Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi
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Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi

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WBA report on how Next Generation Hotspot moves Wi-Fi to the heart of the carrier network

WBA report on how Next Generation Hotspot moves Wi-Fi to the heart of the carrier network

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    Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Document Transcript

    • Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Next Generation Hotspot moves Wi-Fi to the heart of the carrier network Source: WBA - Maravedis-Rethink, Nov. 2013 Author: Caroline Gabriel , Maravedis-Rethink Issue date: 18 November 2013 Version: 1.0 Document status: FINAL
    • Contents Executive Summary ................................................................................................................... 2 Interview with JR Wilson, chairman of the WBA ..................................................................... 4 1. WBA Milestones and Achievements ........................................................................... 8 2. An Overview of WBA Member Companies ............................................................... 10 3. Today’s Public Wi-Fi Ecosystem............................................................................... 13 4. The Business Landscape of Public Wi-Fi to 2018 ................................................... 21 5. Wi-Fi Ecosystem Survey and Analysis ..................................................................... 30 Figure 1-1: Figure 1-2 Figure 1-1 Figure 2-1 Figure 2-2 Figure 4-1 Figure 7-1 Figure 7-2 Figure 7-3 Figure 7-4 Figure 7-5 Figure 7-6 Figure 7-7 Figure 1-1 Figure 1-2 Figure 1-3 Figure 2-1 Figure 2-2 Figure 3-1 Figure 4-1 Figure 4-2 Figure 4-3 Figure 5-1 Figure 5-2 Figure 5-3 Member Companies by Category as of 31 October 2013 .................................................................................. 10 WBA Members as of 31 October 2013 .............................................................................................................. 12 Projected data traffic increase over wireless networks to 2018 (consensus forecasts including MaravedisRethink, Cisco VNI, Ericsson) ............................................................................................................................ 14 % of new mobile data capacity MNOs expect to gain from various techniques in 2013 and 2018 (source: Maravedis-Rethink operator survey) .................................................................................................................. 15 Changes in attitudes to public Wi-Fi Source WBA/MaRe survey October 2013 ................................................ 16 Currently available Wi-Fi spectrum in 5GHz, and new channels proposed by US and Europe ......................... 19 Deployment of new carrier-grade Wi-Fi hotspots by MNOs and MSOs 2012-2018 ........................................... 25 Installed base of carrier-grade hotspots by region 2018 (Exc homespots) ........................................................ 26 Deployment of Wi-Fi hotspots by operator type 2012- 2018 .............................................................................. 27 Ownership of carriers’ hotspots by 2018. ........................................................................................................... 28 Deployment of community hotspots 2012-2018 ................................................................................................. 29 What is your company’s primary area of business?........................................................................................... 30 How your attitude towards public Wi-Fi in your network changed over the last 12 months?.............................. 31 What do you consider to be the main driver for investing in NGH-compliant networks? (Please rank your top three, 1 being most important and 3 being least important)? ....................................................................... 32 When do you plan to deploy an NGH compliant network? ................................................................................. 33 What do you perceive as the main obstacles to deploying an NGH compliant network? (Please rank your top three, 1 being most important)? ................................................................................................................... 34 Which Wi-Fi venue do you expect to see the greatest growth in traffic demand in the next 12 months?........... 35 In order of priority, how do you believe Wi-Fi network neutral discovery & selection should be managed? ...... 36 What will be the most important factor to consider when managing connection decisions between Wi-Fi and other access networks? .............................................................................................................................. 37 Are you implementing Wi-Fi monetization strategies? If so, which ones? (multiple responses are allowed) ..... 38 What do you see as the key challenges faced by mobile operators if they are to deploy and monetize seamless Wi-Fi services? .................................................................................................................................. 39 If you do have any plans to include carrier-grade Wi-Fi services into your portfolio can you explain why? ....... 40 What do you consider to be the THREE most significant barriers to a wider implementation of Wi-Fi roaming? ............................................................................................................................................................ 41 Are further developments in back end systems (billing, reconciliation etc.) required for effective roaming? if so, please specify .............................................................................................................................................. 42 What would be your preferred means of building a Wi-Fi footprint (multiple responses are allowed)? .............. 43 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Executive Summary A quote from JR Wilson, chairman of the Wireless Broadband Alliance (WBA), sums up the new role that public Wi-Fi is taking in the lives of carriers, hotspot owners and consumers. “The biggest change will be one that people won’t even realize has happened – a whole new customer experience enabled by ubiquitous mobile broadband access.” Operators of all kinds – fixed, mobile, converged and pure-play Wi-Fi – are moving beyond using Wi-Fi just for convenient access, or data offload, and are making it a central part of their broader strategies to support a high quality broadband experience everywhere. Indeed, one of the most striking differences in the WBA’s annual report in 2013, compared to the previous year’s, is that the emphasis on customer experience and value has strengthened markedly. This change of perception is being driven by technologies which enable public Wi-Fi to be integrated far more seamlessly with other networks such as 3G/4G, fiber and cable. The WBA’s Next Generation Hotspot initiative on the infrastructure side, complemented by the Wi-Fi Alliance’s Passpoint™ program for devices, is a critical element, as are open roaming platforms. In a survey of about 200 Wi-Fi ecosystem players, conducted by Maravedis-Rethink, it was clear that such initiatives were helping create increased optimism about public Wi-Fi, with 52% feeling more confident about investing than they did a year ago. More than three-quarters were aware of NGH. The key driver for investing in NGH is to ease offload from cellular networks, generating revenues for hotspot owners and savings for MNOs. Close behind comes the need to increase customer satisfaction in order to reduce churn from operators of all kinds. However, there are challenges which have slowed some players’ roll-out plans since last year’s study. These include lack of clear ROI, cited by 44%, overall cost (42%) and device availability. Drilling down on those results, some interesting key findings emerged: • For mobile operators, there is a particular need to focus on public Wi-Fi as their cellular capacity is stretched by the explosion in data usage. Tier one MNOs expect 22% of the capacity they add in 2013 to come from public Wi-Fi and by 2018, 75% of their small cells will have integrated Wi-Fi. There is also a major upturn in Wi-Fi usage by wireline carriers such as the US ‘Cable Wi-Fi’ consortium. • The deployment of hotspots will gather pace to meet all these requirements, whether by carriers themselves, specialists or wholesalers. Roll-out by carriers themselves will rise at CAGR of 13% between 2012 and 2018 to reach 10.5m in the last year of that period, with the Asia-Pacific region accounting for the largest percentage – 55% of the global base in 2018. Combined with other hotspot deployments, the total installed base will reach over 55m in 2018. Homespots, residential access points where some capacity is left open for the community, will also be a key trend, and their base is likely to top 100m by the end of 2018. • As well as the type of company investing in hotspots, the venues will also become more varied. A year ago, the main source of traffic growth over the coming year was expected to be outdoor hotzones, which were picked out by 46%. By contrast, this year’s survey predicts that shopping malls and stadiums will be the main generators of demand growth as very large-scale Wi-Fi and roaming technologies evolve. • When respondents discussed barriers to their public Wi-Fi deployment plans, they generally focused more on business model uncertainty than technology issues. That shows how the market is evolving, addressing many platform challenges while bodies like the WBA turn attention to clarifying the business returns. A critical element of that effort is to support seamless roaming through initiatives like the ICP program. • Despite some uncertainties, a variety of business models is emerging to add to conventional hotspot and wholesale approaches. These include offload, community Wi-Fi, neutral host services, advertising and, over Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • the horizon, full quad plays and the internet of things. For the short term (2013-14), the most important monetization strategies among the respondents are Wi-Fi offload, closely followed by location-based services such as targeted marketing, and enterprise applications. • The most important change to the use of Wi-Fi on mobile devices is happening as a result of seamless and automatic hand-off to and from cellular connections. The increasing emphasis on quality of experience rather than best effort access is seen in the survey, with the quality of connection considered to be the most important factor when choosing between Wi-Fi and cellular, rather than cost. • The most important reason to add Public Wi-Fi capabilities is to improve overall customer experience and therefore the ability to sign up users and keep them loyal. Almost 57% of the respondents said customer experience/retention was a very important reason to implement carrier-class Wi-Fi, while a further 34% said it was important. Next came reduced network costs, followed by improving indoor coverage and generating new revenue streams. • Of the hotspot owners, 28% have networks of over 1,000 locations and six of the respondents have more than one million. By contrast, almost 10% of those supporting roaming have access to networks of over one million locations and 38% offer their customers over 1,000 hotspots. That highlights the value of roaming, but despite high interest in roaming initiatives, there are still challenges, such as lack of standards, cited by 52% as a barrier in this area, followed by seamless authentication (51%), a key issue being addressed by NGH. Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • An Interview with JR Wilson, chairman, WBA JR Wilson was elected as chairman of the Wireless Broadband Alliance (WBA) in October 2012 and is also Vice President, Partnerships and Alliances at AT&T Mobility Services LLC. Mr Wilson describes himself as “the last person to chair a trade association,” but his non-traditional leadership style and his deep experience with commercial large carrier issues have enabled him to make a strong impact on the WBA and its global profile. He is evolving the Alliance’s agenda, with the personal mantra ‘everything standardized, everything connected.’ Almost a year into the role, Mr Wilson reflected on the challenges and achievements of the past 12 months, ones of rapid change for the WBA and the Public Wi-Fi community as a whole. Q: In looking back on a year as chair of the WBA, what do you think have been the key achievements of the Alliance during that period? The single most significant achievement is that so many groups have coalesced around a common vision for Wi-Fi. The WBA has been driving that, but also the Wi-Fi Alliance, other industry bodies and the business community. When I joined there was not the same unity of debate, but now we, as an industry, have identified the challenges and have a clear vision based around our ‘three pillars’ of seamlessness, security and interoperability. That has helped to elevate the viability and reputation of the WBA. It is in a very different place to where it was 2-3 years ago. The WBA has taken a strong leadership role with active participation in many trials. It has the broadest perspective of the organizations centered on Wi-Fi, from device interoperability to the network – billing and so on – right along to customer experience. Its rising profile is partly due to a more focused approach. When I joined the WBA it had about 15 projects and some had very low participation. Now projects must be strategically aligned to the three pillars. Indeed, we now have the opposite issues – 5 high levels of participation, which require more formal processes because of the wide range of opinions. But it’s a nice issue to have. The key is to establish the vision and keep the goals to 2-3 bullet points with clear timelines. Q: And what are the most urgent challenges which still remain to be addressed in 2013 onwards? We need stronger participation from the device community. Apple’s support of Hotspot 2.0 (the Wi-Fi Alliance specification for automatic connection and roaming of mobile devices to Wi-Fi) in iOS7 will help continue to build the momentum, and should encourage other device manufacturers to follow suit. We must ensure we have a standardized framework, so all kinds of companies can plug in. WBA has completed the annex to the GSMA roaming platform recently. Many companies with existing Wi-Fi assets face the challenge of how to move to NGH (Next Generation Hotspot) and still manage their legacy users. The availability of more devices and the deployment of integrated small cells are both important drivers for this migration. Q: What do you personally feel most proud of and what do you see as your main personal challenges as WBA chair? There are challenges inherent in chairing any organization with such a diverse base of members, each with its own business model and motivation, some using Wi-Fi in a very disruptive way. This is why is it important to focus on a seamless, interoperable platform in which companies can deploy flexibly to suit a wide range of business models. I feel proud about getting such a diverse group to coalesce around one vision and to gain support from the community. That was difficult and sometimes painful. I put a lot out there in terms of vision and met a lot of resistance, then it soaked in for six months and everyone came on board. For instance, I personally drove the collaboration with the GSMA, from setting up that initial meeting two years ago at a time when many mobile operators were still resenting Wi-Fi, to establishing a common framework now. Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Q: How is membership building up, and what do you see as the most compelling reasons for a company to join the WBA at the current time? GSMA and, CableLabs (see insert). In addition constant exchange of information is happening with forums like 3GPP, BBF, OMA and NGMN. There are over 100 members today, a growth of 50% over the past two years, and from many sectors – pure play Wi-Fi, aggregators, mobile operators, fixed line carriers and cable operator. The most compelling reason to join is the customer experience – a platform to offer a wide range of products and services around Wi-Fi. The member gains an end-toend environment but a flexible one which supports bringing their own individual business strategy to market. Plus it is a great forum to meet vendors and potential partners. Q: We have seen significant growth in uptake of Public Wi-Fi for data offload. What is your vision for a broader role for Wi-Fi in carrier networks, and do you think the true heterogeneous network is achievable? Q: Do you believe that awareness of the potential of Public Wi-Fi has increased, and what do you see as the key reasons? Yes, there is certainly increased awareness of the potential of Public Wi-Fi, as seen in our rising membership and participation at the WBA Wi-Fi Global Congress. A key factor for this is the high level of visibility and participation for the NGH trials and for the Interoperability Compliance Program (ICP). There are 63 organizations registered for the NGH Trial program, (39 operators and 24 vendors). Of those, 43 have actively participated in a trial (25 of them operators) and 29 have completed tests (16 of them operators). This is delivering invaluable real world experience. Q: How is cooperation with the Wi-Fi Alliance progressing? The cooperation with the WFA is critical because we come from complementary perspectives. The WFA is focused on technical specifications so that next generation equipment works seamlessly in the Wi-Fi environment. Their Passpoint™ program (based on Hotspot 2.0 technical specification) is about the device and equipment, while NGH is about the end-to-end network services in real life operator environment, and those have to align which is important and that’s why we work together so closely. As well as the WFA, other important collaborations include projects with the NGMN, Small Cell Forum, 6 I personally believe as Wi-Fi continues to be more integrated into the core wireless network, “offload” will become less a goal in itself. Instead Wi-Fi will become yet another tool available to network architects to optimize the network’s reach and capacity A few cutting edge operators such as AT&T, KT, Bell Mobility and China Mobile will deploy these multistandard small cells in the near future, while some will wait and let the leaders learn and adjust. But nearly all operators will need HetNet in time, to address rising data needs, because Wi-Fi adds substantial capacity and spectrum. Q: What challenges do you feel need to be overcome? The one I would single out is how ANDSF evolves, and therefore how the macro network and the Wi-Fi environments interact. (Access Network Discovery and Selection Function is part of the 3GPP packet core network standards, allowing devices to find and automatically select non-3GPP connections such as Wi-Fi). More generally, work must continue on policy controls that include different RANs, including ANDSF and ANQP (Access Network Query Protocol) and on the integration of back end systems. The other challenge will always be spectrum. Spectrum is finite and companies are using everything in their tool kits to make mobile broadband as ubiquitous as possible. Wi-Fi has been an underused asset in some ways because it has not been fully integrated until now - Wi-Fi should look, feel and touch just like cellular broadband. Q: We talk a lot about Public Wi-Fi in the mobile operator context, but what about the fixed line carriers? Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • For fixed line carriers, Wi-Fi represents a whole new business opportunity and having a wireless play allows them to participate in the mobile broadband arena. So operators like BT have very elaborate and well defined Wi-Fi strategies. They have extensive backhaul networks in place and are often early adopters of cutting edge technology like NGH. But the importance is the shared vision between all types of operators. Five years ago, there was little opportunity for AT&T to work with BT but now they have common assets and customers via Wi-Fi. The homespot idea, which offers competitive differentiation for some operators, will also drive further proliferation, so it is very interesting. (While the number of public hotspots has grown from 800,000 at the end of 2010 to a predicted 5.8m by the end of 2015, FON already has 12 million hotspots worldwide and this model is expected to gain significant ground from 2014). Q. What is the significance of the ICP program? The ICP is key because operators need to understand their network’s capabilities and how they interoperate. (The ICP aligns and classifies capabilities for roaming, allowing carriers to validate roaming partners and understand how to interoperate. It handles the technical questions of interoperability, freeing contract managers to focus on commercial negotiations.) The ICP also provides a benchmark for developing roaming services and adding new capabilities in the future. It will be more efficient if common technical interconnect issues are part of a standard and not something to be negotiated in a commercial deal. The ICP goes a long way towards that. With NGH, the ICP should, technically, eventually go away. Once everything is fully standardized, there will be no need to know about the network. For now though, roamfests and other programs to make 7 roaming easier, remain important. The WBA’s new roamfests are very different and all about mobility. The recent one occurred in June in London and had 145 participants. Q: How will the WBA need to accommodate potential expansion of Wi-Fi into ‘smart devices’ not controlled by humans e.g. internet of things? At some point we will have to set up specific programs for non-humans. The first priority is to establish platforms and frameworks which can support any devices, then we look at specific issues. Key collaborations with other industry groups: Small Cell Forum— joint collaboration framework to promote integrated small cell and Wi-Fi, the first initiative is a joint white paper GSMA – GSMA Annex - WBA has a joint taskforce with GSMA to address the Wi-Fi Roaming topic Cable Labs – joint taskforce to align WBA roaming framework to the cable community WFA – joint collaboration program to develop Passpoint and NGH Q: To conclude, in one year’s time, what will be the biggest change in the Public Wi-Fi landscape, in your view, and how will that come about? The biggest change will be one that people won’t even realize has happened – a whole new customer experience enabled by ubiquitous mobile broadband access. Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 1. WBA Milestones and Achievements Founded in 2003, the Wireless Broadband Alliance aims to promote and enable global deployment of public Wi-Fi in order to improve the mobile broadband user experience everywhere. It is a key contributor to technical and commercial platforms for next generation Wi-Fi, which will provide carrier-class, secure access and be increasingly integrated with other broadband networks. There are four key WBA initiatives in this regard - Next Generation Hotspot (NGH); Interoperability Compliancy Program (ICP); Global Wi-Fi Roaming initiatives; and the Industry Engagement program. 