Operators looking to wifi offload but vendors’ solutions still lacking

Mobile operators are looking past the negative revenue implications of using wifi offload due to concerns over the sheer growth of data traffic. But although the majority of infrastructure vendors are now including wifi offload solutions in their product portfolios, those solutions do not fully meet operators’ needs, according to Ovum.

The analyst firm conducted an operator survey on wifi offload and found that many carriers are still looking for features that are not currently available on a large scale. Over half of them expect session continuity when moving between wifi and cellular networks. In addition, over 90 per cent are also looking for a device-based policy solution that selects the best network – be it 3G, 4G or wifi – based on cost, performance, and other policy-driven features.

The survey also revealed that the majority of operators expect to work with other hotspot providers to build out their network footprint, according to the survey. They are willing to work with what they call “untrusted” or “non-controlled” wifi networks – such as free public networks that aren’t controlled by an operator, often found at hotels or libraries.

“Just a few years ago, if one was to ask mobile operators about wifi, their responses would most likely have been negative, but this has long changed with rising concerns around how to manage the growth of mobile broadband,” says Daryl Schoolar, principal analyst in Ovum’s network infrastructure telecoms team. “Now the issue is how best to build up sufficient network resources to manage wifi offload.”

Other findings from the survey include that although most operators thought Automatic Network Discovery and Selection Function (ANDSF) and Hotspot 2.0 were important, only a small minority said they would deploy those solutions prior to their full standardisation, even if the vendor selling it said the solutions were fully compliant with the standard. And less than half of the operators surveyed said their companies were taking any measure to evaluate application performance before allowing those applications to access their networks.

“What compliance actually means appears to be a big issue here. For example, most respondents answered ‘Don’t know’ when it came to their willingness to deploy pre-standardised compliant solutions. Greater information on what compliance actually means could reduce the number of ‘don’t know’ responses,” said Schoolar.

However, Informa Telecoms & Media’s principal analyst Thomas Wehmeier warned that operators exercise caution when formulating  strategies for wifi offload. While he conceded that it is going to play an important role for operators in the future, widespread deployment of wifi outside of the home may not deliver the sustainable and profitable future their shareholders and investors demand.

“One of the principal conclusions I have made from my research is that many operators are seemingly “blindly” deploying wifi without a clear understanding of the overall impact of their investments on their business in the future, especially with regards to the effect on mobile data usage from their 3G/4G networks,” he wrote in a recent article.

“Indeed, I am increasingly of the opinion that much of today’s investment into public wifi from operators is led by apparent short-term thinking about the role that wifi can play in alleviating traffic bottlenecks on their networks.”

David Furstenberg, chairman at wifi backhaul solutions provider NovelSat, believes that in order to counteract the pressure on profitability, operators need to rethink their business strategy on a daily basis.

“The nature of the revenue stream for wifi is changing and will be changing dramatically; in my view it will go to the people who own the pipes,” he said.

He added that trends that the market is currently seeing will alter how operators tailor their business models to capitalise on increased wifi usage.

“The young generation for example, tend to not watch TV but use video-on-demand, so I think that the challenge is similar. Wireline operators have been living with this challenge for a very long time, and I think companies will rethink their business strategy and find new ways to improve their bottom line.”

“I believe anyone that will take two steps back and rethink the way they appraoach the challenge of making wifi  profitable will find new opportunities.”

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One comment

  1. Avatar elijah adegoke 26/07/2012 @ 6:15 pm

    Interesting results…Shows the importance of surveys…Hopefully, MNOs’ would still be more open to try out new options(at some reasonable risk), and much more work is required in the R&D of interworkingWirelessNetworks

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