Surging data demand, proliferation of smartphones, and the onset of high bandwidth mobile applications are revolutionising the wireless telephony space. With spectrum limited in availability, operators and vendors across the world are faced with the challenge of monetising the additional data usage among customers.
In this regard, data offloading has emerged as a key trend globally. In fact, it is at the heart of fixed mobile convergence technologies such as femtocells and dual-mode Wi-Fi, which take voice and data traffic off the carriers wide area radio access backhaul networks and moves them on to private broadband connections. So far, it has been a successful strategy with operators able to handle huge data traffic on limited infrastructure.
Driving data growth – products and services
Some of the key drivers of mobile data traffic growth include the availability of high-speed networks; increased penetration of next-generation mobile phones (especially smartphones); as well as connected devices such as laptops, netbooks, notebooks and tablets; and higher bandwidth-consuming applications and services.
The mobile broadband segment utilises four primary methods for Internet access ? USB dongles, mobile hotspots, embedded modules, and embedded chipsets, with pros and cons for each tool.
USB dongles are typically used in conjunction with notebooks and netbooks, providing flexibility for use on multiple devices. However, the arrival of media tablets and other consumer electronics with embedded Wi-Fi capability have led to the emergence of the mobile hotspot, a battery-operated device (usually mobile phone) using a 3G or 4G network as backhaul for data traffic.
In comparison, an embedded module or chipset solution incorporates mobile broadband functionality at the board level, providing the convenience of a solution that does not break, or get lost or stolen?while allowing for optimal performance of the mobile device in which the embedded solution is used.
Of the various ways to enable broadband access for consumer electronics devices, mobile hotspots and embedded chipsets are the fastest-growing methods globally, growing 25 to 50 per cent faster than the overall market. Key to their growth is the capability of mobile hotspots to combine data access for multiple devices while staying at the forefront of technology, as well as the flexibility of design, enabled by chipset solutions in devices.
In India, currently almost all telecom operators have launched their dongles on both 2G as well as 3G networks. In the initial stages, dongles are going to be the primary medium of broadband uptake in the PC segment.
Currently, mobile hotspot is a feature which is available in the high-end mobile handset category and is therefore restricted to a limited number of users.
In the case of embedded module or chipset solutions, they are new technology and will take time before being available in mass market products.
Expected capacity constraint
As per some industry estimates, in India, 3G will see 400 million connections within four years, effectively upgrading one in three wireless subscribers to 3G services. While currently, operators are expecting the highest traffic from metropolitan areas like Mumbai, Delhi and Kolkata, 3G adoption is expected to escalate faster and will soon be outstripped by upwardly mobile semi-rural reaches in states like Punjab, Bihar and Andhra Pradesh.
Some industry experts are of view that Indian operators would face a capacity crunch when the 3G services pick up on a large scale. Globally, average 3G spectrum per operator has been 10-15 MHz, while the average 3G spectrum with Indian operators is 5 MHz. However, in most of the other countries, 3G spectrum was also used for backhaul. This, however, is not the case in India as the operators have installed capacity of microwave backhaul. Hence in the short to medium term, Indian operators are not likely to face a spectrum capacity crunch.
However, in the long run, such issues may arise. In the US, mobile phone operators such as AT&T have had to face subscriber ire over the past year or so as the use of video streaming and other applications rises in tune with increasing adoption of the iPhone and other smartphones. With the network congested, instances of calls getting dropped or lost had become common in the US.
Likewise, for the Indian operator, bandwidth intensive data can congest networks. Subscribers in the cities of Mumbai and Delhi are often faced with problems of clogged lines at peak hours just with voice and SMS traffic. The limited spectrum availability (5 MHz) for data downloads will further add to subscriber woes once services gain substantial scale and traction.
Meanwhile, 3G, when being launched by operators, had promised to deliver as much as 3 Mbps speed. However, in the 5 MHz bandwidth, operators are unable to offer more than 400-500 kbps on an average. In contrast, 3G consumers in countries such as Japan and Korea got 5-6 Mbps speeds when 3G was launched. Japanese operator Softbank last year announced 3G connections with speeds of 42 Mbps.
Data, video and internet browsing services require higher bandwidth in the downlink and much less in the uplink. 3G-paired spectrum (equal speeds in both downlink and uplink) is therefore not efficiently used for data services. The spectrum in the uplink will remain largely vacant, while downlink will be strained. The 2×5 MHz spectrum holders in India will remain inherently disadvantaged when it comes to data services and thus will have a greater need to offload data traffic in the future.