2013 has been a year of building heavily on those four cornerstones, attracting higher participation, partnership and membership across all the activities. It has also been a year of new initiatives, including the release of Public Wi-Fi Roaming Guidelines as wireless and wireline operators increasingly make Wi-Fi a central element of their mobile data strategies. The aim of the WBA’s Next Generation Hotspot (NGH) program is to deliver a public Wi-Fi experience that is as easy and secure as that experienced on cellular networks Wi-Fi has been fuelled by the world’s largest operators and vendors recently completing a number of advanced trials of NGH which led to the introduction of critical features such as seamless authentication; automatic network detection selection, adoption and secure access. This will ultimately give users easier access to a far greater number of public Wi-Fi access points around the world, without the need for usernames and passwords. According to a recent research from WBA, a higher proportion of data traffic carried by NGH Wi-Fi leads to lower per-bit costs. Mobile operators can reduce their per-bit RAN costs by 18% when they carry 20% of their traffic through NGH Wi-Fi. The combination of Wi-Fi and cellular small cells brings additional cost savings and higher profitability. The per-bit cost in a network with NGH Wi-Fi and 4G small cells may be 38% of those of a 3G macro network. The ability of NGH Wi-Fi to drive more traffic than legacy Wi-Fi from the same infrastructure results in lower per-bit costs for NGH Wi-Fi over legacy Wi-Fi. If the traffic in a legacy network is 25% of that in an NGH Wi-Fi network, the overall per-bit costs will grow by 18%. Hence, based on the potential cost savings and operator commitments, it is forecasted that NGH Wi-Fi to account for 9% of global mobile traffic and reach $150 billion USD in operator revenue by 2018. Looking forward to the 2014, WBA will launch a Carrier Wi-Fi Summit which will take place during the Mobile World Congress 2014. The Carrier Wi-Fi Summit will provide the perfect environment for participants to gain an understanding of the technology and how the industry can best benefit from it. 8 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • WBA Key achievements NGH live experience in Beijing First launch of Wi-Fi Roamfest 2013 Reach “100” members Release of the Carrier Grade Wi-Fi definition and roadmap Guidelines Launched WBA Interoperability Compliancy Program (ICP) and NGH trial Phase 3 50% increase in membership from 2011 2012 Announced the inaugural Wi-Fi Industry Awards Initiated the WBA Interoperability Compliancy Program Launched Phase 2 of the NGH trials 2011 2010 2009 2008 2007 Launched the Joint WBA and GSMA Wi-Fi Roaming Initiative Next-Generation Hotspot Program (NGH) announced, includes the launch of the NGH trials phase 1 User Experience for Smartphone work launched EAP over WISPr 2.0 trial launched WISPr 2.0 development initiated Findings of the 802.1x trial published 802.1x/EAP-SIM trial between FMCA and WBA members Seamless authentication work with FMCA and WiMAX Forum Launch of User Experience Program for UAM WRIX commercially deployed; WRIX wins WBI 2007 Awards 2006 First commercial Wi-Fi roaming announced among members 2003 9 Wireless Roaming Intermediary eXchange (WRIX) development started 2004 Established WBA, started Wi-Fi roaming trials Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 2. An Overview of WBA Member Companies At the start of 2013, WBA membership was up 50% on 2011 figures and during the year, it hit the 100-member mark. This indicates the rising level of industry interest in public Wi-Fi; and the fact that joining the WBA is increasingly seen as a crucial way to participate in the ecosystem and learn about best practice. Last year’s report highlighted Phase 2 of the NGH Trials, the launch of ICP, and the work of the GSMA-WBA Joint Taskforce to promote Wi-Fi offload and roaming. All three of these projects have gained momentum this year. 45 40 35 30 25 20 15 10 5 0 26 23 Mobile operators Fixed and converged operators Figure 1-1: 10 12 43 Wi-Fi operators Suppliers and and aggregators other partners Member Companies by Category as of 1 November 2013 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 11 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Figure 1-2 WBA Members as of 1 November 2013 12 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Today’s Public Wi-Fi Ecosystem 3. The Public Wi-Fi ecosystem has expanded considerably in the past year. Since the WBA published its 2012 annual report, confidence levels in investing in Public Wi-Fi have risen by almost 20% (see page 22) and there has been an influx of operators and vendors into the market. This is being driven by an urgent need to find entirely new economics for data networks as operators battle to deal with exploding traffic, price wars and dramatically higher consumer expectations of quality and performance. These factors are pushing all types of operators to seek additional capacity, and developments in technology and standards are making it easier for them to adopt Wi-Fi as a strategic solution – an integrated part of the overall broadband network rather than being used purely to offload data from the main systems. In turn, that is stimulating the adoption of important industry initiatives like NGH (Next Generation Hotspot) and Hotspot 2.0 with Passpoint™ certification in a widening variety of equipment and devices. These changes are reflected in the growing membership of the Wireless Broadband Alliance and rising participation in its projects and its roamfests. In turn, those activities are contributing to the creation of a rich and integrated Public Wi-Fi platform which can support a wide range of business models, whether as part of a mobile, wireline or quad play service, or standalone. 1. Drivers: The initial driver for the rising investment in Public Wi-Fi is well known – the explosion of data traffic, especially created by the rising use of streamed multimedia content and web services. But as each year passes, the drivers become more complex, as seen in this year’s survey results, in which respondents listed their top three reasons to invest as being improved user experience, subscriber retention and cost reduction. In a mobile, social world, patterns of usage of broadband connections have changed rapidly, placing new requirements on operators’ networks: • • • • 13 Increased capacity – overall data traffic will increase 12 times between 2013 and 2018, and mobile data traffic will rise at an even higher rate, to reach 11.7 exabytes/month in 2018. Operators need to reduce the cost-per-bit of supporting that capacity. Increased speeds and reduced latency – applications like real time gaming or conferencing require the 100Mbps-plus speeds of the latest Wi-Fi and LTE standards, when users are not on fiber. Increased quality of service – as voice and video move to IP, and always-on broadband connectivity becomes vital to many ways of living and working, QoS expectations rise and operators need to meet these expectations in order to attract and retain customers. Increased mobility – behavior patterns are shifting so more people are using broadband from mobile devices because they want to be connected all the time, wherever they are. Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 14 Exabytes/mth 12 10 8 6 4 2 0 2012 2013 LatAm 2014 MEA Europe 2015 NAm 2016 2017 APAC Figure 1-1 Projected data traffic increase over wireless networks to 2018 (consensus forecasts including MaravedisRethink, Cisco VNI, Ericsson) These factors place immense strain on mobile and even wireline networks, as operators need to invest in upgrading speeds, capacity and coverage to deliver ubiquitous broadband. Carrier-class Wi-Fi is a valuable way to supplement capacity with a modern high speed technology (over 100Mbps using 802.11ac) that harnesses relatively plentiful, free spectrum. Equally important is the ability to use Wi-Fi to improve coverage for mobile carriers by filling hotspots and to extend wireline carriers’ availability beyond the home or office. 2. Carrier perceptions and strategies The factors outlined above have transformed the way that service providers regard Wi-Fi, as evidenced by the growing numbers, and mixture of business models, reflected in WBA membership. For mobile operators (MNOs), Wi-Fi has moved from being a threat – an enabler of additional competition in the hands of wireline carriers or start-ups – to a significant opportunity to meet the demands of their customers in a high quality yet cost effective way. Figure 2-1 indicates how strategically important Wi-Fi has become in MNOs’ plans to address rising data capacity needs. This year according to a Maravedis-Rethink survey of tier one MNOs worldwide, they expect 22% of additional wireless data capacity, added during 2013, to come from Wi-Fi offload, and 13% from small cells. 14 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 35 % of new capacity 30 25 20 15 10 5 0 New spectrum LTE upgrades Wi-Fi offload 2013 Small cells inc Wi-Fi Flexible networks CoMP 2018 Figure 2-1 % of new mobile data capacity MNOs expect to gain from various techniques in 2013 and 2018 (source: Maravedis-Rethink operator survey) Some of these will integrate Wi-Fi fully into their cell sites but that will be rare during this year. By 2018, however, small cells will be contributing 28% of additional capacity and 75% of them will integrate Wi-Fi (see chapter 5 for details). In this year, Wi-Fi will still be contributing 20% of additional capacity at the macro level, either through offload or fully integrated HetNet, ahead of key LTE-Advanced technologies such as CoMP (Coordinated Multipoint). For wireline operators, the many cable and broadband providers embraced the Wi-Fi opportunity at an earlier stage but there has nevertheless been a sharp uptick in adoption in 2013. Carriers without mobile networks, such as Comcast, were early to recognize the potential of carrier-class Wi-Fi to enable them to provide services for their subscribers on the move, and to support on load. However as their own customer demands have increased, they too have seen Wi-Fi shift from a valuable add-on to the main services to a central strategic role. This is seen in the investment in large-scale Wi-Fi metrozones, for instance by the partnership of US cablecos (Comcast, Time Warner, BrightHouse, Cox and Cablevision), which are combining their hotspots into a single, national system, currently over 100,000 locations and potentially a million or more in future. The growth in numbers of hotspots will result in a far wider variety of venue types than in the first phase of the industry and there will also be a rise in carrier use of community hotspots or homespots – see Community hotspots: page 28. The increase in confidence in Wi-Fi as a central element of the carrier network and business case was clearly reflected in a survey of the ecosystem conducted for the WBA (Figure 1-1) 15 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 60% 50% 40% 30% 20% 10% 0% 51.8% 18.8% 19.4% More confident about investing More cautious about investing No change in attitude Figure 2-2 Changes in attitudes to public Wi-Fi Source WBA/MaRe survey October 2013 As Figure 2-2 shows, over half of respondents are more confident about investing in public Wi-Fi than they were a year ago. Further analysis is included in Section 5. 3. Development of Public Wi-Fi ecosystem To enable operators to integrate Wi-Fi fully into their strategies to improve customer experience and reduce cost, even while dealing with a data delegate, many technical and business challenges have had to be met on the device and network sides. The most important development in the Public Wi-Fi market in the past year has been a visible expansion beyond simple offload strategies, and towards integration of Wi-Fi into the heart of the network and the business model. Critical enablers of this integration with wireless or wireline networks include roaming, security, seamless hand-off and user experience. Work on all these areas is ongoing, but has has already created great changes in the overall ecosystem. 