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Mobile Hotspots

Novatel MiFi 2200

A Hotspot, as defined in Wikipedia, is a site that offers Internet access over a Wireless Local Area Network (WLAN) through the use of a router connected to an Internet Service Provider (ISP). Hotspots typically use Wi-Fi technology for the wireless network.

A Mobile Hotspot is a hotspot that uses a mobile link to connect to the ISP. This mobile link could be of any technology, for example GSM, CDMA, 3G and 4G. Using 2G technologies for this purpose makes little sense, as the achievable speed is too slow. Therefore, mobile hotspots typically use faster technologies, i.e. 1xRTT/EVDO, EDGE/UMTS/HSPA, WiMAX and LTE.

With the announcement of Sprint in this year’s Consumer Electronics Show (CES) in Las Vegas last week, there are now already a few very interesting mobile hotspot products.

Novatel MiFi 2352

The product category of mobile hotspots was practically created in December 2008 with the announcement of MiFi by Novatel Wireless. During 2009 Novatel released too MiFi products – the MiFi 2200 for the CDMA/1xRTT/EVDO mobile technology, and the MiFi 2352/2372 for GSM/GPRS/EDGE/HSPA. The newly announced Overdrive product from Sierra Wireless is for CDMA/1xRTT/EVDO and WiMAX.

All these products are very elegant, light and small, and are equipped with internal batteries that provide around 40 hours of standby and 3-4 hours of active use on a single charge. They weight between 59-128 grams, and the dimensions are 60-80 mm (length) x 80-100 mm (width) x 9-15 mm (hight). They can all support up to 5 Wi-Fi devices simultaneously, and provide high speed connection to the Internet over their broadband mobile link, with peak rates of 3.1 Mbps / 1.8 Mbps (Download / upload) over EVDO, 7.2 Mbps / 5.76 Mbps over HDPA, and 10 Mbps / 4 Mbps over WiMAX.

Sierra Wireless Overdrive

These are extremely portable devices. They are designed to provide Internet connectivity to any Wi-Fi enabled device practically everywhere, removing the need for dedicated USB/PC-Card mobile modems, and supporting also devices that cannot be equipped with such modems, e.g. connected portable game consoles. It can be used as the Internet connection at home or temporary accommodation, with no cabling or installation necessary. Just turn it on, and all your Wi-Fi enabled devices connect to the Internet automatically. It can be used while travelling by car or train to surf the web and connect portable game consoles for online gaming. It can be used to setup a connected mobile office in a hotel room or airport lounge.

Broadband data service in Metropolitan Areas

Broadband wireless technologies evolved during the last decades to a point where mature solutions exist for many different network configurations – fixed point to point, fixed point to multipoint, mobile. These solutions are used today for practically all types of broadband applications – cellular networks for mobile broadband; WiMAX for fixed, and lately also mobile, broadband access; point-to-point microwave links for backhaul; WiFi and femtocells for short range broadband access; WiFi for metro broadband networks. In parallel, wireline broadband technologies have also developed, and there is now a variety of such solutions – cable modem over CATV networks, xDSL, Ethernet over copper, fiber-optics FTTx solutions.

In some situations the wireless solutions are the only ones that make sense – for example for outdoor mobile broadband access, or for bringing broadband access to remote or hard to reach locations. There are a few applications, however, in which the high power wireless solutions are in clear disadvantage relative to competing wireline solutions, potentially in conjunction with low power wireless for short range untethered access.

One important and extremely lucrative market for communications services is broadband access for homes and offices in metropolitan areas. Many different solutions compete in this market, employing both wireline and wireless technologies – CATV, xDSL, FTTx; cellular 3G, HSPA, LTE; WiMAX. This application is a high profile example in which the wireless solutions are of substantial disadvantage.

  • RF spectrum is a scarce resource, and as the traffic volume of broadband data grows it reaches saturation. Allocation of additional spectrum is in many cases not possible, and even if possible it requires lengthy regulatory proceedings. The same spectrum is used for mobile services, where it has no alternative. Consuming this resource for indoor services, where there are alternatives, is a waste of deficient resource.
  • Most, if not all buildings in metropolitan areas are already connected to some wireline networks. Providing broadband access over this existing infrastructure is relatively easy and low cost.
  • Indoor coverage by macrocell wireless networks is difficult, and this is where most of the traffic is generated. Moreover, indoor users have disproportionate effect on the macrocell network, so that just a few such users cause service degradation to all other users in the cell.
  • Wireline data rates are typically higher than wireless.
  • If untethered access is desired indoors, WiFi and femtocells represent an optimal solution – they allow very dense reuse of spectrum, they support very high data rates, and their cost is low.

As the consumption of broadband data, and particularly mobile broadband data, surges, it becomes inevitable to convert more and more of the indoor traffic to wireline access, freeing the wireless spectrum for applications that have no alternative – especially outdoors.

