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Your Awful Cellphone Service And The Distribution Of Data

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We, especially those New Yorkers and San Franciscans, are well aware of the strain smartphones (one in particular) place on mobile operator networks (one in particular). As smartphone offerings increase and diversify rapidly over the next three years, this same strain threatens networks across the nation (the state of international operators is beyond the scope of this post). Although anecdotal evidence points to pockets of improvements in urban hot spots today, operators have been unable to provide consistent service in the face of subscribers’ increased demand for mobile data. Add to smartphones the increasing number of tablet and portable gaming devices, and it is clear that operators face a crisis of data deluge. The rising cost of maintaining the network and the services to retain subscribers will soon outpace any revenue generated by these same services.

Manufacturing and installing new cell site hardware is cost-prohibitive and bounded by societal and geographical constraints. Furthermore, operators have reported that in urban centers it is often the case that 80% of data is being managed by just 10% of all cell sites. Determining usage statistics in real-time would be a first step towards managing this power-law phenomenon.

Meanwhile, subscribers’ perception and expectations around mobile data has shifted in the past two years. Data is now an always-on service. It is expected to be available and timely, delays/drops lead to subscriber frustration.

Alright already we get it. Mobile service sucks and will suck even more. Soon.

Enter data offload, the process of diverting mobile data traffic off the operator’s 3G networks and onto WiFi/WiMAX/femtocell networks, in a way that is completely transparent to the end-user. Companies that offer data offloading services are usually highly integrated into the operator’s backend infrastructure. The idea behind data offloading has been around for years, but companies like Stoke have been more aggressively moving into this space since 2009. Operators’ demand for data offload is up in 2010, and will continue to see major growth driven by the potential for significant annual savings by 2013.

The Game

1. 3G to WiFi. Some folks, like AT&T, are already providing this service to iPhone users for a fee, having installed about 20,000 base stations in urban centers. For example, the streaming content on a subscriber’s mobile device in a congested urban environment may be automagically pushed to the operator-owned base stations in the vicinity, completely seamlessly. The handset in turn detects the presence of the WiFi network and using its connection manager, redirects itself to the base station. No logins, no passwords, no interruptions. Verizon has deals in place with Boingo, looking to offer competitive 3G/WiFi bundles. The service provider requires a holistic view of all networks involved and corresponding subscriber entitlement information.

2. 3G to Femtocells. Femtocells are micro base stations typically located indoors. These devices complement WiFi stations that typically have a wider broadcast range required of outdoor data offload. About 70% of mobile data usage occurs indoors and some of the worst data connections and the most dropped calls occur indoors. Most carriers already make femtocells available for purchase. The uptake of these devices will only increase, with multiple devices expected in congested office environments. Again, the technological challenge service providers face here surrounds secure transfer of subscriber entitlement data.

3. Contextual Offload. This ties back to the point about contextual personalization above. Real-time insight into each subscriber’s mobile plans and current usage, and access to each subscriber’s device, allows data offloading services to implement real-time, tiered offerings . For example, premium subscribers can be given preferential access to the 3G network in a congested area, while a subscriber on the basic plan is offloaded to a local WiFi connection. Furthermore, these data offloading services have access to every device. This means they can remotely turn on your WiFi connection (if it is off), and redirect your handset to a base station for offloading.

The Rules

  1. Subscriber experience. Data offloading can not encumber the mobile experience or make vulnerable the subscriber’s personal data, it must be reliable and transparent. Integration and federated subscriber data across networks is also a necessity.
  2. Location. Of the mobile devices and the cell towers. Data offloading services must be aware of WiFi base stations and cell sites within the vicinity of the mobile device in order to effectively offload specific subscriber usage from heavily used cell sites to relatively free WiFi base stations.
  3. Real-time context. In addition to location, data offloading requires the ability to distinguish amongst various subscribers, their devices, their usage plans, current usage, and local network conditions. Given these and other inputs, the solution will decide which subscribers/applications should be offloaded.
  4. Security. As subscriber authentication data is cached or made available to multiple networks, the subscriber’s privacy and personally identifiable information (PII) must remain secure at all times. Data offloading increases opportunities for packet sniffing and hacks to access potentially very sensitive information.

The players

That the telecommunications industry is an intricate tangle of relationships is no secret. Various market segments and companies have skin in the game. As mentioned, data offload is not a new concept, but new challenges have caused 3G/4G operators to take notice of companies offering these services. A fragmented market made up of many small-to-medium sized outfits have gained traction by solving a real, pressing problem. In fact, there has already been some level of consolidation in the market. Recent acquisitions include WiChorus by Tellabs, Camiant by Tekelec, and Starent by Cisco. Others like Stoke and Bridgewater, continue to forge leadership roles in this market, partnering with and competing against vendors such as Cisco and Nokia Siemens Networks. Cisco is increasingly looking to join the conversation between telecommunication companies and competitors like Ericsson, Huawei, and Alcatel-Lucent.

Currently there is enough innovation and unique business requirements to support this fragmented market. As this space matures in terms of understanding customer usage and increasing adoption of 3GPP standards across operators, further consolidation is inevitable.

Who else wants in?

The market is further complicated by wireline, cable operators. These services are looking to take advantage of similar technology by adding WiFi support to cable infrastructure, onloading new services onto the WiFi network in urban centers and household environments. By doing so, these players are hoping to compete with typical 3G wireless services.

Your Future

The good news is that data offloading will alleviate many of the problems subscribers currently face when using their mobile device. Innovation is good. Distribution of data means information and content will be increasingly ubiquitous and social, no matter our location (observe NYC’s recent decision to equip the subway system with WiFi). As the march towards 4G continues, data offload will become increasingly critical to sustaining local availability and minimizing network latency.

With these innovations and freedoms will come other forms of constraint. Subscribers will need to be more cognizant about exactly what pieces of PII and other sensitive data are being transferred or shared across networks. Security is paramount.

Using data offload technology, operators will be only more equipped with the information necessary to introduce stratified services. While operators are currently making decent buck off subscriber data plans, this revenue will level off relative to network costs. To offset these costs, operators will push tiered data plans and services — indeed, Google and Verizon made news this week by stating net neutrality guidelines need not apply to wireless networks. The exact meaning of this statement is vague and the extent to which Google will go to restrict certain services remains unclear, although one could surmise this to be a tug-of-war between the everywhere-ness of data and the paywalls. When data is so distributed, who will control the delivery of content?

Convergence (both fixed-line and mobile) will increasingly provide companies with a singular view of subscribers across screens (laptop, mobile, tablet, TV). Google TV and Google’s recently introduced Chrome-to-Phone feature are just the tip of the iceberg in terms of technologies that will pull user-specific data from across multiple devices and/or networks, construct a credible profile of every person, and generate the most relevant, context-aware content.


Written by Girish Rao

August 13, 2010 at 15:42

Posted in Uncategorized

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