Ovum: Carrier Wi-Fi - you've got questions, I have answers
Since joining Ovum in the second-half of 2011, I have gotten more questions on one topic than any other, carrier Wi-Fi. This really comes as no surprise given the activity level in this area. For those that don't know carrier Wi-Fi basically takes standard 802.11 technology and enhances it to support service provider needs for such things as advanced security and multiple SSIDs.
This year alone has seen Ericsson acquire BelAir networks and Nokia Siemens Networks enter a reseller agreement with Ruckus Wireless. Alcatel-Lucent, Huawei, and ZTE all now have Wi-Fi as part of their small cell strategy. On the operator front interest remains strong as well, especially in areas where there is strong smartphone adoption, such as South Korea, Japan, and the U.S.
Given the high level of interest in this topic and the repeated inquires I get about it, I thought it would be worth going through some of the most common questions I am asked.
Question: Do we need to build out a carrier Wi-Fi network completely on our own?
For most operators building out a carrier Wi-Fi network completely on their own doesn't make sense. It would require too many access points to cover all there areas where coverage is needed. Also, since Wi-Fi transmits in shared spectrum, too many competing access points operating in a single area will cause interference with each other, making the access points unusable. The sensible thing is for operators to share network resources where possible.
A good example of this is the recently announced cable Wi-Fi roaming agreement between Comcast, Time Warner, Cable Vision, Bright House, and Cox called "CableWiFi." With CableWiFi subscribers to any of the five cable operators will be able to access the Wi-Fi hotspots of the other operators when they are outside their home network area. This allows each cable operator to effectively expand the number of Wi-Fi hotspots available to their subscribers, while limiting the number of sites they have to actually build and manage on their own.
Bottom line, if an operator has the Wi-Fi assets such that it can go it alone, do so, but there is no reason an operator can't partner with other operators in building out a Wi-Fi network.
Question: What revenue levels can I expect our carrier Wi-Fi network to generate?
Answer: Creating a new service offering with its own revenue stream isn't really the main motivation for building out a Wi-Fi network these days.
This question is usually followed by can you help me figure out the number of subscribers we can signup over the next 24 months and the amount of revenue my company can generate from them? No doubt this person has had a previous meeting with somebody in finance looking for an ROI. The fact is, the old hotspot subscriber/revenue model is very low on the list of reasons operators deploy hotspots today.
Fixed operators in very competitive markets are using Wi-Fi as a value-add service to attract users, extend their brand outside of their home area, and help prevent churn. Churn prevention is also an important driver for mobile operators when it comes to Wi-Fi.
For mobile operators it isn't so much about standing out in a crowded field of competitors, but as a way to manage overcrowding on their networks. Mobile operators are using Wi-Fi hotspots as a way to augment limited licensed spectrum holdings. With mobile operators targeting high-value smartphone subscribers, they can't risk losing those subscribers due to poor cellular network performance. Wi-Fi can help with that. There is another benefit from deploying a Wi-Fi network and it relates to the first question.
Operators can generate revenue from selling Wi-Fi network access to other service providers. This may not be the main reason to deploy the network, but it does provide an additional benefit from the network; a benefit that generates revenues and helps to meet those pesky ROI questions coming from finance.
Question: Where does Wi-Fi fit into the whole small cell picture?
Answer: Carrier Wi-Fi is part of small cells, not something separate.
Now this answer would have seemed silly a few years ago when small cells (femtocells to be exact) and Wi-Fi were pitted against each other. Today that isn't the case. Small cells solutions can include both 3G and LTE along with Wi-Fi. Several notable base station vendors as discussed earlier, have Wi-Fi as part of their small cell roadmaps. Eventually they plan to market pico and micro cells that include a Wi-Fi access point. I would even suggest that operators expecting to deploy licensed small cells in the future deploy Wi-Fi today.
Deploying Wi-Fi today will allow operators to claim real estate that can eventually be used for other small cells. Wi-Fi access points located on light poles and the side of buildings today can be used for micro and pico cells in the future.
One thing I try to tell people when I am asked about carrier Wi-Fi, Wi-Fi network solutions have evolved. Carrier Wi-Fi solutions today are very different than the consumer Wi-Fi or even the muni-mesh networks of old. Work underway with Hotspot 2.0 and ANDSF will make Wi-Fi more tightly integrated with cellular networks. Operators can expect improvements with such things as network handoffs, subscriber authentication, and policy enforcement over time. Even throughput on Wi-Fi is getting better with 802.11ac. What they see today with Wi-Fi most likely will only improve in the future.
Daryl Schoolar is Principal Analystof Wireless Infrastructure for Ovum. Daryl's research includes not only what infrastructure vendors are developing in those areas, but how mobile operators are deploying and using those wireless networking solutions. Contact him at firstname.lastname@example.org and follow him at @DHSchoolar.