3.1 The device ecosystem: In particular, it has driven progress in a key enabler of a strong Public Wi-Fi platform - a broad ecosystem of devices supporting secure and seamless hand-off between networks. While Wi-Fi functionality in devices continues to be driven by chipset and major smartphone device OEMs – Apple’s commitment to support Passpoint™ was a critical milestone, for instance – the expansion of today’s Wi-Fi device ecosystem is also being driven by the business opportunities inherent in the growing need for high-quality, mass-market Public Wi-Fi services. Many high end smartphones and some tablets today support not only the 2.4GHz band but also the wider 5GHz (using 802.11n and 802.11ac), offering big improvements in end user data rates as well as better network efficiency and lower costs. Physically larger devices (such as tablets and laptops) are also beginning to support several data streams using MIMO technology as well as multiple Wi-Fi channels (channel bonding in the 5GHz band). Leading smartphone chipset vendors (such as Qualcomm), handset makers (including Apple and Samsung) and wireless software developers (such as InterDigital or SmithMicro) already offer development platforms supporting sophisticated wireless bearer management, including the concurrent use in a single multimode device of both Wi-Fi and 3GPP-based radio technologies. 16 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 3.2 Seamless interoperability: The essential enabler for moving beyond offload and integrating Public Wi-Fi seamlessly into wireless and wireline networks and business models is seamless interworking. The main specifications driving this forward in networks and devices are: • • • NGH (Next Generation Hotspot – WBA) Hotspot 2.0/Passpoint™ (WFA) ANDSF (3GPP) All these are complementary initiatives with considerable cooperation between the various bodies, as discussed by JR Wilson (see pages 5-6). The WBA’s Next Generation Hotspot (NGH) addresses the network operator end of seamless hand-off and roaming, complementing device-side technologies like the Wi-Fi Alliance’s Passpoint™ certification for Hotspot 2.0. There are 63 organizations registered for the NGH Trial program, (39 operators and 24 vendors), and of those, 43 have actively participated in a trial. There are several other important developments on the device side which enable a strong Wi-Fi user experience and interoperability. These are: • • • Wi-Fi connectivity management clients (apps) for devices Security, using EAP-SIM/EAP-AKA protocols (part of the Hotspot 2.0 standard but also an independent standard in its own right) Connectivity policy solutions applied by carriers While Passpoint™ is on track for enabling ‘cellular-like’ functions on Public Wi-Fi networks, effective interworking and hand-off between Wi-Fi and cellular also requires either ANDSF – Automatic Network Discovery & Selection Function as standardized by the 3GPP - or a proprietary equivalent solution. 3.3 Roaming progress In order for the full positive business impact of the WBA’s NGH and WFA’s Passpoint™ to happen in earnest, WISPs, Wi-Fi service aggregators, MNOs and others will need to actively engage in roaming agreements with each other in order that users receive the convenience benefit of automatic network selection, single-source billing, avoiding tedious logon procedures. Roaming agreements can be agreed upon bilaterally between service providers but many are looking towards a platform in which such agreements can be based on more common blueprints, and even sourced and managed as a third party service. The WBA’s ICP (Interoperability Compliance Program) is important in this respect, because it aligns and classifies capabilities for roaming, allowing carriers to validate roaming partners. It handles the technical questions of interoperability, freeing contract managers to focus on commercial negotiations. It also provides a benchmark for developing roaming services and adding new functions in future, so activities like billing become part of the standard, not something to be negotiated in a commercial deal. The growing interest in expanding Wi-Fi roaming was evident during the most recent Wi-Fi Roamfest event held by WBA in London in June 2013 which had 145 participants. 3.4 Standards evolution will drive the ecosystem further While the Wi-Fi standards 802.11n and more recently 802.11ac are an excellent basis for offering highperformance Public Wi-Fi services to the mass market, Wi-Fi standards are at the same time sufficiently open to allow for technical innovation that significantly enhances the user experience and consequently broadens Public Wi-Fi business opportunities. 17 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • There are also new, emerging forms of user authentication looking emerging, some based around social media for instance allowing Facebook customers to share access credentials with friends or – as in the case of Purple Wi-Fi and Wavespot – commercial services that trade free Wi-Fi access for C2C marketing posts on social media websites. 4. Spectrum and interference challenges and solutions As Wi-Fi evolves from a ‘best effort’ technology to a strategic carrier-class one, it faces some of the same challenges as licensed wireless networks, notably spectrum shortage and interference problems, both exacerbated by rising data traffic and the need for densely packed wireless cells to boost capacity. Radio network interference is one of the primary concerns of service providers when considering Public Wi-Fi as a technology of choice. In principle unlicensed bands are free for anyone to use, but there exists a number of deployment and/or technical approaches to counter radio interference service degradation issues: 4.1 Venue exclusivity: Unlicensed bands become ‘licensed’ Exclusivity agreements to install and operate Public Wi-Fi services for a particular venue – such as a mall, an airport, a sports arena, or even through exclusive access to municipal ‘street furniture’ such as lamppost - are often adopted to ensure that interference from other Wi-Fi access points is virtually eliminated but other approaches such as a neutral host model are also important options 4.2 Using Public Wi-Fi networks as a neutral host Public Wi-Fi is an elegant and proven solution for ensuring that many service providers and private clients (enterprise and for example retail) can be served by sharing a common Public Wi-Fi network infrastructure. A neutral host Public Wi-Fi solution also reduces or even eliminates interference issues as a single, high-capacity Public Wi-Fi network to serve all can be optimized for frequency reuse either reduces or entirely eliminates the need for parallel networks. 4.3 Interference mitigation techniques The Wi-Fi industry has made great progress in countering unlicensed band interference issues through the use of innovative radio technology. Solutions include methods for dynamically re-planning the radio network in response to quality degradation and using beam forming to direct signal energy to the right areas. Of course, the favoured way to reduce interference risk is to have more spectrum. Wi-Fi’s need for additional capacity may not be as imminent or urgent as 3GPP technologies’, but congestion in the overused 2.4GHz band is a rising concern. Other options include: 4.4 Widespread use of the 5 GHz band The allocation by the FCC and other regulatory bodies of the 5 GHz bands (up to several hundred MHz have been reserved for this depending on region and country) allows Public Wi-Fi service providers to build networks offering much higher capacity and less interference. Meanwhile most new high-end Wi-Fi devices support either single or dual-channel 5 GHz Wi-Fi. New spectrum options The highest profile new band for Wi-Fi is 60GHz, where the 802.11ad standard lives. This technology is assembling a credible ecosystem thanks to its deepening convergence with mainstream Wi-Fi. Another important option is to run Wi-Fi in TV white spaces spectrum, though several other protocols are vying for attention there too. 18 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Figure 4-1 Currently available Wi-Fi spectrum in 5GHz, and new channels proposed by US and Europe A future challenge will be for the Wi-Fi community to address non-human connectivity services – the internet of things as well as smartphones and PCs. The WBA is already studying this issue and the Wi-Fi ecosystem is also looking at 900MHz as a way to take a leading role in home and building automation, and the internet of things. The upcoming 802.11ah standard, which will power commercial chips from 2015, runs in 900MHz and can support speeds from 150Kbps in a 1MHz band to 40Mbps over an 8MHz band. 5. The next steps for the ecosystem For now, data offload remains an important aspect of Public Wi-Fi, especially as mobile operators step up their activities. In general, carriers with major offload strategies estimate that about 20% of their overall data traffic rides on Wi-Fi. In some intense areas of data usage, such as central areas of PCCW’s Hong Kong coverage zone, the figure can be as high as 80%. Within the home or business, there are often higher levels of offload – 50-60% - to the users’ WLANs. The trends are intensified by the introduction of tiered 3G tariffs, and the investment in more readily available Wi-Fi. However, there are important new trends which will make Wi-Fi increasingly strategic to carriers and support other approaches aside from data offload: • • • Shift of focus from offload to onload Use of ubiquitous Wi-Fi to support a quad play offering for wireline providers Full integration of Wi-Fi into the small cell layer of a HetNet, alongside 3GPP cells In a recent report on the Next Generation Hotspot business model, the WBA explored the benefits that NGH could bring to fixed and mobile operators, in terms of cost and revenue, when Wi-Fi hotspots are used to complement carrier networks. The report found that mobile operators can reduce their cost-per-bit by 18% when they carry 20% of their traffic through NGH Wi-Fi; while the per-bit costs in a network combining NGH and 4G small cells are just 38% of those in a 3G macro network. The WBA forecasts that NGH Wi-Fi will account for 9% of global mobile traffic and $150 billion in operator revenue by 2018. To achieve such goals, there will be several important enablers: • • • • • • • • 19 Rising level of support for Wi-Fi in cellular devices at all price points Integrated Wi-Fi/cellular small cells, possibly even at chip level Proliferation of ‘homespots’ to increase Wi-Fi coverage under carrier’s control A common user experience and QoS across all broadband connections Common core platforms to manage both types of cell in the same way Advanced policy management software to allocate traffic between cellular, wireline and Wi-Fi Security advances Standardized ways to support full interworking with the macro layer Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • These developments will require considerable effort by standards bodies, industry groups and the makers of devices and networks. However, they are already in high demand by carriers as they will be part of the next generation of business models. For MNOs, these will be based on the HetNet (heterogeneous network) in which large and small cells in different bands and with different air interfaces will work together to form a seamless pool of capacity. For wireline carriers, these will revolve around ubiquitous clouds of Wi-Fi, whether via homespots or hotspots, to support new services, mobility, onload and roaming deals with other types of carrier. These models are examined in more detail in the next section. 20 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 4. The Business Landscape of Public Wi-Fi to 2018 This section is designed to set the context for the results of the survey conducted on behalf of WBA by MaravedisRethink across the Public Wi-Fi ecosystem in October 2013. Those results are set out in full in Chapter 5 and provide a detailed snapshot of the current state of play across the public Wi-Fi sector. This chapter complements the results by providing analysis of the underlying business models and provides forecasts of future evolution, based on extensive ongoing research across Maravedis-Rethink’s base of mobile, fixed and converged operators, and of wireless vendors. 