Should operators go virtual for carrier WiFi?

Carrier WiFi is still a tiny fragment of overall WiFi usage. Could there be quicker ways to get "carrier WiFi" to market without carriers investing in infrastructure and control technologies such as ANDSF?

Yesterday’s news that Deutsche Telekom will join the likes of BT and Belgacom in using FON’s technology to open was a further reminder that carriers are looking to expand the reach of their carrier WiFi assets.

FON is great for expanding reach, in theory, although there are questions about how opening up what are mainly residential femtocells to other users of the FON service actually helps. (For instance, I am a FON customer for BT. The number of times I see FON hotspots when I am out and about in central London is relatively small.)

But good though FON is for expanding reach, it doesn’t offer the operator a huge amount of control over quality of experience. What if access to free public WiFi could be added to visibility into the quality of the hotspot, compared to prevailing cellular conditions in that location, and then the user connected to the best-fit access network accordingly?

This would enable operators to benefit from WiFi offload, whilst also helping their customers have a decent experience if WiFi is not the best thing for that at that moment.

One company that is building a “virtual WiFi network” is Devicescape. Put simply, Devicescape signs up users and then every time these users use an open, free hotspots, their device reports the location of that hotspot to Devicescape, which adds it to its list.

Devicescape now has 12 million hotspots in its database, with 11 million of those in the USA. Its database and client sit behind the Microsoft’s Datasense service that Verizon has exclusively licensed in the USA. Its target is to have 100 million hotspots mapped by 21017.

What makes this more than just a database of open WLAN access points is that Devicescape also measures the quality of the hotspots themselves via its device client. It then gives operators a classification of the hotspots on its map. An operator can then make those hotspots known to their users based on policy. One operator might choose to always offload a customer wherever there is WiFi. Another might choose only to connect customers automatically only above a certain quality threshold.

It’s worth pointing out that Devicescape is not the only company building long lists of WiFi access points, analysing them and curating that for operators. WeFi claims already to have over 150 million hotspots in its database and counts TimeWarner as a recent customer. WeFi adds an ANDSF client-server capability to its operator-facing offering. The WeANDSF platform is intended to enable a policy-based connection decision.

So what value is there in a curated WiFi network of public access WiFi spots of differing quality to a mobile operator? Well, Devicescape has modelled actual data from San Francisco. Here, it said that for an area with 62 macro base stations, by investing in 102 additional small cells the operators could move its capacity up from 178TB per month to 250 TB. Yet by accessing the 27,000 hotspots within Devicescape’s curated network (currently supporting 100k indivudal user sessions a day), an operator could support a 75x growth in capacity.

Informa’s report found that although there is currently very little carrier WiFi, “that doesn’t mean that users don’t appreciate it when it’s there”.

So as well as the implied pure offload model, if operators can integrate WiFi into the network in a managed way, it helps them economically. At the moment, unmanaged WiFi is viewed as dilutive of data ARPUs. Although WiFi offload can defray the necessary network investment required to support data traffic growth, it also means the operator “loses” the customer, and therefore revenues.

Mobidia, which provides a data analysis tool called My Data Manager, commissioned a recent report from Informa Telecoms & Media, “Understanding the Role of Managed Public Wi-Fi”, that looked at just this. The report found that revenue per Mb over China Mobile’s cellular network stood at $0.0489 in 2012. The equivalent for WiFi was $0.0004 – or virtually free.

Could carrier WiFi, directly owned or otherwise, help? In fact, Informa’s report found that although there is currently very little carrier WiFi, “that doesn’t mean that users don’t appreciate it when it’s there”. The deployment of carrier WiFi, with its managed/automated log-on and improved quality of service, increases the value of that WiFi to the user.

An operator could offer “connectivity” as part of an overall data plan and then manage whether a session needs to go through their cellular network and core network processes or could be offloaded. It can then monetise WiFi assets as part of an overall data strategy, rather than see data revenues “leak” when users leave the carrier to move to WiFi. In other words, a user pays for data, and WiFi usage isn’t seen as penalising the operator financially.

The question for operators is, which is of more value to them: a user on “free” WiFi, therefore offloading data that the operator doesn’t have to invest in a network to support, or a user on LTE that is “paying” for the data, but hooked into billing and other core platforms that the operator must then invest in to support growing usage.

One thing that can help them weigh up that balance is more knowledge about where users are, what apps they are using, and how much. They have help here, from the likes of Devicescape, WeFi and Mobidia.

Mobidia’s tool acts in two ways. As a consumer app, it serves to inform the user of what data they have used, which apps are using the most data, and how much of their allowance they have left. On the other end, the company anonymises the data and provides it as usage information to mobile operators.

Nigel Pollard, EMEA Sales Director for Mobidia, said that the company is generating great interest from operators who need visibility into user data so that they can better plan their network rollouts.

Another, complementary approach to their deploying and owning their own infrastructure, is to leverage the access points that are already deployed, but with visibility into the quality of those access points. That is what companies such as Devicescape are trying to offer.

(*Clearly, getting users signed up is key to any crowd-sourced database. Devicescape’s approach is to incentivise both users and venue owners to sign up through a proximity marketing service called PopWiFi. At Mobile World Congress it was demonstrating an Andoird app called Magnifi WiF that rewarded users who downloaded the app with a coupon offering a free drink from the WiFi venue owner. This was actually working with live bars in Barcelona during the show. Users with the client that walk into a venue that is not on Devicescape’s database will be prompted to let the owner know he could sign up, and benefit. Users that do not have Devicescape’s app but walk into a venue that is signed up for the reward programme were prompted to sign up.)