While the convergence between mobile and Internet worlds is potentially very lucrative, there are several challenges operators must manage while expanding their networks to cope with the growth in traffic. Some of the major issues are discussed here.

By Ajay Sahai, Stoke, Inc.
Courtesy of Mobile Handset DesignLine May 09, 2008

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Two recent trends have accelerated the long predicted convergence between the mobile and Internet worlds. The first is the introduction of unlimited data plans and the other is availability of such devices as the Blackberry, iPhones, Nokia's N/E series and USB modems. Because of these two factors a growing number of users are using their mobile devices for several activities in addition to voice and SMS, including:

• Fulfilling communication needs in new ways: Checking personal/work email, IM or posting a message on a friend's Facebook wall using their mobile devices;
• Obtaining/sharing information: Reading the news or searching for information on the internet and/or corporate servers or uploading photos and UGC to social networks;
• Enjoying real-time entertainment: Such as on-demand access to video content.
Consequently, several mobile operators around the globe have announced significant increases in data access service revenues and are experiencing unprecedented growth in non-SMS data traffic volumes. While the convergence between mobile and Internet worlds is potentially very lucrative, there are several challenges operators must manage while expanding their networks to cope with the growth in traffic. Some of the issues operators are facing include:

• Providing the best broadband wireless network coverage, particularly for indoor locations, while keeping CAPEX in check;
• Managing backhaul expenses, since with such applications as video, only a handful of users can consume large portions of backhaul bandwidth;
• Continuing to provide their users with a high level of security, reliability, personalization and ease of use;
• Ensure that operator services/brands are relevant even as they enable delivery of 3^rd party content while participating and contributing to the value chain.

In the long term, operators will have to adopt technologies like long-term evolution (LTE), WiMAX, IP Multimedia Subsytems (IMS), leverage 700 MHz spectrum and evolve their networks towards flat all-IP architectures to meet these challenges. However, as experience from the earlier part of this decade has shown, large wireless network rollouts present major financial risks. Obviously operators would like to reduce their financial risks until the market opportunities mature. However, as mentioned before, Internet mobile convergence has started and networks are already getting stressed. Fortunately, there solutions that can be deployed today that help in the transition to a 4G, all IP network and reduce the overall risk and investments needed in the near term.

One of the obvious options for operators, as they try to overcome these challenges on the journey towards 4G, is Wi-Fi. While traditionally operators have ignored or discouraged Wi-Fi, the dynamics of the handset marketplace are driving leading service providers to include Wi-Fi as a wireless broadband alternative in their offerings. Since Wi-Fi access is already widely deployed; and the interface is increasingly available on the high ARPU handsets, it can be argued a strategy of ignoring Wi-Fi can be risky. The alternative for operators is to embrace Wi-Fi as an option and complement to their network. Further, like UMTS, HSDPA & LTE the 802.11 family of technologies are also evolving rapidly the price/performance ratio for this technology as a complement to the cellular network will continue to be very attractive. The good news for operators is that the right combination of infrastructure and handset hardware and software that enables them to use Wi-Fi, in a manner that supports their 3.5G (or HSDPA) rollouts is available today.

A medium term alternative is Femtocells. Femtocell technology is currently being trialed by major operators and can be used to deliver both voice and data. A major benefit of this technology is that it is compatible with all 2.5G and 3G handsets. While the lack of installed base of these devices presents some business case challenges, it is expected that this technology will coexist along with Wi-Fi.




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