1. Business models: The early days of public Wi-Fi revolved around just a few business models, some of which proved more sustainable than others. The key models were: • • • • • Standalone hotspot access, paid-for Standalone hotspot access, free but driving uptake of the venue owner’s core service (eg coffee shop) Wholesale access Aggregation, including business subscription services Municipal Wi-Fi In the past few years, some of these have come under pressure. For instance, in some areas consumers have come to assume Wi-Fi is free making the pay-as-you-go model harder to sustain. On the other hand, new models are emerging which harness Wi-Fi particularly where it is integrated with other carrier services at the level of the network itself, not just the bill. The proliferation of profit models is driven by three fundamental changes to the public Wi-Fi landscape: • • • The demand for ubiquitous access, driving investment in networks in a wider range of venues, including outdoors and stadiums The increased integration of Wi-Fi with mobile networks, supporting new services and value propositions enabled by seamless hand-off The evolution of seamless Wi-Fi roaming to enable a ubiquitous experience, which in turn supports new services As outlined in the previous sections, wireline and wireless operators are looking beyond the services enabled by individual hotspots to a world where they can make use of ubiquitous clouds of Wi-Fi. This availability and coverage will enable a whole new range of business cases. The core models are outlined in this table: 21 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Level of maturity Business model Well established Pay-as-you-go access Free access driving other services Wholesale access Aggregation Managed services (venues and outdoor) Growing rapidly Cellular offload (user driven) Cellular offload (carrier driven) Added value for broadband subscription Community Wi-Fi/homespots Neutral host services Advertising and sponsorship Wi-Fi roaming services Emerging Onload Wi-Fi capacity marketplace./trading Transaction platform Internet of things Location-aware services and promotions Table 1 Business Models In general, the key to profitable Wi-Fi is a broad platform supporting areas like interoperability and roaming which is readily adaptable to a wide variety of services and business cases. 2. Key business models in 2013: Free Wi-Fi as a customer retention strategy for MNOs: Recognizing the unabated popularity of Wi-Fi among consumers, some mobile and fixed carriers offer free access to a network of public Wi-Fi hotspots as a customer retention strategy. Such services are usually implemented using downloadable apps that allow users to find and connect to Wi-Fi hotspots. In some cases, users receive access to an aggregated network of up to thousands or even millions of hotspots using solutions from such companies as iPass, Boingo, or Devicescape. It is likely that use of free Wi-Fi access as a retention (and traffic offload) strategy will continue to grow as service providers look for ways to stand out in a highly competitive broadband services market. 22 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Free Wi-Fi as an extended service delivery platform for MSOs A number of MSOs – such as Time Warner Cable and other US cablecos, BSkyB’s The Cloud unit in the UK and Shaw in Canada – today offer free access to Wi-Fi hotspots as an extension of their service delivery footprint. The concept is to offer fixed line subscribers the additional convenience and value of accessing content and other applications while on the go. Seamless (but simple hand-off) Wi-Fi offload, as part of a bundled (paid) service Some large MNOs – such as Telia Sweden, TIM Brasil and others – offer Public Wi-Fi services as a part of their paid bundled broadband services. This business model is likely to become popular in the short term for highdensity indoor locations in mature markets, in emerging markets and in very dense traffic venues such as stadiums where licensed spectrum is scarce. Today, most such deployments use simple device-driven handoff mechanisms to steer traffic to Wi-Fi networks while others employ connectivity management systems using device clients. Beginning of wholesale Wi-Fi capacity services As seamless Wi-Fi offload technology matures, service providers will have a great number of means at their disposal for effectively controlling connectivity, applying policies and extending their service reach to both SIM and non-SIM devices. This trend will increasingly enable innovative service providers to offer wholesale Wi-Fi capacity and high-quality seamless Wi-Fi services to range of wholesale clients as seen at TowerStream in the US or Deutsche Telekom in Europe. 3. Expanding venues drive new models: The expansion of Wi-Fi locations is the result of a virtuous circle. As users demand ubiquitous access, investment in new locations is encouraged – and the more locations are built out, the more innovative services can be delivered by start-ups or existing providers. The most profitable places in the first generation of public Wi-Fi were clearly those where there was high demand, especially from business travellers, for access on the move – airports, hotels and convention centers. Now, with changing user habits, there is increasingly demand for broadband access almost everywhere. Important trends are: • • • • 4. The expansion of downtown Wi-Fi zones such as those seen in highly connected cities like London, San Francisco, New York or Tokyo. These provide clouds of access with access points mounted outdoors on lamp-posts as well as in traditional locations such as retail outlets and bars. Installation of Wi-Fi in nearly all retail outlets, not just the first-wave favorites like coffee shops. Those were places where users would typically sit for a period of time with a laptop, but the rising use of Wi-Fi on smartphones is creating demand for instant access everywhere – the supermarket to check on a recipe online, for instance. Community Wi-Fi (see later section) Stadium Wi-Fi. Major events such as the London Olympics (the highest density WLan ever built, over nine stadium) have shown how modern carrier-class equipment is able to deliver broadband access to huge numbers of bandwidth-hungry users, creating profitable, if temporary, business cases revolving around sports results, information and photo sharing. The expansion of roaming As we outlined in the previous chapter, another important factor to enable new Wi-Fi models is the development of global roaming. This is clearly seen in the response to the WBA’s ICP, NGH and plugfest initiatives. In the past, the number of users who could take advantage of hotspot roaming was a tiny percentage of the total potential, which amounted to a missed opportunity to monetize Wi-Fi. That is starting to change and by 2018 roaming is expected to be fully automated across more than 80% of Public Wi-Fi networks according to a recent survey if Wi-Fi and mobile operators by Maravedis Rethink. 23 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 5. Some significant emerging models As availability, roaming and interworking with cellular networks all improve over the next few years, business models will begin to change. Full integration of Wi-Fi technology into the mainstream mobile world of networks and devices will allow for continuity of services across any radio platform including Wi-Fi. Many of the emerging business models revolve around services that can ride on always-on Wi-Fi, particularly for retailers; or around ways that a network owner can attract the widest range of partners to its enhanced system, to maximize revenue. They include: Retailer marketing and promotions: Retailers are increasingly using Wi-Fi services to promote and market products and services. Some envisage future retail outlets as showrooms for items that are then purchased online over a Wi-Fi connection while in the store. Location-based analytics and push advertising will also become a part of the basis for new forms of targeted retail marketing in malls, sports venues and outdoor locations. Neutral host: Public Wi-Fi with the inclusion of seamless Wi-Fi offload is an ideal technology for providing wholesale Wi-Fi services to many service provider clients by configuring multiple SSIDs on the same physical network. Services can be provided to MNOs, MVNOs, WISPs, MSOs, and enterprises based on a wholesale or managed services model. Infrastructure companies such as Towersteam in the US and Arqiva in the UK have adopted this approach. Cloud-based & crowdsourced hotspot aggregation: A number of new providers are using the global ubiquity of Wi-Fi hotspots – carrier-grade or otherwise – to offer mass-market aggregated Wi-Fi services to MNOs or other carriers. For example, a SIM-based smartphone may access a wide footprint of hotspots (in some cases millions) seamlessly with a device client installed, as with services from Devicescape and WeFi. These aggregated Public Wi-Fi networks can be either crowdsourced or based on a WISP partnership model. Bandwidth exchange for Wi-Fi capacity: BandwidthX offers an open market exchange of capacity between Public Wi-Fi operators and any partners in need of Wi-Fi capacity. The solution allows carriers to bid for and purchase Wi-Fi capacity dynamically from available WISPs, with pricing based on a range of network selection policies, including place, time of day, etc. 6. Business challenges The Public Wi-Fi segment is evolving rapidly but key challenges to a sustainable profit model remain and will need to be addressed to accelerate adoption further. Among the most significant business challenges are: • • • 24 Wi-Fi is still perceived by many users as being ‘free’. Free Wi-Fi is an important element of some business models, such as added value for broadband subscribers, but encouraging users to be willing to pay for Wi-Fi is critical to others. In many cases, paid-for Wi-Fi will be justified by a superior user experience, or distinctive applications, but these require additional investment. In some cases, hotspot operators will face dilemmas because of the plethora of models. For instance, the business case for cellular offload needs to be far clearer for many site owners before they will favour those deals, over more proven revenue streams such as sponsorship. The ecosystem survey shows that respondents perceive business model uncertainty to be one of the top three barriers to deploying and monetizing Public Wi-Fi. As successful profit models increasingly rely on an excellent quality of experience, providers will need to be increasingly aware of issues such as congestion and overloading, and will have to be increasingly careful about their choice of partners to ensure consistency. This will lead to a rise in service level agreements. Quality of experience is considered more important than cost in attracting and retaining customers, the survey indicates. Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 7. Forecasts: the growth of Public Wi-Fi: Growth of Public Wi-Fi hotspots: The new business models we have outlined are only enabled by a sharp increase in the availability and quality of public Wi-Fi. The progress towards near-ubiquitous, carrier-class Wi-Fi is seen in the rise of new sites deployed – a steady annual increase from 5.2m in 2012 to 10.5m in 2018, representing a CAGR of 13%. Growth is steepest in the period from 2013 to 2015, a time when there is rapid increase in demand for broadband on the move, as well as accelerated development of enabling technologies, which increase operators’ willingness to invest. There is a second growth spurt in 2016 to 2017 driven by emerging economies. Regional patterns: In regional terms, Asia-Pacific is the strongest driver of Public Wi-Fi growth throughout the period, although the highest CAGR rate is actually seen in Africa (45%) which will experience rapid growth from 2015 from a very low base, with operators racing to address burgeoning broadband demand via cost effective Wi-Fi. The APAC region accounted for two-thirds of deployments in 2012. That figure will fall by 2018, as some major rollouts will have been completed and other regions will have accelerated their efforts. However, APAC will still account for almost half (48%) of build-outs. In the early period, the growth is enhanced by some huge carrier rollouts such as that of China Mobile, while later in the period, countries like Indonesia will be coming up to speed. In other regions, North America and Europe account for between 9% and 11% of deployments throughout the study, with an increasing mixture of participants including major cableco and wireline roll-outs like those of BT and Comcast, and mobile-driven projects like AT&T’s. In 2018, they will be marginally overtaken by South Asia, mainly driven by India. 