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Mobile Personalization - Data Offload Becoming More Important for Mobile Service Providers

 

May 28, 2010

By Gary Kim, Contributing Editor

 

More than 50 percent of mobile data sessions originate indoors, say researchers at the Yankee Group (News - Alert).  And since 40 percent to 60 percent of mobile operator operational expense is attributable to backhaul transmission costs, Jennifer Pigg, Yankee Group analyst, expects data offload solutions, ranging from femtocells to Wi-Fi,  to be a growing area of interest. 

Indeed, 60 carriers are in femto trials, with 13 commitments and nine commercial services already launched (AT&T, Vodafone, SFR, China Unicom, DoCoMo, SoftBank, Optimus, StarHub, Sprint (News - Alert) and Verizon).

Much has changed over the past few years, the industry remaining unsure about the need for household cells and how they would be priced, configured, installed, managed and secured. Today the standards process and manufacturing advances have lead to terminals with a small footprint and lower prices ranging from $100 to $150. 

Just as important, end users and carriers now have reasons to use the devices. Video sessions on the growing base of smartphones are growing, there are more devices that depend on Wi-Fi (iPod Touch and iPad devices, for example), meaning wireless offload provides a better experience for end users and prevents strain on carrier networks. 

The $100 unit price is an important threshold, as it is the price carrier executives have maintained was necessary to support a 'no cost to end user' deployment model.

Yankee Group projects that worldwide femtocell deployments will more than triple, from 479,000 in 2009 to 1.629 million in 2010. 'And while we are leery of hockey stick forecasts, we expect the market, impelled by the mobile data juggernaut, to sprint to 50.3 million in 2014,' says Pigg. 

Wi-Fi is also gaining momentum as a mobile network offload solution. T-Mobile was the first major carrier to offer Wi-Fi calling to its subscribers. Kineto Wireless (News - Alert) offers its 'Smart Wi-Fi' application for smartphones as part of a Smart Wi-Fi Offload solution. 

Wi-Fi's drain on handset battery life is often raised as one of the downsides to the technology, however. The Wi-Fi connection managers on today's handsets are much more intelligent about when and how often they scan for connections, making far more conservative use of the battery. 

But business issues are a factor in carrier thinking as well. When using femtocells, carriers arguably  retain control over the subscriber and be able to access more and better analytics. 

Wi-Fi doesn't provide the degree of end-to-end service management service providers would prefer to retain as well.

Carriers must also be able to seamlessly hand off data sessions from the indoor wireless solution to the outdoor network, without interrupting the service or needing to re-authorize and re-authenticate subscribers. 

But Home Location Registers (HLRs) that store mobile subscriber information are already under stress as they respond to the demands of 3G networks and the explosion in the number of mobile devices. 

Bridgewater Systems (News - Alert) says four tier one service providers in Europe, North America and Asia are currently using its new mobile data offload solution to move 3G data traffic to Wi-Fi hotspots and femtocells, Pigg says. 

The issue for broadband access providers not affiliated with the mobile service providers is whether there is any direct benefit, beyond the obvious advantage of supplying a service that is more valuable when it supports indoor use of mobile devices. 

It is not too hard to conceive of some compensation agreements being struck. That would be a clear example of a business-to-business revenue model to supplement the traditional reliance on end-user payments as the sole access provider revenue element.


Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Michael Dinan

 

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