The Destiny of Mobile Data

It is already well established that the usage of mobile data services is growing fast. This traffic is generated mainly by smartphones and laptops with PC-card or USB modems. It is safe to assume the demand for mobile data will continue to grow in the forseeable future. The natural evolution is that laptops and netbooks with embedded mobile modems will become common. It is also clear that more and more people will learn to surf the web from their handset and will very soon discover the convenience of using the web applications they love whenever they have a spare moment, no mater where they are.

This trend puts mobile operators in a painful dilemma. On one hand they are very happy to see the increase in demand for their new services as the market of traditional voice minutes matures. On the other hand their networks are already starting to choke on this excessive traffic, and the investments necessary to increase their capacity are huge. They are faced with the phenomenon of revenue-cost decoupling (see diagram), where the increase in revenue cannot cover the added cost.

Data Revenue-Cost Decoupling

According to a recent article in the New York Times AT&T is among the first to face this dilemma. It is the exclusive United States carrier for Apple’s iPhone, whose owners are big users of data services. It is already experiencing degradation in service quality for both voice and data.

Apparently, there are just two ways to go – increase revenue and reduce cost.

  • On the revenue front, there are basically two sources – data traffic, and advanced services. The basic service of mobile data connectivity is doomed to be a dumb-pipe service, just like landline data connectivity is. Subscribers pay a monthly fee and receive simple data conenctivity over the mobile network. The question of whether traffic volume caps are applied is a detail, and in any case if the volume cap is generous enough only a very small fraction of the users are affected. Opportunities do exist in advanced services, such as the sale of content, application stores, location based services and so on. Mobile operators are best positioned to offer such services, the same way landline DSL operators offer additional services such as IPTV.
  • On the cost front there are three fundamental sources – natural decrease of equipment cost as it matures; improvement in technology that increases the capacity of the wireless channel, e.g. LTE; and increasing the reuse factor of the wireless spectrum, e.g. by using smart antena technologies and space diversity, and by deploying smaller cells.

The bottom line is that mobile data services have many years of growth ahead of them, and the operators that make the right investment decisions along the way will be the ones to enjoy it.

The potential of femtocells

In a recent article in Fierce Wireless Peter Jarich of Current Analysis explains why he still does not have a femtocell. Going through the different arguments, I am even more convinced that femtocells have a bright future.

Here is a short summary of the contrarian arguments.

  • Femtocell offers are not mature, they are limited to 2G, and are very scarce
  • Coverage and capacity are not good value propositions, as consumers are convinced they are already paying for it
  • Coverage is not a problem for most users, as densely populated areas have good coverage, and since coverage at home can be a prime buying criterion for selecting a mobile operator
  • Capacity is also not a problem for most users, since most of the mobile data traffic is generated by devices that support WiFi, and since many of the most popular mobile data applications do not require a lot of bandwidth
  • Cheap voice is not an inherent feature of femtocells, and in any case voice services are already relatively inexpensive, with many different formulas of unlimited calling
  • No investment in marketing, which leads to confusion in the market, and requires intentional action from the user to discover which offerings exist

I do not agree that coverage and capacity are not real problems. As for capacity, it is a fact that mobile metworks around the world experience a surge in mobile data traffic, and this trend is sustainable and is expected to continue. As for coverage, this is not an absolute thing. Even though the coverage is good enough for voice traffic, that consumes very little bandwidth, it may not be good enough for high bandwidth data services. Moreover, the higher frequency 3G and 4G spectrum has less capability to penetrate walls, therefore the problem of coverage is expected to be even more serious for the higher bandwidth 3G and 4G data services.

The femtocell market is in its infancy. Operators are experimenting, studying the potential and trying to define wining offerings. With time the technical problems will be solved, 3G and later 4G femtocells will become available, and operators will determine their marketing strategies. At that point the service will be extended to many more markets, and clear marketing messages will be heard. Operators that succeed to create profitable offerings that are beneficial to their users will see a steep takeup. I am confident such offerings can be created.

Femtocell FMS in the Enterprise

In the previous post I explain in short what Fixed-Mobile Substitution (FMS) and Fixed-Mobile Convergence (FMC) are. FMC has been around for more than 5 years, but has never achieved wide enterprise adoption. In a recent article in RCRWireless Josh Holbrook of the Yankee Group claims that FMC has proved to be a failure in the enterprise, although the functionality it enables is compelling and the technology is mature.

Femtocells represent a new opportunity for FMS in the Enterprise. They provide the same functionality of FMC, but with a few critical advantages. One is that femtocells are controlled and managed by the cellular operator. Another advantage is that they work with any mobile handset, and not only with the small selection of UMA-enabled handsets.

An interesting example is the enterprise GSM service of Spring Mobil in Sweden. It was founded in 2002 with the goal of providing FMS services to the Swedish Small and Medium Enterprise (SME) market, and started full-scale commercial operation in 2005. Using femtocells in the customer premise, Spring Mobil offers a complete FMS service with the full range of PBX functionalities inside as well as outside of the office.

