2008)

•

Independent forecasts show “six to fourteen times more data is being used on mobile broadband networks today” than this time last year. (3G America’s study)

The challenge for operators is that there has been a decoupling of revenue per user from data traffic generated per user. Clearly this is a disruptive problem which may well require a disruptive solution.

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Many ways to skin the cat Currently a number of approaches are under consideration to address the carrier’s data problem. Traditional options, like scaling network capacity with additional network equipment, are available. Optimizing the carrier’s data pipe to increase overall throughput is being explored. Other innovative solutions like data throttling using policy control functions – used to ‘punish’ the most severe data users are also being discussed. Of course, LTE is also being proposed as the ‘cure all’ for data congested networks. However all of these proposed solutions have their limitations. Scaling network capacity using traditional means is an expensive value proposition – at a time when data revenue has flattened out compared to data usage. Data optimization has theoretical limits as to how much data can be compressed. Data throttling is likely to alienate a section of subscribers that are singled out. Finally 3G was supposed to solve the carriers’ data flow problems. Ironically, it has only made matters worse as the data usage has been growing exponentially, and the networks have not been able to cope with it. Considering all the above, a Wi-Fi based data offload has some key advantages. Studies have shown that expanding networks using Wi-Fi is significantly less expensive compared to a network build out. Even the FemtoForum – a strong proponent of using licensed spectrum to alleviate the data problem – has in a recent study stated that “Wi-Fi is a strong driver in the data market today.” Given the urgency with which data capacity is required, Wi-Fi offers “time-to-capacity” advantages that can’t be matched by building out cellular capacity. And the availability of spectrum is often the limiting factor for mobile operators, Wi-Fi allows data traffic to be shifted off of expensive, licensed cellular bands to exploit the 2.4GHZ and 5.xGHz unlicensed bands. So it is very likely that carriers will have to use all tools that are available in their arsenal and bring them to bear on this issue – and Wi-Fi will be a core part of this strategy.

Lessons from History Over the past 10 years, there has been a significant amount of effort around developing offload solutions using Wi-Fi technology. The most prominent among them being Unlicensed Mobile Access (UMA) – a technology specifically designed for integrating Wi-Fi with the carrier’s core network – primarily to deliver voice traffic. In spite of the significant amount of effort put into standardizing this technology, and a number of reincarnations of this technology, it has been a commercial failure. Most detractors are quick to point to this as evidence that Wi-Fi offload is a failed strategy. T-Mobile USA, one of its largest backers has quietly pulled the plug on its “@Home” service.

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However, that would be a rush to judgment. To understand why things are different now it is important to review the reasons for its lack of success and why those factors may be different this time around.

Figure 2 : UMA Evolution

1.

Lack of a ‘disruptive’ driver: The key driver for UMA was improved voice coverage inside the home – hardly a strong enough business case. Data is a much bigger issue for the carriers today and provides a real incentive for them to adopt Wi-Fi.

2.

User experience: Wi-Fi a natural fit for data offload. Today millions of subscribers are already using Wi-Fi as their primary source for data/internet access. Wi-Fi offload preserves this experience.

3.

Device support: One of the major impediments for mass adoption of UMA has been the lack of handset support. Requiring device manufacturers to embed client software in their handsets has been an uphill battle for many promising start ups

4.

Carrier approach to Wi-Fi: Until about a year ago, carriers viewed Wi-Fi as a threat to their networks. That has changed and carriers today have embraced Wi-Fi as a part of their network – making them more open to adopting Wi-Fi based approaches.

5.

Lack of marketing focus: Discussions with a number of carriers have revealed that due to internal ambivalence about Wi-Fi – the marketing efforts to promote this solution has been limited – leading to further lack of interest from the customers.

While some of these issues do not exist in the case of data offload, most of the others are addressable if we are willing to learn from history.

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Shut up and listen to the customer! Our industry is notorious for delivering solutions to problems that don’t exist! While some of it may be warranted (let us call it ‘being ahead of the times’) others simply are due to lack of understanding regarding the customer’s true requirements. While some vendors continue to re-spin their old technology to force fit the ‘latest buzz’, it is worthwhile to look at data offload from the operator’s perspective. Based on our conversations with a number of carriers, we can divide the industry into three distinct offload categories based on factors such as their specific network consideration and customer profile: 1.

Network bypass

2.

Managed network bypass

3.

Integrated data offload

Network Bypass Network bypass is the process of taking mobile subscribers in Wi-Fi range and transparently moving their data onto the Wi-Fi network – in the process completely bypassing the core network for data access (voice continues to be delivered via the core network). This can be achieved by putting a small application on the subscriber’s device that detects when they are in a Wi-Fi area and automatically moves all data access to that network. It does not require that any additional network equipment be installed.

