As Wi-Fi networks edge closer to becoming extensions of mobile networks, two vendor worlds are colliding, leaving companies scrambling to become experts in both the WLAN and radio access network (RAN) worlds.
Tolaga Research's Marshall (pictured) predicts that mobile traffic over Wi-Fi is only going to grow.
The buzzword these days is carrier-grade Wi-Fi--the ability for a network operator to essentially treat Wi-Fi as another element of the mobile network with the ability to gain visibility into the Wi-Fi network and apply the same management functionality such as authentication that is used into mobile networks today.
"One of the major challenges with Wi-Fi is the fact that the radio isn't managed as well as a 3G or 4G network," said Phil Marshall, head of Tolaga Research. "A lot of mobile traffic is being done over Wi-Fi, and it's only going to grow. Operators have to do something about it."
What are the operators doing?
The major U.S. operators have embraced Wi-Fi, but they have yet to implement the management functionality that would make Wi-Fi an extension of their networks. It's simply not available yet, but pressure is mounting. AT&T (NYSE:T) recently announced that the number of connections on its Wi-Fi network nearly tripled year-over-year in the third quarter to 301.9 million. The company said that the amount of data on its Wi-Fi network in the quarter more than doubled from the third-quarter 2010. AT&T also reported that users are now making around 100 million Wi-Fi connections per month.
Verizon Wireless (NYSE:VZ) committed earlier this year to using Wi-Fi offloading techniques to handle increased data traffic on its EV-DO and LTE networks in homes, as well as crowded hotspots such as hotels, airports and stadiums. Wi-Fi connectivity firm iPass said that company research indicated MetroPCS (NASDAQ:PCS) may be offloading as much as 20 percent of its cellular traffic onto Wi-Fi networks. Sprint Nextel (NYSE:S) has also added Wi-Fi offloading to its repertoire of network management tools this quarter.
Vendors take different strategies
Vendors of all types are gearing up for carrier-grade Wi-Fi but many of them are still amassing the pieces. "It's challenging for vendors because Wi-Fi is something that has the potential to cannibalize the traditional business if it's not really managed well," Marshall said. "It has a whole ecosystem around it with consumer electronics and high volumes. It's a different market for operators. If you put both in the box, you take away the debate."
Japan's KDDI will deploy more than 10,000 Ruckus Wi-Fi access points (pictured).
WLAN vendor Ruckus Wireless has gained early traction in the carrier-grade Wi-Fi market through a massive deal with Japan's KDDI, which is deploying more than 10,000 Ruckus Wi-Fi access points initially in more than 7,000 venues throughout Japan. The company will enable 3G CDMA Android phone users to automatically access and be authenticated to KDDI Wi-Fi hotspots using credentials embedded within each phone over encrypted connections. KDDI plans to offer Wi-Fi in 100,000 locations by March and 120,000 locations by June.
But what the vendor is missing at this point is the carrier core piece, said Peter Jarich, service director with Current Analysis. He believes all vendors in the carrier-grade Wi-Fi space will need a comprehensive solution that includes both the RAN and the core network.
David Callisch, vice president of marketing with Ruckus Wireless, said the vendor will unveil a functional wireless services gateway that will interface with a mobile core network at the Mobile World Congress in February. The vendor announced the idea of the mobile gateway earlier this year.
"We believe there is a need for a new kind of edge device," Callisch said. "We have the radio piece with the smart antennas that get us to the table, but operators need something to aggregate, tunnel and process that traffic at the edge. The wireless services gateway is that device that will interface with the backend systems to integrate Wi-Fi as a radio access technology into the network so that it looks and feels like 4G traffic."
The key is being able to control sessions and make intelligent decisions about policy and billing while integrating that into the existing mobile network subscriber management, policy management and other gateway functions. In essence, it is a marriage between a wireless access gateway and a WLAN controller.
Callisch said Ruckus is currently trialing the solution with some European and domestic mobile operators.
Is RAN the solution?
Meanwhile, Alvarion, which has made its mark in the WiMAX world, is approaching the carrier-grade Wi-Fi market from the RAN direction. The company last week announced plans to purchase Wavion for approximately $30 million in cash, including an assumed earn-out. Alvarion plans to leverage Wavion to provide carrier-grade Wi-Fi solutions and combine Wavion's Wi-Fi platform with its RAN solution. The company recently acquired DAS (distributed antenna systems) capabilities to create a full suite of capacity and coverage solutions. Alvarion also recently introduced its BreezeCELL indoor capacity solution, based on TrueActive DAS technology, which it acquired after purchasing Clariton Networks' IP-related assets earlier this year.
"We have a strategy of moving the company toward a multi-technology, software-defined-radio world," said Mo Shakouri, Alvarion's vice president of innovation and marketing. "Our RAN experience is an advantage because we can bring Wi-Fi into the carrier-grade world, which is very different from the standard Wi-Fi vendor market."
Shakouri noted that Alvarion now has 70 commercial deployments of WiMAX in Africa alone, which means the company already has a base of customers that might be interested in the offloading solution, but it will also target major operators aiming for Wi-Fi offload solutions and vertical markets such as the enterprise.
Alvarion is missing the core network element piece, but Shakouri said the company is working on management software and will partner with gateway providers to come to market with solutions for the various markets the company is targeting.
Ericsson and Nokia Siemens Networks have also embraced Wi-Fi offload, announcing solutions of their own, but have yet to announce any traction with them.
At any rate, carrier Wi-Fi is expected to drive acquisitions and partnerships in 2012 as both Wi-Fi vendors and RAN vendors look to add the critical pieces to make a suite of solutions. According to Maravedis, the market should grow at least 40 percent annually to about $500 million during the next several years.