Mobile Data Offload

Can Wi-Fi Deliver?

Anjan Ghosal, CEO

January 2010

EXECUTIVE SUMMARY
Mobile Network Operators have long recognized Wi-Fi as a potential
means of adding wireless capacity by leveraging low-cost access points
and free spectrum. Wi-Fi has however been elusive as a widespread 3G
offload mechanism. An early implementation, Unlicensed Mobile Access
(UMA) – a highly touted voice offload technology, has failed to deliver on
its initial promise. One of its more prominent backers – T-Mobile in the
US – quietly pulled the plug on its “@Home” service. While a number of
reasons can be attributed to the lack of commercial success, the
primary reason is that there is no compelling business case for shifting
voice traffic to a lower cost access network. UMA had merit
conceptually, but voice is not where pain points exist.

However, the mobility space is evolving in real-time. The exponential

growth of data consumption, by today’s army of smart phone and
intelligent wireless device users, has become a game changer forcing
carriers re-look at Wi-Fi as an alternative access mechanism.

Are things going to be different this time around? Or will Wi-Fi access
again be relegated as a niche play without mass appeal? This papers
looks into some of these issues.
 Wi-Fi for Mobile Data Offload
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Mobile Data Offload – Can Wi-Fi Deliver?

It is the data, stupid!
When it comes to telecommunication services – Wi-Fi is disruptive. It lacks basic
features that we have come to expect of traditional 3G network including network
security, guaranteed quality of service and ubiquitous coverage. However, Wi-Fi
does have a couple of strong attributes. It is widely available in devices. It requires
no expensive network planning and leverages unlicensed spectrum to add capacity.

When it comes to
telecommunication
services – Wi-Fi is
Figure 1: Traffic and Revenue increase
disruptive. It lacks
basic features that we Adoption of disruptive technologies requires an extremely strong business driver
have come to expect (bordering on extreme pain!). Such a driver is present today.
of traditional 3G
network including The rapid growth of data consumption is real and has been observed by many
ubiquitous coverage operators. Here are numerous facts to substantiate this. For example,

• Vodafone has seen its data traffic grow from a trickle to a where it almost
exceeds its voice network traffic (Vodafone 2008)
• AT&T has seen a data growth of over 5000% over the past 12 quarters (John
Donavan at ATT)
• Current forecasts based on a study of MNO data expects traffic to grow by 300X
to 500X over the next 10 years (Cisco 2008)
• Independent forecasts show “six to fourteen times more data is being used on
mobile broadband networks today” than this time last year. (3G America’s
study)

The challenge for operators is that there has been a decoupling of revenue per user
from data traffic generated per user. Clearly this is a disruptive problem which may
well require a disruptive solution.

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Wi-Fi for Mobile Data Offload
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Many ways to skin the cat

Currently a number of approaches are under consideration to address the carrier’s

data problem. Traditional options, like scaling network capacity with additional
network equipment, are available. Optimizing the carrier’s data pipe to increase
overall throughput is being explored. Other innovative solutions like data throttling
using policy control functions – used to ‘punish’ the most severe data users are also
being discussed. Of course, LTE is also being proposed as the ‘cure all’ for data
congested networks.

However all of these proposed solutions have their limitations. Scaling network
capacity using traditional means is an expensive value proposition – at a time when
data revenue has flattened out compared to data usage. Data optimization has
theoretical limits as to how much data can be compressed. Data throttling is likely
to alienate a section of subscribers that are singled out. Finally 3G was supposed to
solve the carriers’ data flow problems. Ironically, it has only made matters worse as
the data usage has been growing exponentially, and the networks have not been
able to cope with it.

Considering all the above, a Wi-Fi based data offload has some key advantages.
Studies have shown that expanding networks using Wi-Fi is significantly less
expensive compared to a network build out. Even the FemtoForum – a strong
proponent of using licensed spectrum to alleviate the data problem – has in a
recent study stated that “Wi-Fi is a strong driver in the data market today.” Given
the urgency with which data capacity is required, Wi-Fi offers “time-to-capacity”
advantages that can’t be matched by building out cellular capacity. And the
availability of spectrum is often the limiting factor for mobile operators, Wi-Fi
allows data traffic to be shifted off of expensive, licensed cellular bands to exploit
the 2.4GHZ and 5.xGHz unlicensed bands.

So it is very likely that carriers will have to use all tools that are available in their
arsenal and bring them to bear on this issue – and Wi-Fi will be a core part of this
strategy.

Lessons from History

Over the past 10 years, there has been a significant amount of effort around
developing offload solutions using Wi-Fi technology. The most prominent among
them being Unlicensed Mobile Access (UMA) – a technology specifically designed for
integrating Wi-Fi with the carrier’s core network – primarily to deliver voice traffic.

