China Mobile’s latest network traffic data provides an insight into the growing importance of Wi-Fi to MNOs.
In the first half of 2012, only 31.4% of China Mobile’s data traffic was carried over the traditional cellular network, according to figures recently published by the mobile network operator (MNO). This is a significant increase from 2010, when Wi-Fi accounted for only about 19% of China Mobile’s data traffic (see Figure 1). The majority of the operator’s data traffic is now carried via WLAN connections.
Figure 1: China Mobile’s wireless data traffic by network type, 2010–1H 2012 [Source: China Mobile, Analysys Mason, 2012]1
1 The 2010 figure is an estimate based on China Mobile reports.
China Mobile may be something of a special case. The MNO has adopted an unorthodox 3G standard, TD-SCDMA, which is not used elsewhere in the world. Support for this standard is limited to Chinese handset manufacturers, so economies of scale cannot be fully realised. Consequently, China Mobile has invested heavily in Wi-Fi, rolling out more than 1 million hotspots in major Chinese cities, to provide support for a wider range of devices – such as Apple’s iPhone. Nevertheless, the impact of investing in Wi-Fi on data traffic carriage patterns is clear.
Many MNOs worldwide are using Wi-Fi to help manage the growing data demand, despite its challenges
Wi-Fi is becoming an increasingly important element of mobile operators’ infrastructure plans, thanks to technological advancements that make it an increasingly attractive option for offloading the rapidly growing volume of data traffic. Many leading MNOs outside China are investing heavily in Wi-Fi to help relieve pressure on their macro cellular networks – for example, AT&T in the USA, SoftBank in Japan and Telefónica UK.
The MNOs’ ultimate goal should be a ‘carrier-class’ Wi-Fi deployment – that is, a network that delivers a user experience comparable to that of the macrocell network. Such a service can be used as a competitive differentiator, and should also encourage usage, which would optimise the degree of data offload.
Few Wi-Fi networks currently meet these aims. The factors that make Wi-Fi so attractive to MNOs also present challenges. For example, it operates in licence-exempt industrial, scientific and medical (ISM) spectrum, which means it is relatively inexpensive to use, but it is also becoming crowded. The spectrum is also used by appliances such as microwave ovens and baby-monitors, as well as an increasingly wide variety of smartphones and other Wi-Fi enabled devices. The operation of multiple devices in close proximity to one another can cause congestion and interference, which can degrade the user experience and leave subscribers with a negative view of MNOs’ Wi-Fi services.
In addition, subscribers may experience difficulties in identifying and connecting to MNOs’ Wi-Fi networks, because of the complexity of the connection procedure. As a result, an operator could investment in thousands, or hundreds of thousands, of Wi-Fi hotspots, but fail to meet user expectations in terms of service quality.
Operators will need to implement a suite of solutions to create truly ‘carrier-class’ Wi-Fi
Fortunately, Wi-Fi technology is beginning to evolve to address these issues, and this is generating renewed interest in the technology from an even wider group of MNOs. Operators will need to implement a suite of solutions to enable a ‘cellular-like’ user experience on Wi-Fi networks, all while dealing with the broader physical challenges and strategy issues of deploying another network layer. A carrier-class Wi-Fi roll-out is likely to include:
- implementation of the Wi-Fi Alliance’s (WFA’s) Passpoint framework and the Access Network Discovery and Selection Function (ANDSF), to facilitate connection to the network
- use of higher-frequency ISM spectrum, to avoid the congestion in the crowded low-frequency band.
MNOs will need to have a carrier-class network if they eventually make the strategic decision to monetise their Wi-Fi service. Presently, this is almost impossible to do because established deployments of the technology do not provide a reliable, seamless and secure user experience. By enhancing the service to address those shortcomings, operators will have the necessary pieces in place to justify charging subscribers (directly or indirectly) to use hotspots. The ongoing decline in mobile ARPU rates in many countries provides a strong incentive for MNOs to invest in a Wi-Fi network that they can monetise. Those that are aware of what is necessary to create a carrier-class Wi-Fi service are likely to have a distinct advantage over their competitors.
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