12,000 10,500 9,600 10,000 7,900 8,000 ,000 6,500 6,000 8,300 7,100 5,200 4,000 2,000 0 2012 2013 2014 2015 2016 2017 2018 Figure 7-1 Deployment of new carrier-grade Wi-Fi hotspots by MNOs and MSOs 2012-2018 Source: Maravedis-Rethink forecasts 25 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • In 2018, the cumulative installed base of Wi-Fi hotspots worldwide will total about 55.1m, including cellular base stations with integrated Wi-Fi but excluding homespots. APAC will account for over 55% of this total base, followed by Europe and North America on about 10% apiece and South Asia on 8%. 7.9 6.1 10.0 3.0 10.6 2.4 55.5 4.3 Africa APAC CALA CIS Europe Middle East/Turkey North America South Asia Figure 7-2 Installed base of carrier-grade hotspots by region 2018 (Exc homespots) Source: Maravedis-Rethink forecasts Operator types: Currently, the installed base of public Wi-Fi hotspots remains dominated by the pureplay providers – WISPs, aggregators, venue owners and some smaller groups such as municipalities. These Wi-Fi only operators continue to expand their networks rapidly, accounting for the largest number of new sites until 2015 and many MNOs and MSOs will continue to rely on these networks for their own services rather than building their own. Despite the high profile roll-outs of some mobile and fixed operators, many prefer to rely on third party partners for their hotspots, and the incentive to invest in their own locations diminishes as seamless hand-off enables them to offer a fully branded and integrated service, without the cost of deployment. This will continue to support considerable build-outs by wholesalers. Nonetheless, some fixed and mobile operators will prefer the control over location and quality of service that full ownership brings. In 2013, that trend has been led by a few massive MNO deployments, mainly in Asia, and by more widespread activity by fixed line carriers in North America, selected areas of Europe and Asia. By 2018, the move by MNOs to integrate Wi-Fi into their 3G/4G small cells will accelerate the growth of MNO-controlled Wi-Fi, and that group will become the largest deployer of hotspots in 2018, accounting for 40% of new sites, or 4.2m. That changing pattern of MNO deployment will intensify as the operators start to implement ‘HetNets’ in which WiFi, 3G and 4G are integrated in the same infrastructure, pooling different spectrum bands. As Figure 5 shows, MNOs will continue to rely heavily on third party partners’ hotspots, which will still account for 45% of the locations available to mobile subscribers in 2018. Of those owned by the operator, two-thirds of new deployments will be fully integrated with cellular base stations by 2018 (see Figure 8). This forecast is reflected in the results of the 26 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • ecosystem survey which found that, while two-thirds of operators of all kinds would build their own footprint in selected areas, over 90% would rely on partners and aggregators to extend that footprint. 120,000 100,000 ,000 units 80,000 60,000 40,000 20,000 0 2012 2013 2014 Hotspots 2015 2016 2017 2018 Homespots Figure 7-3 Deployment of Wi-Fi hotspots by operator type 2012- 2018 Source: Maravedis-Rethink forecasts Operator examples: Japan’s KDDI has an ambitious cellular/Wi-Fi integration strategy and is adding roaming and HetNet capabilities on top of its network of about 120,000 hotspots, deployed with Ruckus Wireless. This is billed as “the world’s first and largest ‘instant-on’ Wi-Fi access and mobile data offload service”. Five US cable operators - Comcast, Time Warner Cable, BrightHouse Networks, Cablevision and Cox – reached an agreement in 2012 to allow one another’s customers to access their combined network of hotspots around the US – 50,000 at launch, a figure which tripled to 150,000 within a year of launch (as of June 2013). All the locations are branded ‘CableWi-Fi’ to make them easily recognizable to customers. Cablecos’ increasingly large hotspot networks, and their residential ‘homespots’, enable them to add a wireless element to their TV and broadband services, and to engage in alliances with cellcos, to support data offload strategies. Taiwan’s Chunghwa Telecom is expanding its hotspot network rapidly to increase its range of services in a highly competitive market, and to offload data from its cellular systems. It currently has over 36,000 hotspots and this figure will reach 45,000 by 2014. The company this year introduced a new service that switches Android phones from the 3G network to Wi-Fi wherever the latter is available. 27 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 4,000 3,500 ,000 hotspots 3,000 2,500 2,000 1,500 1,000 500 0 2012 2013 Common small cell 2014 2015 2016 Separate but owned 2017 2018 Partner Figure 7-4 Ownership of carriers’ hotspots by 2018. Source Maravedis-Rethink forecasts Community hotspots: Community hotspots or homespots are just emerging as a potentially significant element of the Public Wi-Fi landscape. In this model, subscribers allow part of the capacity of their residential gateway to be open to casual use. The homespot may be provided by a broadband or other provider directly or via a partner. These access points provide low cost additional coverage and capacity, especially in underserved areas, and are seen by some carriers as a way to provide their subscribers with free or low cost access on the go, harnessing existing equipment – or even equipment financed by the end user. 28 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 4500 4000 3500 ,000 hotspots 3000 2500 2000 1500 1000 500 0 2012 2013 WiSP/wholesaler 2014 Fixed line 2015 2016 MNO 2017 2018 Other (eg muni) Figure 7-5 Deployment of community hotspots 2012-2018 Source: Maravedis-Rethink forecasts These devices will not initially support Public Wi-Fi standards of QoS or interoperability and they are lower powered than commercial hotspots, so the quality of experience will be variable. However, with major operators taking this in their Wi-Fi Strategies, it is important to note and given the size of the residential installed bases of the carriers involved. For example, BT’s community Wi-Fi has 5.5million hotspots through this strategy and it has been a major contributor to the success of BT’s Consumer broadband business in the UK as a contributor to broadband customer acquisition and retention. BT customers are then able to access its community Wi-Fi estate, in-door venues and outdoor Wi-Fi networks all using their same home broadband access credentials. In addition, AT&T and FON have a global Wi-Fi roaming agreement that will give customers of both companies a broader and richer Wi-Fi experience as they travel the globe. their potential growth in unit terms is huge – Figure 6 shows a 39% CAGR to reach an addressable base of over 100m worldwide by 2018 (one third party provider, FON, already claims it will reach 35m by the end of 2013). 29 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 5. Wi-Fi Ecosystem Survey and Analysis Other, 3.6% Cable Operator, 7.1% Mobile Operator, 11.7% Analyst/Consult ant, 22.8% Universal Operator (fixed and mobile), 11.2% Device vendor, 8.6% Wireless ISP, 11.7% MVNO, 0.0% Network Vendor, 17.8% Content provider, 2.0% Pureplay WiFi operator, 3.6% Figure 7-6 What is your company’s primary area of business? Source: WBA- Maravedis-Rethink survey, Nov 2013 The Wireless Broadband Alliance, in conjunction with Maravedis-Rethink, carried out an industry survey during Q313 to examine the status of the carrier Wi-Fi market and the key trends among its participants. There were 197 respondents in total, with 56% of those being operators (Figure 7-6). Within that group, two-thirds were fixed or mobile operators and one-third were WISPs or pure-play Wi-Fi operators. Other significant respondent groups included network vendors (17%) and device suppliers (9%). Regionally, the response was strongest in the areas with the most developed markets for Wi-Fi and broadband services. North America and Asia-Pacific fielded almost 30% of respondents each, followed by Europe on 28%. There was significantly higher response from North America than in last year’s study indicating the growing importance of Wi-Fi to carriers in that region. Over half the participants (54%) had strategy or management based roles, while 42% had technical and product responsibilities. 30 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Other, 0.0% No change in attitude, 29.4% More confident about investing, 51.8% More cautious about investing, 18.8% Figure 7-7 How your attitude towards public Wi-Fi in your network changed over the last 12 months? Source: WBA- Maravedis-Rethink survey, Nov 2013 The rising profile of the WBA was highlighted by the survey, which found that over three-quarters of respondents were familiar with its work, and within that, 30% were ‘very familiar’. Greater awareness of, and engagement with, the WBA is one factor behind a rising level of confidence in public Wi-Fi. Just over half (51%) of the respondents said there were more confident about investing in the technology than they had been a year earlier (Figure 7-7). This is a significant increase in bullishness compared to last year, when 43% had increased their confidence levels. Similarly, there was a decline in those who were cautious about investing in public Wi-Fi – 19% were more cautious than 12 months ago, compared to 24% in the 2012 study. That confidence, of course, will translate into increased deployments and more ambitious business plans, as reflected in the forecasts in Chapter 5 and in the roadmaps being announced by some carriers – China Mobile’s plans for one million hotspots, for example, or the 200,000 locations already opened up by the alliance of five US cablecos. 31 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 1. Plans for NGH: 250 200 150 100 50 0 Increase Increase Increase offload from customer revenue cellular satisfaction and opportunities networks to reduce churn reduce or defer opex/ capex 3 Least important 2 Important Other 1 Most important Figure 1-1 What do you consider to be the main driver for investing in NGH-compliant networks? (Please rank your top three, 1 being most important and 3 being least important)? Source: WBA- Maravedis-Rethink survey, Nov 2013 An important driver of increased confidence is the maturing of standards, particularly the ability for Wi-Fi devices and access points to interoperate openly and to hand off to cellular networks. Next Generation Hotspot (NGH) is playing a key role in that standards base and is moving to the front of the minds of the ecosystem players. Over three-quarters (77%) of the survey were familiar with the concept of NGH, with 32.5% being ‘very familiar’. The main drivers for investing in NGH-compliant networks are currently related mainly to network efficiency and customer satisfaction, more than additional revenue generation (Figure 1-1). Indeed, that is a feature of the market as a whole. At this stage, the priority is to improve the overall user experience, which in future can be expected to increase revenues and support additional services. The most pressing driver for NGH investment was to increase offload from cellular networks, with half rating this as very important. This is particularly significant, of course, for mobile or fixed/mobile operators looking to defer costs of expanding their cellular capacity and also for the Wi-Fi operators and wholesalers which support them. Close behind came the need to increase customer satisfaction in order to reduce churn from operators of all kinds, while increased revenues were rated of top importance by 35%. Other drivers that emerged as important included facilitation of seamless roaming. 