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The Growing Synergy between Small Cells and Wi-Fi

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The Growing Synergy between Small Cells and Wi-Fi

David Chambers ThinkSmallCell

May 2013 A White Paper sponsored by Avren Events

The Growing Synergy between Small Cells and Wi-Fi

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50% of mobile data on Verizon Wireless is video today and forecast to grow to 66% by 2017

Is a wireless data tsunami really about to hit the industry? There are surprisingly divergent views across the industry about an impending dramatic increase in mobile data traffic demand the so-called data tsunami and whether mobile network operators are fully prepared to meet it. Many conference presenters refer to the Cisco VNI forecast1, which have proved remarkably accurate to date. Although recently revised downwards, this still projects a 13-fold global growth between 2012 and 2017. Dense urban areas can expect an even stronger increase.

Todays traffic levels are already substantial. Actix, who provide performance management systems for many operators worldwide, identify that a single square kilometre in a mature 3G urban network handles on average more than 50,000 unique subscribers generating 300 GBytes of data per day2. That results through more than 800,000 3G data connections, and 45,000 3G and 2G voice calls. Virgin Media, who installed free public Wi-Fi throughout the London Underground, report over 1 million Wi-Fi sessions per day3 and average throughput of 18Mbps.

Factors affecting mobile data traffic growth include the pace of LTE take-up, the maturity of 3.5G DC-HSPA+ deployments and significant use of Wi-Fi. The health of regional economies, appetite for new technology, cost of spectrum, ARPU and competitive environment all add further variability. Verizon CEO Lowell McAdam reported4 that about 50% of mobile data on their network is now video and is expected to reach 66% by 2017.

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AT&T saw a huge step change in traffic demand after launching LTE

The impact of this growth affects network operators differently. Speaking at Aprils TNMO conference, Telecom Austria was at pains to point out that they saw traffic increasing linearly rather than exponentially on their network, and felt this was entirely manageable. In Asia, we have seen dramatic peak traffic levels from early adopters of LTE, especially in Korea and Japan. Gordon Mansfield, AVP at AT&T leading their LTE and Small Cell initiatives pointed to a huge step change in traffic demand after launching LTE, partly due to their being many devices already in place able to use it. He believes that European operators may be surprised at how quickly traffic increases once LTE develops.

Mobile Operators dont see the whole picture But perhaps mobile operators arent seeing the whole picture about data traffic that their customers consume. Before smartphones, all transmissions to and from mobile phones were sent via the mobile network almost entirely voice and SMS text. Today, the majority of data traffic bypasses the mobile operator, using private and public Wi-Fi or being side-loaded directly from a computer.

One way to capture a better picture of this is from aggregate statistics of traffic optimization apps, running on many smartphones. A study from Mobidia5 indicates that at least 50% of wireless data makes its way to/from smartphones via Wi-Fi, and less than 50% via the

At least 50% of wireless data consumed by smartphones is sent across private Wi-Fi

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cellular networks, with only around 2% travelling over Service Provider Wi-Fi. This excludes any side-loaded data delivered by wired connection from iTunes or similar. With the advent of HotSpot 2.0 and seamless roaming using cellular SIM cards, it seems likely that SP Wi-Fi use will quickly grow and further augment cellular data.

