By now it's no secret that the rise of smartphones and dongles is driving wireless broadband usage to epic proportions. And it's not going to slow down anytime soon - Cisco Systems' Visual Networking Index estimates that mobile data is growing at a rate of 108% annually, and by many cellco accounts, most of that is being generated by just a fraction of their user base.
The mobile data deluge is, of course, the chief reason cellcos are making plans to evolve to all-IP 4G, but for all the capacity gains and efficiencies to be had from LTE RANs and powerful backhaul solutions using Carrier Ethernet, cellcos are also aware that simply throwing more bandwidth at their smartphone and dongle users is an expensive undertaking that will only get them so far.
Which is why network offload solutions that divert data traffic from the macro network and onto localized broadband connections are generating a lot of interest at the moment. In fact, mobile data offloading will triple in the next five years, according to an ABI Research report. Currently about 16% of mobile data is offloaded from mobile networks today - that will grow to 48% by 2015, during which time data traffic itself will have grown by a factor of 30, meaning that offloaded data will expand 100-fold from current levels, ABI says.
Femtocells and Wi-Fi are the two most visible offload technology options being touted by vendors at the moment, and for a good reason - Informa Telecoms & Media estimates that over 80% of mobile data originates from homes and offices where local broadband connections already exist, and can serve as offload backhaul links for localized access points like Wi-Fi and femtocells.
Such solutions not only promise to ease the strain on macro capacity, says ABI Research practice director Aditya Kaul, but also save cellcos money. "Moving data costs a surprising amount," says Kaul. "Wi-Fi and femtocells in particular do that at a tiny fraction of the per-gigabyte cost of a 3G network." Interestingly, however, there's more to offload than hot spots - in fact, there's more to offload than offload. Cellcos have a number of data traffic management tools at their disposal, from Wi-Fi and femtocells to mobile CDNs (content delivery networks) and media optimization, among other things.
Which ones should cellcos use? As many as necessary, actually.
Femtos: approach with caution
Femtocells are arguably at the top of the offload hype cycle, particularly now that commercial deployments have been announced. Informa says some 13 operators have commercially launched femtocells (compared with only six commercial launches in November), including Vodafone Spain, AT&T, Softbank Mobile and KDDI. China Unicom is trialing femtocells in Beijing. SK Telecom plans to roll out femtos in November.
Still, femtos have been slow to catch on, partly because of uncertain business models and the subsequent marketing challenges, and partly because they're essentially a new network element that cellcos have to be able to integrate and manage.
The latter is crucial, says Steven Hartley, principal analyst of Ovum's mobile practice, because the customer experience has to be as painless and plug-and-play as possible, and it takes a lot of work at the backend to enable that.
"If you want to do anything sophisticated with femtocells besides simply improving indoor voice coverage, you really have to look at how it's going to connect to your network management system, network control system, billing system, mediation system, customer support system, and emergency call system," Hartley says. "How do you manage that on the network, how does it interact with the macro network? Those are important questions when you start thinking about how to evolve this to something more sophisticated like offload."
The distinction between using femtos for coverage vs offload is important, he adds, because offload requires more sophisticated functionality, as well as better interference management. "Deploying femtos for coverage is a niche market and you don't have interference issues to manage. It's more difficult with offload. Vendors talk about self-optimizing femtos that can power up and power down, but if you've got an apartment block and you're serving everyone with a femtos and they all power down, then coverage becomes the area the size of a small conference table. Or it powers up and either interferes with neighbors or with the macro network. So they have to work out how to manage that."
Much of this is why operators are approaching femtos with caution, says Hartley, and why most deployments to date have been primarily aimed at improved coverage rather than offload.
That said, Jai Rajaraman, Asia Pacific senior director for the GSM Association - which has been working with the Femto Forum since 2008 to develop femto solutions for 3G and 4G - says integration isn't a major issue.
"Any new technology is going to have integration challenges, but a lot of the teething problems have already been ironed out," Rajaraman says. "I think most operators have got a good sense of how to put a femtocell into their network and integrate it with their existing offerings, so I don't see it as a problem as such."
Dell'Oro Group expects the femto market to kick in around 2012, with 62 million units shipped worldwide by 2014. (ABI Research's projections are more conservative at 54 million units shipped by 2015.)
Wi-Fi: already here
In the relative absence of femtocells, Wi-Fi is expected to be the default hot-spot offload option for many cellcos - which is a major turnaround from the attitude of operators towards Wi-Fi hot spots several years ago, says Selina Lo, president and CEO of Wi-Fi solutions vendor Ruckus Wireless.
"Before, they looked at Wi-Fi as a separate P&L, and the biggest concern was the backhaul costs and the conventional wisdom that no one wants to pay for hot spot access outside of maybe airports and hotels. Now they look at Wi-Fi as a way to save money for their bigger network by offloading traffic," she says. "So the business model has changed, and I have to say: thank you Steve Jobs, because the iPhone really did change that."
And the tablet market pioneered by the iPad is pushing the offload case further, she adds. "Four weeks after the iPad came out, it became the third largest traffic generator for hot spots in the US. Fundamentally with mobile internet, the thing operators have to realize is that the apps are not controlled by them anymore - users can buy whatever they want and eat up whatever bandwidth they want. You can go to LTE or 5G, I don't care - spectrum is always going to be limited."
One of the main challenge for operators adopting a Wi-Fi strategy is bundling it with their mobile broadband offering to make it easy and seamless for the end user, Lo says.
"There are a few elements to that, like automatic sign-in so you don't have to log in every single time, or when your device switches from the mobile network to the hot spot," she says. "You also need a big enough footprint, because people won't spend time looking around for your hot spot."