Operators will aim to control subscriber behaviour using two tools, price and data limits. Yet, when network capacity starts getting exhausted, operators will have to look at offloading some amount of data traffic towards their Wi-Fi services.
Planning ahead
While it is just the beginning for 3G services in India, operators are taking every bit of safeguard to not reach a stage where they will be unable to handle the traffic.
Idea Cellular, which has launched its 3G services in 2,300 towns in 20 service areas (inclusive of roaming agreements), is witnessing around 20 per cent data growth per month. The company has been taking several steps to tackle the backhaul challenges.
It has moved its TDM microwave link to IP. In order to increase its backhaul capacity, the operator has decided to have more and more of its sites fiberised. Currently, 12-15 per cent of the company’s sites in main cities, where Idea has launched 3G, are fiberised. Idea intends to increase them to around 20 per cent in 2012, and extend its fibre network to even smaller towns. The company plans to move to an all-IP domain in the next two years, at least in the top 50-60 towns. The company is also considering a number of data offload strategies like femtocells and Wi-Fi offload. 3G repeaters are being considered for increasing Idea’s in-building coverage.
In February 2011, Aircel launched 50,000 Wi-Fi hotspots around India and has brokered partnerships with Wi-Fi specialist O-Zone Networks and wireless ISP company, Tikona Digital Networks to offer public Wi-Fi services to its subscribers. The operators has also initiated installing macro cells for 3G roll-out and intends to move to femtocells for in-building coverage. It further plans to use picocells [larger and more powerful than femtos] for addressing the enterprise segment.
Bharti Airtel too has tied up with O-Zone for setting up Wi-Fi network. It is also evaluating the use of mini base stations in its 3G and TDD LTE roll-out plans.
Indian operators providing wireless broadband in the unlicenced frequency bands (2.4 GHz and 3.8 GHz) are also expected to play an important role in the 3G data traffic offload. For instance, Tikona is planning to capitalise on the 3G offload opportunity both through its Wi-Fi offering and through the long term evolution time division duplex (LTE TDD) network it plans to deploy in India. Zylog is another player waiting for the offload opportunity, and has a Wi-Fi infrastructure that it can offer to 3G players for offloading data traffic.
The way forward
Wi-Fi is not new to India and has been deployed in enterprises, campuses and SOHO (small office/home office) sectors for several years. With the growing popularity of Wi-Fi-enabled smartphones and increasing number of Wi-Fi enabled tablets and handsets in the country, Wi-Fi has started picking up, especially in Tier I cities.
O-Zone, which offers its Wi-Fi service on a white-label basis to operators, airports, coffee shops and other retail outlets, claims it has recorded 400 per cent year-on-year growth for the past three years. Now it’s preparing for the next wave, with plans to increase its national Wi-Fi network from 5,000 to 50,000 hotspots by 2013.
Another Wi-Fi equipment specialist Ruckus Wireless Inc. has experienced a compound annual growth of 1,043 per cent in India in the past three years.
While currently the growth of Wi-Fi is being driven by increasing 3G roll-outs, further Wi-Fi use is likely to be fuelled by the launch of BWA services in 2012 and beyond, with industry experts claiming that Wi-Fi will play an integral role in the TDD-LTE roll-out plans of BWA licence-holders. Spectranet and Tikona Broadband are two other key players in the Wi-Fi space in India.
Meanwhile, Femtocells will also become popular to provide mobile operator’s network coverage inside buildings such as homes and offices.
At first, however, the use of femtocells in India will be restricted to a few metros and urban areas. Operators will be able to use femtos in urban areas and within enterprise campus/building environments initially.
A key challenge facing the development of the femto market in India is the high retail cost of end-user products. However, prices are likely to decrease as production volumes grow and vendors enjoy the resulting economies of scale. A femtocell is available for around $100, but in India it is likely to gain traction when the price comes down to $30-40.
However, from a broader perspective, mobile data offload is an inexpensive way to provide the extra capacity needed to support the expected traffic growth. The mobile operator’s only cost is that of subsidising the dual function (3G/4G and Wi-Fi) devices sold to subscribers.
For mobile subscribers mobile data offloading provides increased coverage and faster downloads, and costs less than mobile service alone. Mobile data offloading, consequently, makes residential broadband more attractive to consumers and therefore increases service stickiness and improves broadband subscribers’ willingness to pay.
