Carrier Wi-Fi is giving service providers a means to cut costs and increase efficiency in a competitive market. It highlights an increasing focus on retention rather than ARPU, as well as opening up new revenue streams with services such as advertising.
Nearly 10 years ago, the deluge of data created by smartphones such as Apple’s iPhone device created a need for more capacity. Thought to be the first mobile operator to take the technology seriously, AT&T in the US built an app and a means of switching seamlessly from Wi-Fi to data networks. It resulted in a huge flurry of carrier Wi-Fi, and growing interest in offload in the US and in Europe.
‘It becomes a way of extending the mobile network,’ explains Steven Hartley, practice leader of industry, communications and broadband at Ovum. ‘There is a huge focus these days on customer experience to avoid churn, hence it makes sense to give people data when you can.’
Carrier Wi-Fi comes in multiple guises and its definition is not industry agreed. According to Ton Brand, senior director of marketing and industry development at the Wireless Broadband Alliance (WBA), the technology comprises: ‘A Wi-Fi network operated by a carrier – and not necessarily mobile – extending mobile networks with carrier Wi-Fi including Wi-Fi service providers that are able to manage the whole network and to deliver the quality of service. In general terms, this is best effort-based access.’
Globally, carrier Wi-Fi is already starting to be delivered, says Brand. ‘Around 17 operators have implemented it so far. There is already a SIM card in your mobile phone, so this can be used to offload.’
In the UK, operators including O2 – which claims it has 10,000 Wi-Fi hotspots across the country – have been active in the area. Adrian Cunliffe, chief technology officer at the operator, says: ‘Carrier Wi-Fi is an industrialised Wi-Fi service that offers seamless and secure connectivity for customers. Customers can access carrier Wi-Fi easily and don’t need to provide the user credentials that are often required to access public Wi-Fi, making the service quick and easy to use.’
According to Steve Hratko, director of service provider marketing at Wi-Fi solutions manufacturer Ruckus Wireless, carrier Wi-Fi is deployed to build infrastructure. Additionally, he says: ‘Mobile operators put in Wi-Fi where there isn’t cellular capacity; and they use it to provide a managed service.’
Although mobile operators focus first and foremost on cellular, they are deploying Wi-Fi in high density areas, Hratko says. ‘There are locations where something is causing the entire cell to be overloaded. Wi-Fi can help this.’
However, Hratko says: ‘Everything a carrier does is big so you need a network that is self-organising and self-optimising: it can’t require careful engineering at all.’
As a result, Ruckus has done a lot of work with ‘adaptive antenna activity’. ‘There is a mechanism where you can automatically select the best channel,’ says Hratko. ‘This is self-optimising and organising.’ Also, he adds: ‘Once you get into business with Wi-Fi you can sell other services. Mobile operator hotspots is the focus.’
Carrier Wi-Fi is not in itself a money-making technology, but the services that go on top of it will generate revenue. Value-added services are often location based, with advertising becoming increasingly part of the mix.
The WBA’s 2014 industry report found multiple business models, says Brand. ‘So operators need to work on ‘what is the best model for me?’ ‘How do I make money?’ There is a legacy issue but we advise to just do it in one location and see what the benefits are. It’s not necessarily trialling the technology, but the service.’
Hold ups to adoption
Although carriers are recognising the benefits, there are still delays to adoption. A number of carriers are still developing their Wi-Fi strategy, says Brand. ‘Some have decided not to do anything and others have a fully-fledged strategy. In the next couple of years, more will start to develop a strategy.’
According to David Nowicki, chief marketing officer at California-based Devicescape, which provides users with access to a curated virtual network of more than 20 million amenity Wi-Fi locations worldwide, mobile operators say the challenges for them span cannibalisation, quality and security. However, these fears are often unfounded, he says.
For example, Nowicki points out, Devicescape research found Wi-Fi customers actually use more mobile data. ‘When you intelligently integrate Wi-Fi with cellular you get more cellular, not less.’
Other issues include the need to ensure high quality once connected. Hratko says the answer is radio resource management including network load balancing. ‘If an access point (AP) has a strong signal but is heavily loaded, it will route to another AP that is not.’
Additionally, everything has got to scale, says Hratko. ‘You need management systems to scale and virtualise everything if you can.’
The move to Wi-Fi is a cultural challenge, but one that can be overcome. ‘Culturally and operationally, one of the most significant changes is that the carrier doesn’t care exactly where the connectivity is coming from and how it’s being provided,’ says Hartley.
He adds: ‘You need to have the connectivity, and the expectation is that it will work anytime or anywhere and so operators need all the pipes: LTE, 3G and Wi-Fi. It’s not about ARPU, but customer life cycle.’
And for the time being, Brand says that the WBA’s forecasts show that confidence in the sector has grown. ‘There is above 65% confidence of deploying in two years – when I joined it was 40%. It’s just a matter of time.’
It can be seen that carrier Wi-Fi is here to stay, as part of a bigger mix. Brand says: ‘We think in the long term, the ideal mix will be macro-cells, small cells and Wi-Fi networks. There is no way back. I think it’s not about if this is going to happen, it’s when.’
Box: Growing revenue opportunities for carrier Wi-Fi
Wi-Fi is becoming fully integrated with other networks through advances such as Passpoint and Next Generation Hotspot, according to the WBA’s industry report 2014, Carrier Wi-Fi: the state of the market.
According to the WBA, key developments in the carrier landscape have brought new considerations into the business mix: the increased cost of supporting or upgrading to carrier-grade Wi-Fi, as well as the potential of new revenue-generating services including voice services, internet of things (IoT) offerings and roaming revenues.
The WBA says these trends will drive an increase in the installed base of public Wi-Fi hotspots accessible to carriers to reach more than 7 million, rising to 11.75 million in 2018
Box: Next Generation Hotspot and Passpoint Certification
The WBA’s Next Generation Hotspot (NGH) programme aims to deliver a public Wi-Fi experience that is as easy and secure as that experienced on cellular networks. Hotspots will be easier for users to find and access, because devices can connect securely and automatically with no need to manually enter user names or passwords.
The aim is to make interoperability across networks, technologies and devices much simpler. The new NGH Wi-Fi hotspots also feature similar levels of security to the cellular network, including end-to-end radio link encryption and SIM authentication.
The Wi-Fi Certified Passpoint solution was developed in the Wi-Fi Alliance (Wi-Fi equipment designers and vendors) through partnerships between mobile device manufacturers, network equipment vendors, and operators. Equipment that meets the NGH standards is certified as Passpoint enabled.
In October 2014, new features were added to the programme that were designed to expand the programme’s strategic value to mobile and fixed operators, and open opportunities for other sectors as they invest in Wi-Fi to meet business challenges.
The new features include a streamlined process to establish a new user account at the point of access, enabling immediate online sign-up and account provisioning. This reduces barriers to account creation and usage for service providers, while reducing the complexity of getting connected for users.
A second new feature enables the process of establishing a new account, or connecting a second device, to take place securely. Devices are provisioned with the appropriate credentials and configuration for network access. Users can be confident they are connecting to their chosen provider’s valid network, and their credentials are exchanged securely.
The third key feature is of particular interest to operators, as it gives them more control. Passpoint now includes the capability for service providers to distribute their specific subscriber policies, such as which networks to join and in what order of preference.
This policy support enables service providers to deliver the best user experience on Wi-Fi, while still easily maintaining the business requirements of Wi-Fi roaming agreements.