MWC’s ‘break out’ topic for 2010

By the time you read this, the telecom world will likely be preoccupied with Mobile World Congress. Undeniably the year’s biggest trade show focused on wireless, it’s evolved into what many people now consider the biggest, most important telecom trade show of the year. The major network technology issues to take center stage in Barcelona are fairly evident; we identified these in our annual prediction piece earlier in the year. Absent from this list, however, is a theme that stretches across multiple technologies: offload.

Vendors and operators may not always refer to it by the same name. Some will refer to it simply as “offload.” Others will call it “traffic offload” or break it down into a technical enabler such as “local breakout.” Regardless, it’s an important topic for operators and one that it already being targeted by vendors. And to the extent that it may not always be highlighted or called the same thing, it’s all the more important to explore.

And why do we think this will be such a major theme at MWC this year? Because in addition to solving a problem operators have been so vocal about, it touches so many different technologies and vendors from across the wireless networks ecosystem.

• Wi-Fi. The relationship between smartphones and mobile broadband is virtuous. Mobile broadband services might be a prerequisite for getting the most out of an advanced smartphone, but the availability of inexpensive smartphones makes mobile broadband a more attractive service option. At the same time, the success of smartphone adoption has put Wi-Fi into a broader set of end-user devices, opening up the opportunity for operators to take traffic off of their 3G, or even 2G, networks. AT&T made this clear with recent highlights around its subscribers’ Wi-Fi usage, though it’s far from alone in its focus on Wi-Fi; Wi-Fi was bundled together with cellular access in 27% of all European mobile broadband plans (consumer and small business) assessed within our CurrentTRACK Mobile Broadband – Europe Q4 2009 survey. (The CurrentTRACK service monitors mobile broadband services across 17 European markets, representing a total of close to 1000 mobile broadband plans from 60 operators.) Leveraging hotspot access is clearly one model that works for taking data traffic off the high-cost mobile broadband network. Vendors, however, have been quick to sell new ways to leverage Wi-Fi, ranging from BelAir’s positioning of metro-scale Wi-Fi as a critical component of 3G and 4G network upgrades to Kineto’s recent “Smart Wi-Fi Offload” launch. The purpose, however, is the same: to offload traffic onto less expensive networks and less expensive spectrum.
• Femtocells. The end-user femtocell value proposition has been well documented: better 3G coverage at home, better 3G bandwidth at home, potentially less expensive service tariffs. And, where do these cheaper tariffs come from? They are a direct result of offload-based cost efficiencies for the operator, including macro network spectrum offload — keeping RAN-related capex and opex in check; macro network backhaul offload — keeping transport-related capex and opex in check; the potential for local breakout to keep Internet-bound traffic off the packet core. Despite lofty goals around using femtocells to drive 3G usage or build subscriber stickiness, offload remains the foundation of femtocell rationale in the long term, particularly as operators find their macro networks straining to keep up with today’s mobile broadband traffic demands.
• Packet core. When Tellabs announced its planned acquisition of WiChorus, Internet offload was identified as the initial application for the start-up’s SmartCore platform. Announced at the end of January, Stoke’s “Smart Mobile Data Offload” solution made similar promises, with the exception of an upgrade to gateway (GGSN, EPC) functionality. Traditionally, the packet core may not have garnered the attention dedicated to the radio-access network (RAN). As mobile broadband traffic ramps up, however, its importance is set to grow thanks to more users, more devices, more bandwidth per user and operator aspirations around traffic monetization. As these sessions and bandwidth expectations materialize and operators discover how to monetize them thanks to network-based applications and traffic insights, keeping low-value data traffic off the packet core will be critical for keeping capex in check and allowing the packet core to operate without being over-burdened. It’s not surprising, then, that vendors beyond Stoke and Tellabs have telegraphed their own plans for packet core offload solutions — plans that should come to light at or around the big show in Barcelona.

As with so many big themes, there is more than one key implication. In the RAN, a reliance on small cells or Wi-Fi for offload will need to be balanced against a need for reasonably simple network management and service continuity, making SON something that needs to quickly evolve from “self organizing” to “self optimizing.” In the core, diverting traffic from the gateway layer could limit the predicted importance of the evolved packet core — or, at least, predicted EPC revenues. Of course, expanding the concept of offload could also make the wireless data gateway more important than ever, if it is used to support content caching or to drive offload at the edge of the network (requiring more gateways and more packet core capex). And while technology may be able to make all of this work, regulations around things like lawful intercept and content inspection need to be considered in order to keep users safe and operators in line with the law.