Wedding WLANs to mobile nets

Mar 19, 2003 12:00 PM, By Phil Roberts

The heat is on, and mobile network operators have seen the Wi-Fi light. Instead of doing battle with beefy broadband wireless data nets, mobile operators are embracing the idea that their subscribers are enamored with the big bandwidth and the convenience wireless LANs (WLANs) provide in airports, coffee bars, hotel lobbies and other data hot spots.

WLAN operators have had difficulty making their business models work, though not because end users don't love Wi-Fi. Early WLAN operators were simply unable to build enough momentum to sustain their businesses. They had a limited array of hot spots and their pool of potential subscribers was limited to power users who were not keen on receiving yet another bill from an additional communications provider.

And although WLANs are appealing, users were not willing to pay a premium price for this service. As a result, WLAN providers were not able to charge customers enough to cover their costs of acquiring and billing subscribers, marketing and branding, and building out expensive infrastructures, and still make a profit.

The WLAN landscape is entirely different for mobile network operators, which already have subscribers, billing systems and marketing departments in place. Mobile operators have begun scooping up failing WLAN companies and their infrastructures at fire sale prices. Other operators are partnering with aggregators to expand their virtual infrastructures to include hot spots managed by many different companies.

The next step

Although acquiring access to WLAN infrastructure is an important first step, it is by no means the only one mobile operators need to take in order to make their WLAN endeavors profitable. Mobile operators must take the next step and marry their 2.5G and 3G mobile networks to their WLAN networks. The two networks, which today operate independently, must be joined in a way that enables mobile operators to offer their subscribers the mobility and seamless data networking experience they have come to expect with their voice service.

Without a seamless connection to WLANs, today's subscribers who plop themselves down at their local coffee house/hot spot for an afternoon of high-speed Web surfing must do more than sweeten their latte to their liking and switch on their pocket PCs. Users need to consciously switch their access device from the mobile network to the WLAN, and often pay extra to access the WLAN. Subscribers with a monthly account must enter their user name and a password before they can begin using the mobile operator's "other network." The experience harkens back to the day when cell phone users had to enter a credit card number whenever they "roamed" out of their home coverage area and when power users had to have a cell phone and a pager to stay connected. 

Mobile operators are moving aggressively to integrate these networks; however, the primary link that wireless providers have established between their subscribers, their WLANs and their mobile networks is with their authentication and billing systems.  These initial steps will not solve the entire challenge facing network operators and subscribers looking toward seamless services. Even when charging facilities are integrated, once a device connects to the WLAN, the mobile operator becomes nothing more than an Internet service provider for the duration of that connection.

Once the switch is made, the access device is no longer connected to the mobile network and has no access to the data services and mobility it provides. The subscriber enjoys a seamless billing experience, and can access WLANs owned by different operators, but that's where the linkage ends. Additionally, if a mobile operator loses the connection to a subscriber who is accessing WLANs through a third party, the operator is unable to push personalized mobile data applications to the subscriber at the hot spot. This results in lost revenue for the mobile operator and frustration for the subscriber, who is accustomed to receiving personalized messages everywhere else.

Subscribers also sacrifice true mobility because they must proactively link up and unlink from the WLAN and stay within the coverage area.  It's a safe bet that this type of "dial" experience is going to drastically limit WLAN uptake. As it exists today, the service will appeal only to business users with PCs who are interested in traditional, and ultimately low-margin, Internet access. 

Seamless integration

Mobile operators that want to make their subscribers' WLAN experiences seamless, and in turn foster greater acceptance and boost revenues, are taking steps to fully integrate their WLANs and mobile networks. A unified network enables service providers to offer customers a cohesive set of services, regardless of the access device they use to link to that unified network. If mobile operators enable subscribers to remain connected to their chosen set of services and to roam freely between their mobile network and WLANs, the mobile operator never turns into "just an ISP" and instead delivers a differentiated service in its customers' eyes.

