Beyond the 4G Slogan, is WiFi a Necessary Evil or a True Opportunity for Mobile Operators?
• Few operators will spend the billions required to deploy 4G despite many areas suffering with poor coverage and network saturation due to high density of users.
• Broadband will continue to be deployed providing high speed services, using fibre optics or satellite.
• WiFi remains the cheapest mobile broadband access solution for travellers.
The iPhone revolutionised the mobile market and instigated a major shift towards mobile data consumption. In fact, a recent survey predicts that mobile data traffic will reach 16.84 million terabytes by 2014 but 3G was never designed to handle this level of data traffic.
Mobile operators are therefore seeking an alternative to 3G and are looking for capital to invest in 4G spectrum and the associated transformation of their infrastructure (more than 10 billion USD was invested in 2012*); the 4G war was started by few leading companies with disputes around patents and new contracts for subscribers as operators look to increase ARPU (Average Revenue Per User). However, some operators intend to manage the impact of this growth primarily through new pricing strategies and WiFi-based offload solutions; some operators have already offloaded 50% of their data traffic onto WiFi networks.
In 2012, Trustive integrated a further 200,000 premium WiFi hotspots into its own network, bringing the network total to 500,000 WiFi hotspots in 130 countries.
A recent Wireless Broadband Alliance (WBA) survey revealed that mobile data growth is a key factor in the build-out of WiFi hotspots and predicted that the number of WiFi hotspots set to more than triple from 1.3 million in 2011 to 5.8 million by 2015, marking a 350 percent increase. The growth in WiFi hotspots will primarily be in locations such as: Outdoor, urban hot zones, popular tourist attractions (museums, attraction parks), transportation hubs, events (stadiums) and supermarkets.
As billions will be spent on obtaining and retaining domestic customers, there is some doubt about how closely operators will cooperate in order to provide competitive data plans for 3G or 4G access for commuters during their international travels. According to the aforementioned WBA report, there are 340 million roaming trips per year and people now use up to 3 devices (versus 1 device previously), mainly smartphones, notebooks and tablets.
Trustive records a clear split in usage: laptops/notebooks 50%, smartphones 45% & tablets 5%.
The need for high speed mobile internet access is exploding but, when travelling abroad, commuters are advised by their mobile operators to turn off data roaming on their smartphones and tablets.
However, commuters still want and need to access their favourite applications in order to stay in touch with colleagues, friends and family. Applications such as Skype and Fring can offer travellers significant savings compared to the cost of paying to make and receive calls and messages via a domestic mobile operator for example. Commuters also want to share photos and videos with their social networks in real-time and to be able to access their e-mails at a reasonable cost.
If 3G data roaming services are restricted or impractical, then travellers will naturally turn to a familiar alternative that is viable: WiFi.
The number of commuters who make use of WiFi currently numbers just a few hundred thousand and the average length of a Trustive WiFi session in 2012 was around 50 minutes. Whilst the average data exchange was 70MB per WiFi session, the heaviest sessions involved data exchanges of 12GB to 14GB. Whilst extreme by current standards, Trustive considers such sessions to be indicative of how the users’ growing appetite for data consumption will transform WiFi in the future.
OTT and other leading internet companies understand the importance of mobile broadband for their future survival and growth and it is for this reason that Google, Facebook, Skype and others are making strategic movements into this arena. Based on Trustive’s experience of working with some of these players, there is no doubt that they are very serious about responding to commuters’ need to stay connected. However, operators are still missing a significant opportunity to extend their mobile offering. By responding to customer demand and adding WiFi roaming capabilities to their portfolio, operators would be monetizing the opportunity that exists within the WiFi ecosystem and retaining customer loyalty.
Unfortunately, signing and implementing WiFi roaming agreements is not always as simple as it should be for operators, due to a lack of common understanding of the associated technical specifications and the complex processes, interfaces, internal organisations and subcommittees (etc.) employed by operators to reach, implement and manage multiple roaming agreements.
For internet experts, the “RADIUS world” is pretty simple, with an architecture that allows for fast integration and implementation; new inter-connects can be up and running within a few weeks or months even. However, due to the above-mentioned complexities, this same inter-connect process may take years for some operators.
In order to integrate WiFi roaming capabilities into a global plan, operators should consider:
- connection software / applications to provide seamless access
- network integration
- billing & settlement systems
By taking care of the above elements and improving backend systems to achieve smooth interoperability with the WiFi carrier and maximise cost control, operators can ensure that they provide a seamless, user-friendly service that commuters will come to rely on.
In conclusion, commuters have already expressed a clear need for high-speed, low-cost mobile internet access and their appetite for data consumption is only going to increase in the coming years. International WiFi networks, like Trustive’s, can fulfil this need and be employed by mobile operators to complement and complete their 3G/4G deployments, alleviate existing 3G network saturation issues as well as offer a means of proactively managing commuters’ accelerating data consumption in the years to come, and thereby support the 340 million roaming trips made each year.