Carrier Wifi Offload in Africa : the Strategist’s Coolio !!

Presentation1The first Wifi Offload Summit in Africa was a long overdue but welcome event indeed : well organised and superbly executed thanks in no small part to the untiring efforts of the Chairman. The cross industry speakers at the Event ( including yours truly ) waxed lyric about the technology benefits..and its titanic revenue potential ( did someone say a billion dollars in 5 years )..hmmm… wishful thinking is always prevalent at the peak of inflated expectations in the hype cycle !!! But we all know that only a market sizing study to assess the real revenue potential into both the consumer and industrial Wifi segments can calibrate the spin our technology roadmaps and marketing plans.

African Operators have been rather cautious about wifi in their RAN portfolio for many reasons : they thought wifi was not carrier grade since its was not 3GPP “ certified “ , their circuit switched GSM generated huge revenues from voice / sms without capacity constraints , there wasn’t enough submarine bandwidth , the price of smartphones was too high and so on . It is only now with the arrival of low cost wifi enabled smartphones and huge OTT data surge on packet switched cores that African telcos are facing network congestion and revenue decline ( voice / sms ) ….and unfortunately the subscribers higher data consumption does not linearly translate into higher revenue.

So what is Carrier Wifi ?? In carrier Wi-Fi, a mobile operator or an ISP, owns and operates the Wi-Fi infrastructure, manages access from users, and shares the infrastructure with roaming partners. Mobile operators may choose to integrate Wi-Fi within the cellular network, both within the RAN by co-locating cellular and Wi-Fi small cells, and in the core network by integrating authentication, subscriber management, billing, policy, and traffic management. To integrate Wi-Fi in the cellular network, trusted (i.e., run by the operator or its partners) Wi-Fi APs connect to a Wi-Fi gateway that interfaces the mobile core. 3GPP efforts in defining such interfaces and additional functionality to support Wi-Fi integration have been crucial to provide a framework that integrates cellular and Wi-Fi access in the mobile core.

China Mobile is the poster boy of Carrier Wifi : their aggressive Wi-Fi strategy that has led to the installation of 2.83 million APs in its hotspot footprint. In the first quarter of 2013, Wi-Fi traffic on China Mobile’s network accounted for 73% of overall traffic, up from 50% in 2010. In 2012 Free France announced that it has opened up its 4 million-hotspot community Wi-Fi network to its smartphone customers, creating the world’s largest carrier-run mobile data offload network. By leaning heavily on Wi-Fi, Free can offload enormous amounts of traffic that would normally traverse HSPA+ networks, where capacity is scarce and bandwidth expensive to deliver. Ongoing industry initiatives like NGH and Hotspot 2.0, and vendor solutions are unlocking the opportunities ( reduce network congestion , incremental revenue etc ) for Carrier Wi-Fi. Yes : Carrier Wifi as with LTE is all about SCALE to leverage the network externality !!

In addition 3GPP and Wi-Fi Alliance, are developing a standard architecture to enable Wi-Fi interworking and roaming with access to voice, video and multimedia services in the carrier’s 3G or 4G core network. The iWLAN architecture, standardized by the 3GPP, promotes secure connections between the packet core network and Wi-Fi networks. The iWLAN architecture designates a secure connection to the carrier’s core network via an IPSec tunnel, which extends from the UE, through the wireless access gateway (WAG), the GGSN, and from there to the core network or the internet. Carriers may provision, authenticate and authorize traffic for their carrier services on Wi-Fi networks, just as they do for their 3G networks, and they can enforce policy on these services. 3GPP IWLAN is future-oriented and as such is specified only for 3G RANs and handsets and requires SIP and core IMS equipment investments and depends on an embryonic network function—the voice continuity server (VCC) to enable roaming from and to WiFi and GSM access networks.

When debating the choices that mobile operators have for increasing capacity, Wi-Fi, 3G and 4G small cells invariably come up as alternatives or – increasingly – as complementary elements is a multi-RAT strategy. Both Wi-Fi and cellular small cells act as an under-layer to the macro network and bring the mobile network closer to the subscribers – down to street level or indoors. Wi-Fi and cellular small cells address the need for additional capacity in subtly different ways, and this makes them complementary, not mutually exclusive. In some environments – e.g., indoor locations with high traffic loads – Wi-Fi may be better suited. In others – e.g., a park or open urban space – 4G small cells may work better. While planning for a 3G and/or 4G small-cell deployment with integrated Wi-Fi, the differences between cellular and Wi-Fi interfaces are crucial.