Another challenge is that the old model of best-effort Wi-Fi won't be good enough in an operator portfolio, she adds. "Wi-Fi is now part of the operator infrastructure so quality is becoming very important - not just coverage and stability and consistent user experience, but also dealing with interference. It's unlicensed spectrum so anyone can put up a hot spot anywhere."
Not unexpectedly, Lo is bullish on Wi-Fi over femtocells as a local offload options, if only because it's already here. "Look in the home, and there are many devices that are never going to have a mobile connection, like my set-top box, and lots of devices that already have Wi-Fi in them. Just about every smartphone on the market now has Wi-Fi in it already. So femto is coming, for sure, but it isn't going to kill off Wi-Fi."
Hartley of Ovum agrees, but emphasizes that, vendor rivalries aside, it's not an either/or proposition, not least since home media gateways are likely to support both femto and Wi-Fi connectivity, so it will come down to operators using what assets they have.
"If you own a public access Wi-Fi network, it's a logical extension of what you're doing. If you can get it wholesale, do it as long as it's viable, and as long as you can do it seamlessly and not have to log in again if you switch from one network to the other," he says.
The GSMA is advising the same thing to its own members, says Rajaraman.
"It's highly network-specific, so whatever you're able to get your hands on will be ideal in your scenario," he told Wireless Asia, though he added that cellcos deploying Wi-Fi need to pay special attention to authentication. "When you have Wi-Fi, you have to be able to understand who the user is and authenticate the SIM card, whereas with femto it's a lot simpler."
Hartley notes that both technologies will face at least one common problem: backhaul via fixed broadband access. "That's not an issue for fixed broadband providers with mobile businesses, but if you don't own it, you have to lease, and even if the broadband provider is willing to allow your traffic on their access pipes, if they're running HD IPTV streams, they're going to prioritize their service over yours."
Optimization: smart compression
As stated earlier, femtos and Wi-Fi are only two pieces of the mobile data management puzzle. Another tool - and one already being implemented - is media optimization. According to ABI's Kaul, media optimization will be the fastest growing segment in the mobile traffic management space and deliver the greatest traffic reduction of all the methods mentioned so far.
John Giere, senior products and marketing VP for Openwave Systems, says his company's optimization solutions can produce 40% to 60% compression rates, depending on the network and the type of traffic.
"Typically, web compression sees around a 40% gain, video around 30%, so the overall savings depend on the traffic mix," Giere says, adding that the balance of web and video traffic will increasingly shift in favor of video. "The mix of web and video content used to be around 90-10 in favor of web, now some are closer to 60-40, and in the next couple of years video will overwhelm web browsing traffic even as web traffic continues to grow."
Giere says cellcos are already turning to media optimization as they realize the traditional ten-year cycle of network equipment capacity upgrades isn't keeping up with capacity demand, thanks to smartphones and unlimited data plans. "Now we're seeing a greater level of activity take place in mobile CDN, caching, optimization and offload because most people have realized that the traditional cyclical process isn't going to suffice."
It's not just about better compression techniques, he adds. Other key elements to media optimization include intelligent caching techniques that not only pre-stage content closer to the edge of the network, but use analytics to discover and pre-fetch popular content - and pre-format it all so that it can be delivered to the right OS on the right device at the right resolution.
"You also need the intelligence and analytics to be aware of things like network congestion - like, say, at a conference, which creates a high-density traffic area - and being contextually aware based on location, device and type of content being fetched," he says.
Intelligent data management can even be taken to data centers and core networks, according to Cisco Systems. The company touts its CRS-3 core router - announced in March this year - not only as the fastest core router on the block (with an aggregate capacity of 322 Tbps), but also one equipped with network intelligence features like Cloud VPN, which creates tunnels for enterprises to extend their MPLS network into carrier cloud resources, and Network Positioning System (NPS), which allows the CRS-3 to connect service requests for data center resources to the closest geographical data center that can fulfill that request - something carriers currently either have to manage manually or automate in a non-intelligent manner.
Put simply, the CRS-3 is "content-aware" enough to "make intelligent decisions on steering users to content based on the distance or number of hops, and also helps service providers make smarter decisions on where to store content in the network and keep more traffic off the core", says Jeff White, vice-president for Cisco's Service Provider Business unit in APAC.
"It also lets service providers make intelligent decisions on where to store content in the network and keeping more traffic off the core," he adds.
That matters to carriers with wireless divisions because Cisco designed the CRS-3 specifically for the three main traffic types that telcos need to ready their networks for: data center/cloud, video and - yes - mobility, says White.
"Those are very different traffic types traversing across a common architecture," he says. "The networks need intelligence to allow operators to get better economics and allows the end users to have a better experience. And that's not trivial by any means."
Select all that apply
The upshot is that cellcos are going to need as many of these techniques as possible, and as budgets and assets allow, to cope with the vast amount of data headed their way in the next few years. The good news, says Kaul of ABI, is that various offload options can easily co-exist because each address different aspects of the same basic problem.
"Wi-Fi is effective in covering limited areas containing many users, such as transport stations and sports venues. A femtocell, in contrast, is a good solution for targeting small numbers of heavy data users," Kaul says. "Mobile CDNs attack the problem of frequently-used content, for example a video that has 'gone viral', by caching the file locally rather than loading it onto the network for each download request."
Hartley of Ovum adds that LTE itself will bring extra benefits besides raw capacity to help cellcos manage their data traffic better to ease the burden. "
As you move to LTE, your data traffic efficiency gets better and better, and you'll have better traffic shaping and management tools, content mediation solutions that streamline content so it's purposed for the device, and policy control systems," he says. "You've also got operators moving away from all you can eat, so you can create tiered segments so that the traffic load is less relevant because who cares as long as they're paying for it?"