32 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 2014, 25.9% Don't know, 43.7% 2015, 17.8% Beyond, 3.0% 2017, 2.0% 2016, 7.6% Figure 1-2 When do you plan to deploy an NGH compliant network? Source: WBA- Maravedis-Rethink survey, Nov 2013 These motivations will spur investment in NGH compliance at an early stage. Of the respondents which operate or plan to deploy public Wi-Fi, 44% will start the process next year (25% of the total survey base, but some respondents will not be network deployers). Of course, a few frontrunners have already begun. Boingo Wireless unveiled an NGH-compliant location in Chicago’s vast O’Hare Airport in September and early trials and deployments like this will provide valuable testbeds of real world performance, which in turn will increase confidence. The carrier Wi-Fi ecosystem certainly regards NGH as an urgent issue – a further 32% will deploy in 2015 (Figure 1-2). However, the timescales for wide-scale NGH deployment have lengthened compared to last year’s survey, in which a high number of respondents believed they begin roll-out during 2013. In our opinion, this reflects several factors, including device availability and the distraction of other competing business necessities. There is also some uncertainty over the business case and these concerns may have persisted longer than anticipated a year ago. This is seen in the respondents’ views on obstacles to NGH deployment (Figure 1-3). The biggest challenges relate to cost and business case, with over 40% citing lack of a clear return on investment (44%) or the cost of deployment (42%) as issues of top importance. Device availability was considered a critical issue by one-third and the process of migrating to compliant equipment by 26%. A range of other issues was cited too including issues with unlicensed spectrum, commercial roaming negotiations and backhaul. 33 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 250 No of responses 200 150 100 50 0 Cost of NGH Lack of clear deployment ROI for NGH investments Handset availability Most important 2nd Change to Passport compliant equipment Other - Please specify 3rd Figure 1-3 What do you perceive as the main obstacles to deploying an NGH compliant network? (Please rank your top three, 1 being most important)? Source: WBA- Maravedis-Rethink survey, Nov 2013 2. The expansion of the Public Wi-Fi footprint: The survey also highlighted the changing patterns in Wi-Fi traffic as increasing mobility between hotspots and cellular networks is supported. From early days when cafes and transport hubs were the main focus of public Wi-Fi, the venue types are diversifying rapidly, partly because so many people have Wi-Fi in their handsets and want to access it everywhere. A year ago, the main source of traffic growth over the coming year was expected to be outdoor hotzones, which were picked out by 46% (Figure 2-1). 34 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 60 50 % 40 30 20 10 0 Figure 2-1 Which Wi-Fi venue do you expect to see the greatest growth in traffic demand in the next 12 months? Source: WBA- Maravedis-Rethink survey, Nov 2013 By contrast, hotzones are in fifth place this year, while the venues which this year’s survey expects to be the main generators of demand growth are shopping malls and stadiums. This indicates the expansion of Wi-Fi beyond individual hotspots to provide broadband access in very large areas of high consumer footfall where users will often want to be connected in order to seek information on purchases, consult friends or share images. More traditional Wi-Fi venues such as airports, stations and public squares are also high on the list of growth drivers. The impact of near-universal inclusion of Wi-Fi in smartphones is also helping to change traffic patterns. As users increasingly connect via handsets rather than laptops, far more traffic originates from these devices and this can be expected to increase further with the rise of cellular/Wi-Fi roaming and seamless hand-off. Well over half (57.6%) of respondents believe that more than 30% of smartphone-originated traffic is now transmitted via Wi-Fi. That is up from about 40% last year, when 43% of the survey thought less that 20% or less of smartphone traffic travelled over Wi-Fi (compared to 28% now). 35 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 250 200 150 76 59 80 65 100 79 71 38 41 By the device By the network operator 50 0 3. Neutral 2. Important 70 By the end-user 4 0 1 Other - Please specify 1. Extremely important Figure 2-2 In order of priority, how do you believe Wi-Fi network neutral discovery & selection should be managed? Source: WBA- Maravedis-Rethink survey, Nov 2013 3. Integration with the cellular network The most important change to the use of Wi-Fi on mobile devices is happening as a result of seamless and automatic hand-off to and from cellular connections. As described in Chapter 4 this can be done in various ways, some controlled by the user via a client application, some by the operator, some automated by the device. As Figure 2-2 indicates, all three methods of managing network neutral discovery and selection will remain important, and the choice will depend heavily on the individual starting point. Respondents most commonly believe a combination of the operator and the device should handle this process – 41% rated the operator as ‘extremely important’ in managing discovery and selection and 39% placed the device in this category. This will continue to be a diverse area where both operators and device makers will add capabilities and value. Another vital aspect of integrating Wi-Fi access with other carrier networks will be the criteria on which connection decisions are made, whichever party is making them, as Figure 3-1 highlights. 36 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Connection cost Traffic type Connection quality Connection speed 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Figure 3-1 What will be the most important factor to consider when managing connection decisions between Wi-Fi and other access networks? Source: WBA- Maravedis-Rethink survey, Nov 2013 In this area, the quality of the connection takes precedence over other factors such as speed, traffic type and even cost. Almost half (48%) of the respondents thought quality was ‘critical’ in the decision and 42% said it was ‘very important’. That compared to 36% who thought cost was critical and 37% who rated it very important. The figures for speed were 24% and 57% respectively, while traffic type was considered the least important factor – though certainly not negligible, with 15% rating it critical and 29% very important. The findings reflect the increasingly high QoS demands of users, as they run many of their most important work and social functions on their mobile devices – and also the opportunity for carriers to charge higher rates if they can guarantee quality. 4. Monetization Monetization is one of the most complex and confusing aspects of Public Wi-Fi, and of course, one of the most critical. In the near term at least, the most important strategies will relate to mobile data offload, location awareness and enterprise – all of them areas where Wi-Fi can offer services that are distinct from basic access and which can add value to the user. Only 4% of respondents had no monetization strategy in place at all and on average, the companies were implementing or enabling two or three different strategies each (Figure 4-1). 37 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 40% 35% 30% 25% 20% 15% 10% Other Enterprise Services Location based services WiFi Analytics Marketing deals in retail Advertising WiFi as a metropolitan service WiFi offload wholesale ROI from WIFi Offload 0% WiFi Roaming 5% Figure 4-1 Are you implementing Wi-Fi monetization strategies? If so, which ones? (multiple responses are allowed) Among these, Wi-Fi offload was the most valuable short term element, whether the direct returns mobile carriers can make by easing the strain on their cellular networks, or the revenues to wholesalers from supporting offload. These were selected by 36.5% and 31.5% respectively. They were closely followed by location-based services such as targeted marketing and enterprise applications, both of which are being supported by 35% (either directly by operators, or enabled by vendors). There are still challenges to monetizing public Wi-Fi, particularly seamless cellular/Wi-Fi services because the market is so young, as Figure 4-2 demonstrates. 38 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 70% 60% 50% 40% 30% 20% 10% 0% Clarify business model Deployment Availability Clarify of WiFi technology issues: ex: enabled site roadmap acquisition, handsets permits, Ensuring quality of service Other Figure 4-2 What do you see as the key challenges faced by mobile operators if they are to deploy and monetize seamless Wi-Fi services? Source: WBA- Maravedis-Rethink survey, Nov 2013 The greatest ones relate to the business model itself, and 61% of the operator respondents said this was a key challenge. As in the early days of many platforms, there are many uncertainties about the most effective ways to get return on investment and maximize revenues, though the example of some of the carriers taking leadership roles will help instil confidence in the profit potential. Given the paramount need to deliver high quality in order to attract and retain customers, as seen in previous questions, it is unsurprising that ensuring QoS comes a close second to the business model as a critical challenge. It was identified by 55% of the operators and is, indeed, essential to solidifying the business case. The practical issues of acquiring sites and permits for hotspots was picked out by almost 40% of the respondents in this group, followed by the need for greater clarity about the next steps in technology. Ecosystem surveys and conversations with the ecosystem are important to shape the WBA’s own program of initiatives, where it can play a role in addressing a challenge in the Wi-Fi business model. Many of its initiatives are starting to address the challenges outlined above, such as improving the overall quality of experience, in order to support solid business cases. Despite the obstacles, there is still high enthusiasm for including carrier-grade Wi-Fi into the portfolio of many types of respondents (Figure 4-3). Pureplay Wi-Fi providers are adding carrier-class capabilities to attract more lucrative customers such as cellco partners; while wireline and wireless carriers and their vendors, are all seeing Wi-Fi as increasingly central to their range of products and services. 39 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 200 180 160 140 120 100 1. Very important 80 2. Important 60 40 3. Somewhat important 20 Other Improve indoor coverage Generate new revenue streams (advertising, analytics, M2M,) Reduce network costs by offloading data 4. Not important Improve customer experience and retention 0 Figure 4-3 If you do have any plans to include carrier-grade Wi-Fi services into your portfolio can you explain why? Source: WBA- Maravedis-Rethink survey, Nov 2013 The most important reason to add Public Wi-Fi capabilities is to improve overall customer experience and therefore the ability to sign up users and keep them loyal. This reflects the findings in other parts of the survey, which highlight the importance of service quality in any business model, even ahead of considerations of cost. Almost 57% of the respondents to this question said customer experience and retention was a very important reason to implement carrier-class Wi-Fi, while a further 34% said it was important. Next came reduced network costs, which were named either very important or important by 80% of the sample. The figure was 73% for improving indoor coverage and 69% for generating new revenue streams. The results highlight two key trends. One, all the main four Public Wi-Fi objectives are considered important by most of the players, indicating that operators and vendors are targeting a complex mixture of benefits rather than being driven by one overriding motivation. And two, customer experience and QoS are considered vital to any successful deployment, while new revenue streams such as analytics, while very important in the medium term, will only follow once a strong network experience is established. 