In spite of the significant amount of effort put into standardizing this technology,
and a number of reincarnations of this technology, it has been a commercial
failure. Most detractors are quick to point to this as evidence that Wi-Fi offload is a
failed strategy. T-Mobile USA, one of its largest backers has quietly pulled the plug
on its “@Home” service.

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Wi-Fi for Mobile Data Offload
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However, that would be a rush to judgment. To understand why things are different
now it is important to review the reasons for its lack of success and why those
factors may be different this time around.

Figure 2 : UMA Evolution

1. Lack of a ‘disruptive’ driver: The key driver for UMA was improved voice
coverage inside the home – hardly a strong enough business case. Data is a
much bigger issue for the carriers today and provides a real incentive for them
to adopt Wi-Fi.

2. User experience: Wi-Fi a natural fit for data offload. Today millions of
subscribers are already using Wi-Fi as their primary source for data/internet
access. Wi-Fi offload preserves this experience.

3. Device support: One of the major impediments for mass adoption of UMA has
been the lack of handset support. Requiring device manufacturers to embed
client software in their handsets has been an uphill battle for many promising
start ups

4. Carrier approach to Wi-Fi: Until about a year ago, carriers viewed Wi-Fi as a
threat to their networks. That has changed and carriers today have embraced
Wi-Fi as a part of their network – making them more open to adopting Wi-Fi
based approaches.

5. Lack of marketing focus: Discussions with a number of carriers have revealed

that due to internal ambivalence about Wi-Fi – the marketing efforts to
promote this solution has been limited – leading to further lack of interest from
the customers.

While some of these issues do not exist in the case of data offload, most of the
others are addressable if we are willing to learn from history.

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Shut up and listen to the customer!

Our industry is notorious for delivering solutions to problems that don’t exist! While
some of it may be warranted (let us call it ‘being ahead of the times’) others simply
are due to lack of understanding regarding the customer’s true requirements.

While some vendors continue to re-spin their old technology to force fit the ‘latest
buzz’, it is worthwhile to look at data offload from the operator’s perspective.
Based on our conversations with a number of carriers, we can divide the industry
into three distinct offload categories based on factors such as their specific network
consideration and customer profile:

1. Network bypass
2. Managed network bypass
3. Integrated data offload

Network Bypass
Network bypass is the process of taking mobile subscribers in Wi-Fi range and
transparently moving their data onto the Wi-Fi network – in the process completely
bypassing the core network for data access (voice continues to be delivered via the
core network). This can be achieved by putting a small application on the
subscriber’s device that detects when they are in a Wi-Fi area and automatically
moves all data access to that network. It does not require that any additional
network equipment be installed.

Corporate VPN,
GGSN Blackberry, SAP,
Oracle
GGSN
SGSN
SGSN
SGSN
GGSN
Ringtones, Games,
2G/3G MediaNet, MobiTV,
RAN Mobile Email,
Answer Tones

www
Internet access

Wi-Fi
Access

Figure 3 : Network Bypass

However it has two major drawbacks. First, the carrier loses visibility and control of
their subscriber while they are in the Wi-Fi area. This will prevent the carrier from
billing for usage (if they have a metered service like in some countries) or providing
any other features that they generally provide to their customers on their 3G
networks. Second, since there is no connectivity between the core network and the
device, the carrier is unable to deliver any 3G content leading to potential loss of

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Wi-Fi for Mobile Data Offload
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revenue. In spite of these drawbacks, some carriers have opted to deploy such a
solution as an immediate work around to their network overload problem –
especially since they are reasonably easy to deploy. But that is just a stop gap and
in the longer term they will have to enhance their solution to move to one of the
next two offerings.

Managed Network Bypass

The next levels of carriers are those that are uncomfortable with this level of
desegregation of the two networks and the resulting loss of subscriber control. That
could be for multiple reasons. Some carriers provide metered network access which
requires subscriber control. Others deliver services, like parental control/filtering,
that they are not able to provide in a completely desegregated network. Others
insist on secure access for their subscribers when they are accessing internet
services via Wi-Fi. And finally others simply want to be aware of subscribers
browsing habits for targeted marketing or security reasons. This solution can be
delivered without having to fully integrate the two networks. However, while this
solution does allow the carrier to ‘manage’ their subscribers, it still prevents them
from delivering any carrier subscribed content is in the Wi-Fi zone (a rather
irritating user experience for some!). Nevertheless, it does solve the issue of data
overload and may work well for some carriers that do not have any significant
walled garden content to deliver.