Wireless providers also gain an operational advantage from unifying the two networks. They can improve the capacity of their mobile networks by automatically offloading subscribers that roam into hot spots onto roomier WLANs.

Given that manufacturers of wireless access devices are beginning to roll out dual-mode equipment that will switch to the hot spot network automatically (based upon user-configured or operator-configured preferences), now is the time for operators to ready infrastructure to meet this market demand. 

To accomplish this integration, mobile operators need to deploy a mobile services core that can service multiple access technologies and support the seamless delivery of services to users as they move between these access technologies. Called a universal mobile services core (see Figure 1), the key elements of this approach include a mobile services delivery node that, when deployed in the mobile operator's core network, acts as a services anchor point for mobile subscribers. As subscribers roam, the system uses mobile IP to determine their location and to deliver all of their mobile services to them via whatever network they are connected to at the moment (see Figure 2). It also serves as a service selection node, dynamically selecting the services to which that user has subscribed, and tailoring them to the access network being used at the time. For example, some users may choose to compress all of his/her files before they are transmitted over a 2.5G infrastructure, and may prefer to not compress files when accessing the mobile core over a WLAN.

Mobile network operators that deploy a universal mobile services core will be able to provide all users of PDAs, as well as mobile computing devices of the future, with the type of mobility they have come to expect from their cellular phones. Many future handhelds will be used both as computing devices and as cell phones. Operators with a universal mobile services core in place will be able to market a unified set of services to more than just the small set of power users who are in need of mobility between GPRS, WLAN, and corporate VPNs today.

Alternatives: A partial investment

Some mobile operators may decide that the set of users that needs this type of mobility today is too small to justify the cost of deploying a universal mobile services core in their network today. This assumption will end up costing them a bundle in the long run.

Enterprises have the alternative to provide their power users with the mobility they desire by installing a "home agent" solution in their own networks and in their employees' end devices (see Figure 3). The operator could also choose to offer the enterprise-based solution as CPE for the enterprise users. In both cases, this creates many problems for mobile operators.

In this scenario, the enterprise becomes the subscriber's primary network provider. As an intermediate network provider, the mobile operator is unable to introduce value-added services to these enterprise home-agent based subscribers. The mobile operator is effectively cut out of the services value chain because it can no longer offer these subscribers corporate VPNs, differentiated billing, instant messaging, or multimedia messaging. Corporate enterprises are free to change operators at will since they are not receiving any differentiated value from their mobile operator.

Also, the GPRS network gets the short end of the stick when an enterprise-based solution is deployed. Traffic transported between the mobile network and the enterprise network is typically tunneled within both IPSEC and mobile IP over a bit-rate-limited GPRS link. This tunneling dramatically limits GPRS network performance and hinders home-agent-based end users' experience with that mobile network.

Finally, only the largest enterprises--those with the highest numbers of IT support and irrefutable business cases--are able to take advantage of this type of additional, "boutique" IT investment. Small and medium businesses do not have the IT staff or a mobile subscriber base that is sufficiently large enough to deploy the service. And while dual-mode capabilities will be standard in the data devices in the near future, operators delivering only enterprise (or "customer premise equipment" based) solutions will be simply unable to offer seamless services for the consumer, and will miss out on that market segment. Mobile operators who decline to deploy a universal mobile services core and instead place the mobility problem in the enterprise's lap are leaving important sets of customers out in the cold.

First-mover advantage

Many operators today are taking just the steps required to integrate basic access and billing infrastructures--and as a result, the operators taking these steps have limited chance to differentiate their service offerings. It is well known that being the first mover that successfully delivers a product or service in a successful market space gains the high majority market share and, through this dominance, an even higher percentage of the market profits. Operators looking at investing in WLAN today have two choices:

1. Be a first mover and participate more than fully in the benefits of WLAN. 

2. Be a follower, and risk losing out on critical, high-margin, value-added service revenue.

Phil Roberts is Director of Mobile Network Architecture for Megisto Systems.

Visit Megisto Systems online.