Spring Mobil is the first in a group of similar operators called OnePhone. OnePhone has recently announced a joint venture with Dutch KPN to launch its service in Germany. It is targeting enterprises with 30-1500 employees, and intends to achieve “a double digit percentage market share in Germany’s business customers’ segment.”

OnePhone appear to be early movers in a market I believe has great potential. It will be extremely interesting to follow-up on their progress.

Femtocells and Fixed-Mobile Substitution (FMS)

Fixed-Mobile Substitution (FMS) – the use of a mobile phone instead of a fixed, wired telephone – has long been a desire of mobile operators, a way to increase addressable market and revenue. One mechanism to facilitate FMS is Fixed-Mobile Convergence (FMC) – the use of dual-mode handsets with both cellular and WiFi connectivity, and handoff between the two. When WiFi is available, FMC uses it to route the voice traffic between the handset and the core of the cellular network, without loading the scarce radio spectrum resource of the macrocell radio access network (RAN). The standard technology for FMC is the Generic Access Network (GAN), originally called Unlicesed Mobile Access (UMA).

A key barrier to the adoption of UMA is the small selection of handset models it can work with. UMA/GAN only works with UMA-enabled dual-mode handsets. There is currently a range of only around 30 UMA-enabled handset models. This is a very small number, compared for example to the 726 HSPA[&#8224] handset models that exist today accroding to the Global mobile Suppliers Association (GSA).

And this is where femtocells come into play. They provide the same functionality as UMA/GAN, of offloading traffic from the macrocell RAN, but with the critical advantage of working with any handset an operator supports. Consequently, femtocells create a new promising opportunity for mobile operators to launch and succeed with repackaged FMS offerings.

[&#8224] High Speed Packet Access (HSPA) is the collection of two enhanced 3G mobile telephony protocols – the High Speed Downlink Packet Access (HSDPA), also coined 3.5G; and the High Speed Uplink Packet Access (HSUPA), also coined 3.75G.

Femtocell 2009 Shipments

According to a recent press release by ABI research, about 350,000 femtocells will have been shipped during 2009. This number is bound to be quite reliable, as it is published in November. It is a 55% reduction of the forecast of 790,000 published just 6 months ago.

As admitted by ABI research, carriers refused to share their reasoning. Common factors that are frequently mentioned as adversely impacting the adoption of femtocells are:

  • The business case for femtocells is not clear, as clients are reluctant to paying extra for coverage and capacity, which they expect to be an integral part of their mobile subscription
  • There is a fear that femtocells may cause excessive interference in the macro network
  • The complications involved with installing, managing and supporting a large number of network infrastructure devices at customer premises

Nevertheless, ABI research remain positive about femtocells, and conclude that they still believe in the potential of this market for the longer term.

I personally am a strong believer in femtocells. Early forecasts are occasionally too optimistic, and it almost always takes more time than anticipated for new technologies to mature and ramp-up. I see femtocells as a disruptive technology that has the potential to change the mobile service in many ways. It will take time for the technology to mature, and for the market to discover their full potential, but it will happen. More on that – in future posts.

Mobile TV is not picking up

Recent news articles indicate that mobile TV service is not picking up. According to Rapid TV News most European telcos have abandoned their plans to promote mobile TV service – be it through the DVB-H broadcast technology or through 3G data channels. FierceWireless informs that after having trialed live mobile TV service for 12 months, the BBC decided to halt it and initiate a wide review of its plan of syndication of linear TV channels to mobile and other platforms. Two facts are stressed as related to this decision – the small number of users attracted by the service, and the ongoing success of BBC’s existing iPlayer service, which is already available via 3G and Wi-Fi.

In my opinion this development is no surprise. I see at least two very strong reasons why mobile TV service is a very hard sell.

One is the lack of target audience. What is the target demographic for this service? Potential viewers can be divided into two broad groups – the younger generation and the older generation. The younger generation has completely adapted to using modern technology as part of daily life. They can easily operate a mobile phone to tune to mobile TV if they want to, however they have a strong tendency to view content-on-demand and time-shift TV rather than linear TV. The older generation is the natural audience of linear TV, however educating them to watch it on a mobile phone rather than on the TV set in the living room is a tough task.

The other is the achievable quality. TV sets and PCs provide a much better viewing experience than a mobile phone can. The screen is much bigger and shows much more detail, and audio reproduction is better. Although it is very desirable to view short clips on the mobile phone between friends, it makes no sense to expect people to watch complete programs of linear TV this way.

It is obvious that BBC’s iPlayer is a much better attempt than mobile TV at becoming a successful mobile service of TV video content.

Do not agree? I am very interested to read your view.

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Welcome to Wireless Habitat blog. Here you will find news articles with commentary, and explanations of technical concepts and terminology.

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