5. Roaming Roaming is becoming a central aspect of the Public Wi-Fi business model, as users look to roam when travelling – perhaps to avoid bill shock – and in order to find a fully broadband connection wherever they are. There are two important initiatives to simplify roaming – simplifying the process via roaming frameworks, notably the WBA’s ICP (Interoperability Compliance Program); and standardizing hotspots and devices so they can work together automatically. The latter is being driven by NGH and by the Passpoint™ program. While half the respondents own hotspots, 30% of the total have locations available to their customers for roaming. In most cases, providers own at least some hotspots, but 5% provide hotspots purely through deals with third parties such as wholesalers. About half the hotspot owners currently have further locations available through roaming. 40 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • Of the hotspot owners, 28% have networks of over 1,000 locations and six of the respondents have more than one million (the highest number being 5.5 million, at SK Telecom). By contrast, almost 10% of those supporting roaming have access to networks of over one million locations and 38% offer their customers over 1,000 hotspots. In other words, operators are expanding the access they provide rapidly via roaming agreements and as the process becomes simplified and standardized, this trend will accelerate quickly. SK Telecom is a leader in Public Wi-Fi and heterogeneous networks and has 5.5 million of its own locations and eight million available through roaming at home or abroad. The importance of broadening access helps to explain the rising awareness of roaming programs, particularly the WBA’s Public Wi-Fi Roaming Guidelines. Over half (53.5%) of the total base were familiar or very familiar with this. Though there is further work to be done to raise this total further, passing the halfway mark at such an early stage of the program reflects the fact that the market is demanding this type of solution. The interest in such initiatives is unsurprising, given that the ecosystem sees the lack of common roaming standards as the single biggest obstacle to wide-scale implementation of Wi-Fi roaming. When asked to identify the issues they saw as the top three challenges, 52% placed the lack of standards in that trio (Figure 5-1). Seamless authentication, another key issue being addressed by the WBA with NGH and with its Wi-Fi Alliance collaboration, was the second most serious obstacle emerging from the survey, with 51% placing it in the top three. Wi-Fi/3G interworking was the third most selected barrier – again, an important focus of current WBA projects – while inconsistent user experience also ranked highly. 60.0% 50.0% 40.0% 30.0% 20.0% Other Uncertainty about monetization Backoffice interworking 3G/WiFi interworking Seamless Authentication Cost of roaming Lack of device standards Inconsistent user experience 0.0% Lack of common roaming standard 10.0% Figure 5-1 What do you consider to be the THREE most significant barriers to a wider implementation of Wi-Fi roaming? Source: WBA- Maravedis-Rethink survey, Nov 2013 It is clear that the programs adopted by WBA and its partners have already recognized these challenges and are focusing on the priorities set by the players, with initiatives such as ICP, NGH and the joint taskforce with the GSMA. Indeed, the GSMA recently approved a Wi-Fi Roaming Annex that will make it easy for mobile operators to support this. 41 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • While many of the challenges relate to the access network and mechanisms, there will also need to be changes at the back end, in systems such as billing and reconciliation, which will be adapted to cope with multiple access systems and full interworking (Figure 5-2). Don’t Know, 30.5% Yes, 55.8% No, 13.7% Figure 5-2 Are further developments in back end systems (billing, reconciliation etc.) required for effective roaming? if so, please specify Source: WBA- Maravedis-Rethink survey, Nov 2013 Indeed, almost 56% of the ecosystem believe these changes will be necessary to deliver the full benefits of Wi-Fi roaming and less than 14% do not see this as an important element of the market’s development. Specifically, many respondents pointed to the need for seamless authentication, clearing house functions and policy control, as well as a more robust security framework. Some also called for more granular back office systems which could apply different tariffs for Wi-Fi or cellular, for different QoS levels, or for individual times or locations. As standards, multi-technology access and back office platforms mature, it will become easier for operators to build broad hotspot footprints using a variety of methods, from their own build-out to different types of partnership. This is demonstrated in Figure 5-3. Deploying their own hotspots in targeted areas remains the primary method of building a footprint and was named a preferred approach by 64% of the ecosystem. This was followed by partnerships with other providers, such as cablecos (selected by 44%) and by deals with aggregators, both for national coverage (41.6%) and international footprint (32%). 42 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% Other - Please specify Use so-called crowd sourced hotspots Wi-Fi services to leverage free & open Wi-Fi hotspots Consider acquiring one or more WISPs Partner with other service providers such as cable companies or WISPs Build own carrier-grade WiFi in selected areas Use Wi-Fi aggregators for international coverage & services 0.0% Use Wi-Fi aggregators for national coverage & services 10.0% Figure 5-3 What would be your preferred means of building a Wi-Fi footprint (multiple responses are allowed)? Source: WBA- Maravedis-Rethink survey, Nov 2013 Crowdsourced or community hotpots were only highlighted by 20% but this is still quite a high number considering these are a relatively new option. These locations, also known as homespots, are starting to emerge as an important piece in the Public Wi-Fi roaming jigsaw. A total of 73 respondents provided some access to homespots, directly or through partnerships and in four cases, these were already over 500,000 locations despite the recent emergence of this technology. These residential access points, whose owners agree to open up some of the capacity to passers-by or neighbors, will become an important additional source of roaming access in future via carriers’ own home-based installations or third parties. 6. Conclusion: To conclude, 2013 has been a year of significant progress in the public Wi-Fi space and some of the most important advances have been driven by WBA initiatives, especially NGH and ICP. Seamless authentication, roaming and hand-off to cellular networks are three critical elements of creating a consistent, high quality Wi-Fi user experience and as the WBA/Maravedis-Rethink survey highlights, quality of experience is becoming even more important than connection speed or even price in supporting a strong business case. The business models which can be supported by public Wi-Fi proliferate once universal roaming and hand-off can be assured, especially those which involve integration with wireless or wireline network services. As Wi-Fi becomes an integral part of the mobile broadband experience, there will be many new opportunities for service providers of all kinds to harness it for innovation and profit. Looking forward to 2014, there will be some more important shifts. The WBA and other Wi-Fi industry associations have spoken of the need to help the community address business case issues as well as just technical challenges. As many of the technical issues of past years are resolved, industry initiatives will increasingly focus on user experience elements such as seamless hand-off and open access. 43 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • As with any new platform, there have been challenges to the adoption of NGH but with devices and equipment coming on-stream and early deployments taking place, we expect 2014 to see significant adoption, as highlighted in the ecosystem survey. As NGH becomes an integral part of the carrier networking landscape, a host of new opportunities will be enabled, for operators, suppliers, enterprises and consumers. The WBA will continue to play a critical role in ensuring those opportunities are maximized during 2014. Disclaimer: Maravedis-Rethink makes no warranties express or implied as to the results to be obtained from use of this research material and makes no warranties expressed or implied of merchantability or fitness for a particular purpose. Maravedis-Rethink shall have no liability to the recipient of this research material or to any third party for any indirect, incidental, special or consequential damages arising out of use of this research material. 44 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance
    • About the Wireless Broadband Alliance Founded in 2003, the aim of the Wireless Broadband Alliance (WBA) is to secure an outstanding user experience through the global deployment of next generation Wi-Fi. In order to make this a reality, the WBA is currently championing various initiatives in the Wi-Fi ecosystem including Next Generation Hotspot (NGH) trials, Wi-Fi Roaming and its Interoperability Compliance Program (ICP). Today, membership includes major fixed operators such as BT, Comcast and Time Warner Cable; seven of the top 10 mobile operator groups (by revenue) and leading technology companies such as Cisco, Google and Intel. WBA member operators collectively serve more than 1 billion subscribers and operate more than 5 million hotspots globally. The WBA Board includes Arqiva, AT&T, Boingo Wireless, BT, China Mobile, Cisco Systems, Intel Corporation, iPass, KT Corporation, NTT DOCOMO and Orange. About Maravedis-Rethink Maravedis-Rethink is a premier wireless infrastructure analyst firm. We focus on broadband wireless technologies (including LTE, WiMAX, small cells, core and backhaul) as well as industry spectrum regulations and operator trends. Since 2002, Maravedis and Rethink Research have provided clients worldwide with strategic insight to help them achieve key business objectives. Clients can access Maravedis-Rethink' technology, spectrum and market intelligence through subscription-based research services which include disruptive reports, webinars and online databases, analyst support and briefings as well as custom consulting engagements. Maravedis-Rethink has offices in 7 countries across 4 continents. © Copyright 2013 Wireless Broadband Alliance Ltd (“WBA”). All rights reserved. While every effort is made to ensure the information contributed by WBA to this report is accurate, the WBA does not accept liability for any errors or mistakes which may arise in relation to the material contributed by WBA. Acknowledgment Maravedis-Rethink acknowledges with thanks the news items and contributions submitted by Wireless Broadband Alliance and their members through the intermediary of the Wireless Broadband Alliance and all copyright material and trademarks used in this report are the property of their respective owners. 45 Report title: Wireless Broadband Alliance Industry Report 2013: Global Trends in Public Wi-Fi Issue date: 18 November 2013 Version: 1.0 Wireless Broadband Alliance Confidential & Proprietary. Copyright © 2013 Wireless Broadband Alliance