With phone lovers clamoring to get on their networks, wireless carriers are building new offramps.
Major carriers are investing in ways to unload customers’ data traffic from their airwaves into cheaper and more localized networks, such as Wi-Fi hot spots and small cellular base stations, which are designed for compact, heavy traffic areas such as stadiums and city centers.
Wireless companies say the new approach (“offloading” in industry parlance) will help meet customers’ surging demand for more data bandwidth. Even as they build the next generation of faster wireless networks, called 4G LTE, carriers are discouraging heavy data users by eliminating unlimited data plans and enforcing monthly caps.
Such efforts have done little to slow the hunger for more data from ceaseless waves of users who watch Netflix and listen to Pandora at all hours via over-the-air networks. In North America, video and audio streaming now account for more than half of all domestic wireless data traffic, according to network management company Sandvine.
Cisco Systems estimates global mobile data traffic grew 230% in 2011.
“People tend to stream audio and video when they sit down,” says Michael Davies, founder of tech consulting firm Endeavour Partners. Traffic tends to peak at certain times of the day, for example, lunchtime in Manhattan. “That’s when offload becomes critical.”
Offloading reflects the carriers’ desire to strike a balance between encouraging more data use — which produces more revenue for them — while easing traffic at choke points during busy hours. “We want to make sure we can control the experience of our customers,” says Hans Leutenegger, Verizon Wireless‘ vice president of network, South Area.
AT&T’s customers are already seamlessly switched to Wi-Fi when they’re in Starbucks, whose hot spots are operated by the carrier. AT&T also installed large Wi-Fi hot spots in several busy parts of Manhattan, such as Times Square and Rockefeller Center, where its customers are switched over from their 3G or 4G airwaves without the log-on process. The same is true for similar free hot spots in San Francisco and downtown Charlotte, and AT&T plans to add more cities. AT&T also has installed free Wi-Fi at 20 public parks in the New York area, available to customers of all carriers.
“Using Wi-Fi to offload is something we’ve been preaching about,” says Ralph de la Vega, CEO of AT&T Mobility.
Verizon Wireless is also dabbling in the concept. At the most recent Super Bowl at Lucas Oil Stadium in Indianapolis, the carrier installed a Wi-Fi network for game attendees to relieve the traffic of nearby cell towers.
Bob Azzi, Sprint’s senior vice president of network, says the carrier will introduce a feature later this year that will alert customers when they’re in Wi-Fi-equipped areas. Its plan is to eventually transfer users seamlessly to Wi-Fi hot spots that it deems reliable, he says. “We want to get there. A lot of customers are conditioned to use Wi-Fi,” he says.
Beyond Wi-Fi, the carriers are also investing in “picocell” networks, which are over-the-air wireless networks of small cellular base stations that are ideal for large corporate campuses or a downtown. A picocell network is more expensive to build than Wi-Fi, but its coverage area is about four times larger than a Wi-Fi hot spot, Davies says.
Not surprisingly, Wi-Fi developers envision playing a big role in offloading. The Wi-Fi Alliance, a group of companies interested in enhancing the Wi-Fi experience, is developing a new technology standard — called Passpoint or Hotspot 2.0 — that will certify reliable and secure Wi-Fi hot spots.
To allow customers to roam and offload seamlessly, wireless carriers and Wi-Fi operators will have to use equipment that uses the new standard, Wi-Fi Alliance CEO Edgar Figueroa says.
“We developed Passport for roaming and offloading. People can get on without having to remember 10 different log-ons,” he says.
For example, a wireless carrier may choose to offload its customers automatically at Chicago O’Hare only if the airport’s Wi-Fi network is certified as meeting the new standard.
Boingo Wireless, a large Wi-Fi network operator, plans to upgrade its Wi-Fi networks to the new standard early next year, partly to invite wireless carriers to offload traffic to its hot spots, says Niels Jonker, chief technology officer of Boingo. “The carriers’ networks alone aren’t going to get there (in meeting demand).”
Still, wireless carriers will want to develop offloading on their own terms, Leutenegger says. The process must be easy, and customers must be assured of security, he says.
Having to choose among a dozen hot spots, log in and punch in a password could discourage customers. “Some free ones aren’t that great,” Boingo’s Jonker says.