Corporate VPN,
GGSN Blackberry, SAP,
Oracle
GGSN
SGSN
SGSN
SGSN
GGSN
Ringtones, Games,
2G/3G MediaNet, MobiTV,
RAN Mobile Email,
Answer Tones

T
T
SECURE G
TUNNEL
www
Internet access

Figure 4 : Managed Network Bypass

Integrated Data Offload

The final set of carriers insist on full integration of their core and Wi-Fi networks to
provide a completely seamless experience to their subscribers when they move
between the two networks. They want to not only manage the customer but also
want to be able to deliver all carrier subscribed content to the subscriber while
they are in the Wi-Fi network. These carriers tend to have a significant amount of
content available to them via their 3G network (e.g. IP. TV. etc.). This is only
possible when a ‘bridge’ is established between the two networks through which
data flow can be established between the two networks.

www.intellinet-tech.com
 Wi-Fi for Mobile Data Offload
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The battle to get
carriers to take a
second look at Wi-Fi
as an access mechanism
has been won
Corporate VPN,
GGSN Blackberry, SAP,
Oracle
GGSN
SGSN
SGSN
SGSN
GGSN
Ringtones, Games,
2G/3G MediaNet, MobiTV,
RAN Mobile Email,
Answer Tones
T
T
SECURE G
TUNNEL
www
Internet access
Wi-Fi
Access
Figure 5 : Integrated Network Offload
As can be seen from these three cases, the solution that has to be applied will to a
large extent depend on the carrier, their service profile as well as their customer’s
usage habits.
Winning the battle …
The first salvo in the data bypass battle has already been fired. With the release of
the iPhone 3.0 version software – AT&T hotspots automatically detect their
subscribers and move their data traffic to Wi-Fi. The whole process is completely
transparent to the subscriber and they do not notice any difference (unless of
course they try to access any AT&T delivered services which is not available any
more!). Initial results are very promising. AT&T has seen a dramatic increase in the
number of connections from their hotspots from 19.7m in 2008, growing over 400%
to 86.2m connections in 2009.
Another strong signal from the carriers has been their recent M&A and partnership
activities. AT&T – with the purchase of Wayport and Verizon with a partnership with
Boingo have sent a clear message to the market that henceforth Wi-Fi will form an
integral part of their network growth strategy. Of note is that this is not simply a US
phenomenon. In the UK, O2 has signed roaming agreements with both The Cloud
and BT, giving their iPhone subscribers the ability to roam onto 3rd-party hot spots.
The battle to get carriers to take a second look at Wi-Fi as an access mechanism has
been won.
.. but how about the War ?
Wi-Fi has a second wind when it comes to an alternative carrier network access.
This time around it also comes with a much stronger value proposition for the
carrier as well as significant support from the carriers themselves. However, further
effort is required to win the war.
www.intellinet-tech.com
 Wi-Fi for Mobile Data Offload
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The vendors must
invest the time and
effort to understand a
carrier’s specific drivers
and motivations for
data offload
The vendors must invest the time and effort to understand a carrier’s specific
drivers and motivations for data offload and provide a solution that fits their needs
instead of the other way. In this case one size may not fit all!
The 3GPP standard of I-WLAN offers a compelling technology solution for
integrating Wi-Fi networks with cellular networks. I-WLAN defines the
underpinnings for managing the Wi-Fi in an integrated data offload scenario for the
mobile network operator.
There are other lingering technical issues as well. Battery life for “always on” Wi-Fi
handsets cannot be overlooked. This has improved with progressive designs and
approaches from the Wi-Fi alliance. More work needs to be done to enable seamless
login/authentication for mobile subscribers in public Wi-Fi Networks. Efforts,
undertaken by Devicescape and the WISPr standards in this regard, are
commendable. Mobility standards are yet to be widely accepted to allow
transparent movement of devices between the two networks though MOBIKE
working group is actively engaged to try to solve this.
If some of these issues can be resolved, Wi-Fi is likely to be a ‘disruptive’
technology that rapidly moves mainstream.
IntelliNet Solutions for Data Offload
IntelliNet Technologies offers a portfolio of interworking WLAN products. These
include the IWLAN server which can support the 3GPP modes of a TTG and PDG.
IntelliNet provides the interworking elements for supporting authentication with its
AAA server. The IWLAN set also includes a Voice Call Continuity Server for
supporting voice applications.
IntelliNet also enables offload through femtocells with its Femtocell Gateway. Both
solutions are available on an Advanced TCA platform and can also be hosted on an
OEM platform.
About IntelliNet Technologies
Headquartered in Melbourne, Florida with offices in Bangalore, India, IntelliNet
Technologies is a leading provider of next-generation network convergence and
application development solutions for PSTN, cellular, wireless and IP Multimedia
Subsystem (IMS) networks. Major equipment vendors, application developers and
global operators currently use IntelliNet’s products for prepaid, location services,
messaging and fixed mobile convergence. For more information please visit:
http://www.intellinet-tech.com
www.intellinet-tech.com