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Carrier Wi-Fi Hotspots: Beyond mobile traffic offload

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Ubiquitous access to fixed and mobile broadband networks, the rapid proliferation of smartphones and tablets, and the continuously growing number of compelling applications are profoundly changing the way that end-users live, work, shop and travel.

As a result, the demand for wireless data services is booming and telecom operators are under constant pressure to increase capacity, coverage and quality of their wireless network services.

Even within the home environment, the use of mobile devices for accessing data and multimedia applications and content is becoming pervasive, and more than 70% of today’s residential broadband services are consumed over a wireless connection.

With this growth of mobile devices, services and data traffic in mind, many carriers have started rolling out Wi-Fi hotspots as a means to offload their mobile network from exploding data traffic; embracing Wi-Fi as an additional radio network – both indoor and outdoor.

Besides this mobile offload opportunity, there are other reasons for introducing carrier Wi-Fi services; such as providing nomadic access, transforming the customer experience and generating new revenues.

As a result of the above arguments, the attitude of service providers towards Wi-Fi has changed during 2012, and 43% of WBA-surveyed carriers are more bullish about investment into public Wi-Fi infrastructure than a year ago.

Nomadic user support

The concept of ‘nomadicity’ has been talked about for years, without ever really becoming a reality — but this is changing. The advent of tablets has set a new user experience level for broadband connectivity. People now expect the same level of connectivity experience wherever they sit down and focus, be it at the office, in the pub, at the train station – or any public place for that matter – or at home.

These Digital Nomads typically watch streaming videos, send emails, play games or upload files to cloud applications, and need at least 10-15 Mbit/s to do that. It is clear that this nomadic behavior will have a major impact on today’s networks, requiring a tight focus on connectivity, infrastructure excellence and end-user experience. As these users are expecting ubiquitous data connectivity everywhere, at every hour, and on every device (also non-cellular ones,) network operators will have to exploit all available broadband access technologies – wireline, cellular and Wi-Fi – to satisfy these needs and provide brilliant ultra broadband connectivity and a superb user-experience at a predictable cost.

Addressing user experience painpoints

Historically, public Wi-Fi access has been complicated and device-driven. Even today, users still need to search for SSIDs, track multiple WEP keys, and enter cryptic logon IDs and passwords via portals. And when their device goes asleep, users have to go through the complete authentication process again.

Interfered Wi-Fi hotspots in crowed areas lead to a poor Quality of Experience, an,d certain services seem to be working randomly, or need a separate application to discover and connect. And most of today’s open Wi-Fi networks are lacking security too.

As such, Fixed, Mobile and Converged Service Providers can and should play a prominent role in the roll-out and provisioning of ‘carrier grade’ Wi-Fi services, and provide a safer and better user experience than on 3rd party free(mium) hotspots. While monetizing their knowledge of subscriber profiles, whereabouts and preferences.

Integration with cellular networks

Today, many mobile operators are embracing Wi-Fi as an additional radio network, for offloading data traffic from, and/or to increase capacity and coverage of their cellular infrastructure. An access technology that is rather complementing their 3G and 4G data networks than substituting them, and that may (eventually) generate new business rather than cannibalizing existing revenues.

New (evolving) standards, such as Hotspot 2.0 (defined by the Wi-Fi Alliance), Next Generation Hotspot (defined by the Wireless Broadband Alliance) and the Automatic Network Discovery and Selection Function (ANDSF, defined by 3GPP) are setting the stage for ‘convergence’ of mobile broadband and Wi-Fi services. In the near future they will enable simple, seamless and secure interworking of Wi-Fi and cellular data services and between Wi-Fi hotspots.

Monetizing Wi-Fi services

A majority of mobile operators plan to continue investing in Wi-Fi in parallel with deploying 4th generation wireless LTE services.

Perceived a must-have by end-users, and a need-to-compete by fixed and mobile service providers, it is not obvious to create a sound business case for carrier Wi-Fi hotspot services – that are still too often equated with free Internet access.

Sometimes, Wi-Fi deployment costs are justified as a marketing expense to attract new customers, in some cases the business case is based on customer retention and churn reduction of other services, and in still other cases it is based on service-specific subscription revenues. Additionally, a lot of experimentation in new business monetization models is occurring which may eventually redefine the economic landscape.

According to an Analysys Mason report, only 57% of service providers who have deployed Wi-Fi claim they are already monetizing their offerings. So, service differentiation is key and carriers need to look for innovative monetization models that go beyond giving away Wi-Fi for free or directly charging their customers for access.

Follow Marc Jadoul on Twitter.

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