What excites Muthu Logan, the President & CEO of Chennai-based Brovis Wireless Networks Pvt Ltd (http://bit.ly/F4TBrovis) is that entrepreneurs in even small towns now have the opportunity to exploit the power of various wireless technologies, especially WiFi, the proven wireless broadband workhorse, along with 3G, the new mobile broadband entrant. In the ‘smart wireless framework’ that Muthu describes, at a recent interaction with Business Line, there can be many beneficiaries apart from equipment suppliers like BroVis. “Such as, the upcoming hotspot service providers and established telcos/mobile carriers; and, the mobile subscribers (end users) stand to benefit the most, in the wireless ecosystem,” he adds. Our conversation continues over the email.
Excerpts from the interview.
As is widely known, WiFi can be used for plain vanilla Internet access and is less capital-intensive. But how can a start-up or an established WiFi service provider exploit the new technologies to give more service and generate differentiated revenues?
Using the right products and backend infrastructure management/gateway capabilities, a WiFi hotspot service provider can provide smart WiFi mobile access that enables multimedia networking, HD-gaming applications and, more importantly, 3G data-offloading with a cloud networking setup.
What’s new in this scenario of 3G data offloading?
All the cellular carriers are taking a new look at WiFi. Years ago, they didn’t want WiFi to take traffic off their networks. Now, they have a deep penchant to offload traffic off their expensive 3G networks because people are using the network in completely different ways: they’re streaming video or listening to Pandora [Radio] all the time, instead of sending a quick SMS message. They’re doing a whole Facebook upload of photos and videos to their friends, thereby overloading the mobile data network, especially during peak periods. This builds up a solid demand for hotspot service providers with adequate broadband WiFi network capacity to take the 3G data processing burden from mobile carriers/telcos.
Can WiFi and 3G really coexist?
Yes, WiFi and 3G can coexist very harmoniously. As we know most smartphones support both 3G and WiFi access. Devices such as the iPhone are smart enough to switch between 3G and WiFi using network preferences.
An inter-working WLAN client application on the handset offers the ability to do two functions. First it detects the optimal radio path and has the capability to direct a switchover. This is seamless to the application and presents a transparent view to the user. Second, it establishes connectivity to a WiFi-enabled network gateway which provides operator-level control and management of the traffic flow, be it to the Internet or an operator-hosted service. So in this situation, an end user streaming video can be offloaded to a WiFi channel from the 3G network.
What are the opportunities that hotspot providers can monetise?
The rationale for 3G data offload comes down to one simple thing: end-user demand. With mobile data traffic set to double in each of the next five years, and 3G smartphone shipments forecast to grow much larger, the traffic burden on 3G network capacity is exponentially increasing. It is also clear that smartphone usage is concentrated in indoor locations that are expensive to reach with high-bit-rate services using traditional macro cellular network architecture, but which can be served very cost-effectively using smart wireless framework. Hotspot service providers can negotiate revenue share or proven lease arrangements to utilise WiFi capacity in a virtualised manner without adding undue capital expense.
How will end users benefit?
Carriers can drastically reduce capital expenditures by offloading 3G traffic onto WiFi, thus passing on the savings to end users in terms of reduced billing over the long-term. The end user churn rate will reduce as the network performance increases substantially on an overall basis. Bottom line: End users stand to gain the most in this scenario.
Will there be any security issues? Monitoring issues?
No, absolutely not. The core function for these capabilities in the WiFi network is in the powerful security authentication system. The subscriber’s authentication data for the 3G network resides in the mobile control centre. There are proven techniques to seamlessly integrate WiFi and 3G authentication thus enabling secure handover, metering of usage, and many other back-end functions.
On the revenue models that you foresee.
Technology is of no value if it does not provide the means of revenue generation for all the players in the ecosystem value chain. In the scenario that I foresee, the WiFi hotspot service provider gets the ability to generate more revenues by opening up more of his capacity for use by the carriers. He can do this on a revenue-sharing basis or lease/rental payment basis. And, of course, there is room for more innovative business models here.
Second, the mobile carrier gets to benefit immensely by offloading a good portion of the data-networking needs from their expensive 3G networks to cost-effective WiFi networks. The burden reduction is valuable for the carriers. Lastly, the end user in the ecosystem value chain benefits the most through rich user experience and reduced billing in the long-term.
Will special training be needed for the WiFi providers?
Minimal training will be required to set up the management capabilities; and an integration mechanism will have to be planned out with the carriers. In most cases, mobile carriers/telcos have a “cookie-cutter” approach to these network integration needs.