The combination of 3G/4G with Wi-Fi gives the mobile operator a good comfort zone. At all times the operator can count on a capacity level from the cellular network that is manageable. Typically the additional capacity from Wi-Fi ensures a higher QoE and hence subscriber satisfaction, but this cannot be guaranteed because the operator does not control the spectrum. According to TCO sensitivity analysis from Senza Fil it appears that Wi-Fi and 4G is the winning combination, because the increase in per-bit TCO is less than the increase in capacity – although the savings over using Wi-Fi alone is small when measured against our benchmark of 4G-only per-bit TCO (42% for the Wi-Fi and 4G combination, versus 43% for Wi-Fi only). More notably, that 42% means operators can have 4G plus Wi-Fi for less than half the per-bit TCO of 4G alone.

To evaluate the potential Wi-Fi hotspot business models and revenue opportunities, carriers must consider their target audiences and how those potential customers use the Wi-Fi hotspot network. At any given Wi-Fi hotspot, a diverse mix of customers may have widely different needs, expectations and device or payment capabilities. Overall, there is no one-size-fits-all business model, and the network architecture and level of integration with existing services will reflect the unique business goals of each carrier in each different market. Analysts believe that the strategic architecture to differentiated Wi-Fi services for customer acquisition, retention and monetization necessitates a careful balancing of the following parameters :

+ Understand capacity and revenue optimization : enable dynamic offload and onload between mobile and Wi-Fi networks utilizing device and network information on subscriber plans, billing cycle, data usage, personal Quality of Experience and network conditions.

+ Enhance customer experience : automatically generating policies based on real-time and predictive Wi-Fi Quality of Service to balance the load between Wi-Fi and mobile networks and improve the subscriber experience.

+ Integrate roaming plans : using ANDSF discovery information and policies for partner Wi-Fi network access and authentication to seamlessly offload mobile subscribers to partner Wi-Fi networks based on subscriber’s data plans and entitlements.

+ Leverage context-aware promotions : capturing and using granular data on connections and user behavior – such as indoor location, dwell time, user travel and subscriber preferences – to deliver targeted offers and advertising directly to the subscriber device.

The humble Wifi radio never ceases to amaze : it is has crossed over into the Internet of Things ( IoT) and machine-to-machine (M2M) worlds. The arrival of low power , standards based Wi-Fi chips heralds a new wave of Wifi applications and revenue for savvy Telcos. Configurable Low Power WiFi is just a fancy term of Wake on Wireless Lan (WoW), which allows the system to be turned on or awakened by a network message. Relative to Zigbee/802.15.4, low power Wi-Fi takes advantage of the benefits conferred by the well established IP and Wi-Fi protocols . Low power Wi-Fi semiconductor solutions are starting to appear on the market addressing applications such as thermostats, water heaters, HVAC systems, blood pressure, glucose monitoring and other healthcare devices, asset or people tracking tags, etc. Wireless Sensor Networks (WSN) market will grow to $1.8 billion by 2024 according to research reports. Wireless Sensor Networks will eventually enable the automatic monitoring of forest fires, avalanches, hurricanes, failure of country wide utility equipment, traffic, hospitals and much more over wide areas, something previously impossible.

But here is a reality check for African Telcos : successful Carrier Wifi works best with fibre optic backhaul. And terrestrial fibre optic in Africa is still a SLOW work in process. The burning questions for African telcos : when to offload and how to do it ?? What about the arrival of LTE u ? Is it better to have technology consistency in the RAN portfolio ? Are sensor applications in industry verticals a more profitable market to pursue ? Is the terrain best covered by macro cells ? Is a standalone wifi network to offer different applications and services a viable option ? what about availability of locations to set up Hot Spots ? do i really need to offload or can i use cheaper technology mechanisms (like policy control , network optimization etc ) to reduce congestion and enhance the QoE etc ? .Can we create an aggregated Wifi Cloud on existing wifi assets in Africa ? Many questions need to be asked and answered in a sober manner before you embark on the Carrier Wifi journey.

Bottom line:don’t jump into Carrier Wifi without an Opportunity / Risk / Reward analysis because monetising Carrier Wifi Technology investments is much more complex than it seems.In every case a solid business case must be constructed based on all technical and commercial variables that influence the ROI through the Hype Cycle into the plateau of productivity.And oh yes…please make sure you have sufficient CAPEX before you implement Carrier Wifi !!

Sadiq Malik ( Telco Strategist )

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