Mobile World Congress 2011 Scorecard: Infrastructure

Whose profile is rising? Policy control and network optimization

Cisco's latest mobile data study was an oft-cited topic at this year's Mobile World Congress. The study showed global mobile data traffic growing 26 times between 2010 and 2015, to 6.3 exabytes--a billion gigabytes--per month. Additionally, fully two-thirds of all mobile data traffic will be video by 2015, the report predicted.

Cisco's findings were bolstered by similar numbers from Tellabs. According to Tellabs, North American operators have a high likelihood of reaching the end of their profitability by 2013, as operators' ability to meet demand with capacity reaches its limits. 

So it's clear that the tide of mobile data is rising and is a problem. What to do? Most operators have already leveraged brute force with price increases and usage caps. Take for instance AT&T Mobility's decision last year to replace its unlimited data pricing for smartphones with a tiered pricing scenario. Instead of allowing users to download as much as they wanted--thus taxing an already strained network--AT&T imposed pricing plans that would require subscribers to pay for the data they consumed. Other carriers, such as T-Mobile USA and Verizon Wireless (NYSE:VZ), also have taken tentative steps toward metered pricing. Still others, such as Sprint Nextel (NYSE:S), have opted to retain unlimited offerings but are charging more for them.

But a range of vendors promise a more delicate approach to the problem--and at MWC this year they were out in force. Vendors both big (Alcatel-Lucent (NYSE:ALU) and Tellabs) and small (Allot Communications, Flash Networks, Telcordia, Broadhop, ByteMobile, Sandvine, Acme Packet, Bridgewater and others) made policy control and network optimization hot topics of discussion among wireless operators. For example, Alcatel-Lucent discussed the combination of its Network Guardian with its Dynamic Services Controller, while Allot disclosed enhancements to its Service Gateway Sigma.

Indeed, as analyst Dean Bubley of Disruptive Analysis pointed out, Ericsson's cloud-services deal with Akamai smacks of policy control. "It should be able to combine video optimisation/caching with the ability to tweak policy right the way down to the scheduling algorithms in the base stations," he wrote.

Of course, it shouldn't come as a surprise that network optimization and policy control are hot topics. Verizon Wireless, the nation's largest wireless carrier and the owner of the world's largest LTE network, has invested heavily in the area. Early last year the operator signed a deal with Camiant (now Tekelec) for policy control. Specifically, the carrier purchased Camiant's Multimedia Policy Engine for "vital real-time intelligence and management of network resources." And then, late last year, Verizon spent a whopping $56 million for Bridgewater Systems' mobile control solutions.

That said, there remain a number of obstacles to operators' efficient, secure and fair implementation of policy control, network optimization and the pricing tricks that can result. For example, at MWC Bubley zeroed in on the possibility of a Facebook data plan, wherein an operator could implement data pricing policies that would make access to Facebook a billable (or non-billable) event--net neutrality be damned. But that scenario still requires more work, according to Bubley: "For example, none of them had a good answer for me when asked what they'd be able to do now that Facebook forces its sites to encrypted SSL. Nor did they have a good answer about whether zero-rating Facebook traffic would include web links shared by friends, which are displayed *inside* the Facebook app on a smartphone. Or what would happen if the June update of the FB app added something new, like video," Bubley wrote.

Whose profile is falling? Femtocells and off-loading data

For all the noise about the weight of data on wireless operators' networks, there was surprisingly little buzz about possible tactics to discharge traffic onto alternative transport systems. Operators by and large seem keen on building, accelerating and strengthening their licensed wireless networks--the assets they can easily control and charge for. Femtocells and Wi-Fi offload, while maintaining a sizable presence at MWC, weren't the must-see checkpoints of previous years.

Of course, that's not to say vendors and carriers are ignoring the topic--Cisco and Nokia Siemens Networks are among the vendors that have recently announced offloading products. Cisco announced its service provider Wi-Fi solution that offers an 802.11n platform with authentication to enable roaming and service delivery. And NSN introduced what it calls the Smart WLAN connectivity solution that is designed to selectively offload traffic onto Wi-Fi without any interruption in service.

And major operators like AT&T Mobility (NYSE:T) are paying attention to the space. They must. For example, Phil Marshall, head of Tolaga Research recently estimated that about 20 percent of iPhone traffic on AT&T Mobility's network is landing on the public Wi-Fi network, and it's likely that another 60 percent is landing on home Wi-Fi networks now that the operator has instituted tiered data plans. As for femtocells, AT&T recently began issuing them for free to high-value users in an attempt to mollify coverage concerns--highlighting the importance of the device in the carrier's repertoire.

But in terms of raw noise and buzz at MWC, femtocells and Wi-Fi offloading seemed to blend into the background. For example, femtocell vendors Alcatel-Lucent and ip.access said their respective femtocell products are generating interest but aren't necessarily catching fire--as some prognosticators once believed they would. And operators including MetroPCS (NYSE:PCS) and T-Mobile USA decided femtocells are worth investigating but not as subjects of imminent investment.

The same is largely true for Wi-Fi offloading: The topic made the rounds, but few operators made it a cornerstone of their marketing messages. After all, if LTE is so great, why would you want to offload traffic?

While it's unclear what role such technologies will ultimately play in evolved wireless networks--they may well carry the bulk of users' bits and bytes--it appears that carriers of today are wary of the difficult sales proposition required by femtocells and Wi-Fi offloading as well as taking focus off their primary asset--their wide-area wireless network.

Mobile World Congress 2011 Scorecard: Infrastructure