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2G/3G RAN

Corporate VPN, Blackberry, SAP, Oracle

GGSN GGSN Ringtones, Games, MediaNet, MobiTV, Mobile Email, Answer Tones

www Internet access Wi-Fi Access

Figure 3 : Network Bypass

However it has two major drawbacks. First, the carrier loses visibility and control of their subscriber while they are in the Wi-Fi area. This will prevent the carrier from billing for usage (if they have a metered service like in some countries) or providing any other features that they generally provide to their customers on their 3G networks. Second, since there is no connectivity between the core network and the device, the carrier is unable to deliver any 3G content leading to potential loss of

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revenue. In spite of these drawbacks, some carriers have opted to deploy such a solution as an immediate work around to their network overload problem – especially since they are reasonably easy to deploy. But that is just a stop gap and in the longer term they will have to enhance their solution to move to one of the next two offerings. Managed Network Bypass The next levels of carriers are those that are uncomfortable with this level of desegregation of the two networks and the resulting loss of subscriber control. That could be for multiple reasons. Some carriers provide metered network access which requires subscriber control. Others deliver services, like parental control/filtering, that they are not able to provide in a completely desegregated network. Others insist on secure access for their subscribers when they are accessing internet services via Wi-Fi. And finally others simply want to be aware of subscribers browsing habits for targeted marketing or security reasons. This solution can be delivered without having to fully integrate the two networks. However, while this solution does allow the carrier to ‘manage’ their subscribers, it still prevents them from delivering any carrier subscribed content is in the Wi-Fi zone (a rather irritating user experience for some!). Nevertheless, it does solve the issue of data overload and may work well for some carriers that do not have any significant walled garden content to deliver.

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Corporate VPN, Blackberry, SAP, Oracle

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GGSN Ringtones, Games, MediaNet, MobiTV, Mobile Email, Answer Tones

2G/3G RAN

SECURE TUNNEL

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Figure 4 : Managed Network Bypass

Integrated Data Offload The final set of carriers insist on full integration of their core and Wi-Fi networks to provide a completely seamless experience to their subscribers when they move between the two networks. They want to not only manage the customer but also want to be able to deliver all carrier subscribed content to the subscriber while they are in the Wi-Fi network. These carriers tend to have a significant amount of content available to them via their 3G network (e.g. IP. TV. etc.). This is only possible when a ‘bridge’ is established between the two networks through which data flow can be established between the two networks.

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Corporate VPN, Blackberry, SAP, Oracle

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GGSN Ringtones, Games, MediaNet, MobiTV, Mobile Email, Answer Tones

2G/3G RAN

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Figure 5 : Integrated Network Offload As can be seen from these three cases, the solution that has to be applied will to a large extent depend on the carrier, their service profile as well as their customer’s usage habits.

Winning the battle …

The battle to get carriers to take a second look at Wi-Fi as an access mechanism has been won

The first salvo in the data bypass battle has already been fired. With the release of the iPhone 3.0 version software – AT&T hotspots automatically detect their subscribers and move their data traffic to Wi-Fi. The whole process is completely transparent to the subscriber and they do not notice any difference (unless of course they try to access any AT&T delivered services which is not available any more!). Initial results are very promising. AT&T has seen a dramatic increase in the number of connections from their hotspots from 19.7m in 2008, growing over 400% to 86.2m connections in 2009. Another strong signal from the carriers has been their recent M&A and partnership activities. AT&T – with the purchase of Wayport and Verizon with a partnership with Boingo have sent a clear message to the market that henceforth Wi-Fi will form an integral part of their network growth strategy. Of note is that this is not simply a US phenomenon. In the UK, O2 has signed roaming agreements with both The Cloud and BT, giving their iPhone subscribers the ability to roam onto 3rd-party hot spots. The battle to get carriers to take a second look at Wi-Fi as an access mechanism has been won.

.. but how about the War ? Wi-Fi has a second wind when it comes to an alternative carrier network access. This time around it also comes with a much stronger value proposition for the carrier as well as significant support from the carriers themselves. However, further effort is required to win the war.

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The vendors must invest the time and effort to understand a carrier’s specific drivers and motivations for data offload and provide a solution that fits their needs instead of the other way. In this case one size may not fit all! The 3GPP standard of I-WLAN offers a compelling technology solution for integrating Wi-Fi networks with cellular networks. I-WLAN defines the

The vendors must invest the time and effort to understand a carrier’s specific drivers and motivations for data offload

underpinnings for managing the Wi-Fi in an integrated data offload scenario for the mobile network operator. There are other lingering technical issues as well. Battery life for “always on” Wi-Fi handsets cannot be overlooked. This has improved with progressive designs and approaches from the Wi-Fi alliance. More work needs to be done to enable seamless login/authentication for mobile subscribers in public Wi-Fi Networks. Efforts, undertaken by Devicescape and the WISPr standards in this regard, are commendable. Mobility standards are yet to be widely accepted to allow transparent movement of devices between the two networks though MOBIKE working group is actively engaged to try to solve this. If some of these issues can be resolved, Wi-Fi is likely to be a ‘disruptive’ technology that rapidly moves mainstream.

IntelliNet Solutions for Data Offload IntelliNet Technologies offers a portfolio of interworking WLAN products. These include the IWLAN server which can support the 3GPP modes of a TTG and PDG. IntelliNet provides the interworking elements for supporting authentication with its AAA server. The IWLAN set also includes a Voice Call Continuity Server for supporting voice applications. IntelliNet also enables offload through femtocells with its Femtocell Gateway. Both solutions are available on an Advanced TCA platform and can also be hosted on an OEM platform. About IntelliNet Technologies Headquartered in Melbourne, Florida with offices in Bangalore, India, IntelliNet Technologies is a leading provider of next-generation network convergence and application development solutions for PSTN, cellular, wireless and IP Multimedia Subsystem (IMS) networks. Major equipment vendors, application developers and global operators currently use IntelliNet’s products for prepaid, location services, messaging and fixed mobile convergence. For more information please visit: http://www.intellinet-tech.com

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