How Offloading Mobile Data Traffic Can Save Middle East Operators Millions

Demand for Wi-Fi has grown substantially since the early 2000s. International Data Corporation predicts that the number of home access points (APs) globally will reach a quarter-billion by 2014, compared with 154 million in 2011. The Cisco Visual Networking Index (VNI) projects that global IP traffic transmitted over Wi-Fi will represent 46 percent of all IP traffic by 2015.

The Middle East is no exception. Saudi Arabia and the United Arab Emirates (UAE) are two countries where there are more mobile subscriptions than people -- the mobile subscription rate in Saudi Arabia surpassed 181 percent of the population in 2012, while the UAE mobile subscription rate reached 159 percent, according to a study by Cisco IBSG.

Mobile data is a big part of this growth, accounting for nearly half of UAE mobile subscriptions. In Saudi Arabia, wireless broadband subscriptions reached 11.7 million in the third quarter of 2012 -- more than five times the number of landline broadband subscriptions. The fast-growing number of smartphone and tablet broadband connections is projected to consume more than 1.1 exabytes of data in Saudi Arabia and 677 petabytes in the UAE by 2017.

This growth threatens to overload the capacity of regional mobile operators, who may be struggling to ensure availability of high-speed packet access (HSPA) and long-term evolution (LTE) spectrum. Wi-Fi could hold a solution, transforming wireless Internet access by offering higher speeds, improved security, and more availability on almost any connected device.

Globally, mobile operators are expected to drive Wi-Fi growth through accelerated technology adoption. Because of this, operators in Saudi Arabia and the UAE must consider Wi-Fi a key pillar of their broadband strategies to increase revenues and decrease costs.

Four business models can help operators provide Wi-Fi to achieve maximum results: 1) direct Wi-Fi service to end users, 2) indirect Wi-Fi service through third parties, 3) wholesale Wi-Fi service to other mobile operators, and 4) mobile data offload.

Mobile Data Offload

The fourth business model, mobile data offload, is highly recommended because it can help mobile operators in the Middle East reduce HSPA and LTE infrastructure costs -- by roughly 26 percent, or $901 million in Saudi Arabia and $316 million in the UAE.

Cisco IBSG calculated cost reductions operators in both markets can expect between 2013 and 2017 under four offloading schemes, and then compared these savings with the costs of not offloading data from HSPA and LTE to Wi-Fi Networks.

In addition, mobile data offload is a viable alternative for serving mobile broadband users in crowded locations such as shopping malls, where spectrum availability for HSPA and LTE mobile access networks is limited.

Creating a detailed business model, conducting a network assessment, and selecting the right indoor and outdoor Wi-Fi locations will help operators maximize the benefits of their Wi-Fi investments, enhance the user experience, and ensure the efficiency of mobile data offload over the long term.

Further benefits of mobile data offload -- including recommendations on which Wi-Fi business models and technologies will help support Middle East operators’ strategies and maximize their investments -- are discussed in two new white papers from Cisco IBSG: “Wi-Fi for Saudi Mobile Service Providers: Offloading Mobile Data Traffic to Wi-Fi Can Save Saudi Operators up to US$901 Million” and “Wi-Fi for UAE Mobile Service Providers: Offloading Mobile Data Traffic to Wi-Fi Can Save UAE Operators up to US$316 Million.”