A missed opportunity? The rapid growth of Wi-Fi is partly a consumerled response for convenient wireless connectivity in the home and office that wasnt fully satisfied by the mobile network industry. The requirement of low price point, short range and private secure access didnt match the characteristics of wide area public service cellular networks. The mobile industry did not adopt femtocells as rapidly as expected, leaving the market open for hotels, pubs and cafs to install their own Wi-Fi. In our connected world today, consumers actively seek out accommodation and venues with good (and often free) Wi-Fi service6. In response, the tourist industry seeks to satisfy that need. For example, Tourism Australia is encouraging hoteliers to offer free Wi-Fi throughout the country7. Instead, we saw mobile operators derive short term commercial advantage in promoting the use of Wi-Fi to offload traffic from their networks. It seemed they didnt care what their users did - just so long as they did it somewhere else. Offloaded traffic was unmanaged, and operators didnt have sight of what their users were really doing. From 2009, operators such as Sprint actively mandated8 that all smartphones sold for use on their networks were Wi-Fi capable, helping to relieve pressure on the network. The trend continues to grow, with operators such as KDDI Japan now offloading 50% of its wireless traffic to its 220,000 public hotspots, AT&T Wireless doubling the number of public Wi-Fi hotspot sessions in the last year to over 2.7 Billion connections, and even developing countries beginning extensive public access Wi-Fi investment throughout Africa and South-East Asia9.

Working towards a closer synergy between cellular and Wi-Fi Commercial partnerships between cellular operators and Wi-Fi aggregators have evolved, allowing cellular customers to use their mobile accounts to access Wi-Fi. The customer experience has varied tremendously from its early stage where multiple login screens, security concerns and high one-off connection charges discouraged casual take-up. Wi-Fi aggregators offer connection managers and Apps to simplify the experience, but these are usually locked to individual resellers.

Initially, mobile operators saw Wi-Fi primarily for offload and encouraged or mandated Wi-Fi for all smartphones

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Cellular operators are now more willing to share revenue with partner Wi-Fi networks, recognising that these can often deliver data to their customers at lower cost per bit. It expands their coverage and capacity, deferring capital expenditure in favour of additional opex costs.

More recently, weve seen carriers building out their own Wi-Fi networks, offering free or low cost access to both their own and competitors customers. Examples including AT&T acquiring Wayport in 200810, Telefonica O2 deploying Wi-Fi in London for the 2012 Olympics, Virgin Media installing Wi-Fi throughout the London Underground and China Mobile now exceeding 4 million

public access Wi-Fi hotspots nationwide. Aggregate Wi-Fi networks continue to expand, with FON now reaching 7 million access points throughout more than 100 countries11. LTE and Wi-Fi is also a popular combination. In South Korea, both SK Telecom and KT have installed more than 10,000 LTE/Wi-Fi capable small cells each. The next stage involves much closer interworking between Wi-Fi and Cellular worlds. This is particularly true for public access Wi-Fi which is becoming seen as just another radio access technology to be used alongside 3G and LTE.

AT&T Wireless now have over 600 Wi-Fi roaming agreements in place

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Combining cellular and Wi-Fi into the same service Increasing levels of integration between the cellular and Wi-Fi networks have evolved over time12. There are four stages of technical integration:

Independent access to Wi-Fi, primarily for data offload SIM authentication using HotSpot 2.0, simplifying and automating access to a

cellular networks own and partner Wi-Fi access points Sharing a common core, billing and control network, allowing the same

services and support to be used for Wi-Fi and cellular traffic Intelligent traffic steering to determine which users and traffic types are

redirected to use Wi-Fi

Today, most cellular and Wi-Fi networks remain as parallel architectures requiring devices to cope with separate IP addresses, authentication methods and traffic routing. While some of the complexity is hidden from the end user by using a mobile App, there remain some practical issues that have limited adoption.

Physical small cell products are now available which integrate these different technologies. Many operators are mandating this in their procurement specifications and most small cell vendors specifically offer this option. Examples include, but are not limited to, Ubiquisys13, ip.access14, Nokia-Siemens15, Cisco16, Contela17 and Qucell18. HotSpot 2.0 greatly simplifies the users interaction required to select and connect through compatible access points and networks. Gone is the difficult choice from a dubious list of potential networks and login portal pages. Once adopted, this should simplify and speed up the selection and access to public Wi-Fi.

Seamless access to secure Wi-Fi service will allow Service Provider Wi-Fi usage to grow quickly. Initiatives by the WBA (Wireless Broadband Alliance) integrate the back-office