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CARRIER HETNET MARKET ANALYSIS – SNAP SHOT
Nov 2014
G W PRICE-JONESDIRECTOR AND OWNER PJP LTD
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WHY CARRIERS ARE INVESTING IN NEXT GEN HOTSPOT TECHNOLOGY
Key reasons to include carrier Wi-Fi services in a portfolio
3.5 5.9
33.956.7Important
Somewhat Important
6.9
12.6
36.8
43.7
23.5
36.5
32.4
7.6
Improve customer
experience and retention
Reduce network costs by offloading
data
Generate new revenue streams
(advertising, analytics, M2M)
Not Important
Figure 1.1 What do you consider to be the main driver for investing NGH – Compliant networks? ( please rank your top three, 1 being most important and 3 being least important)?
Very Important
Not Important
Very Important
Important
Somewhat Important
Not Important
Very Important
Somewhat Important
Important
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“Wi-Fi IS NOW THE PRIMARY MEANS OF CONNECTIVITY.
MOBILE IS SECOND”
DIXON DOLL DCM – WBA 2014
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A LOOK AT THE TOP LTE/4G MARKETS AROUND THE WORLD SHOW A CONTINUED RELIANCE ON Wi-Fi BY SMARTPHONE
USERS.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Germany Brazil UK Canada Mexico USA RussianFederation
South Korea Japan
Source: Mobidia
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BUT QOE STILL A MAJOR ISSUE AS USAGE DRIVES CONGESTION
0 0.5 1 1.5 2 2.5 3 3.5 4
Connction Cost
Traffic Type
Connection Quality
Connection Speed
Figure3-1 What will be the most important factor to consider when managing connection decisions between Wi-Fi and other access networks?
Source: WBA – Maravedis-Rethink, Nov 2013
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SK TELECOM QOS AP SELECTION
• SK Telecom developed Hotspot 2.0 AP selection based on QoS of the available AP’s.• Better Wi-Fi user experience and load balancing of 2.4 and 5Ghz was also achieved.
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CARRIERS ARE INVESTING TO SUPPORT THIS USE PATTERN
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Deployment of hotspots for MNO or MSO networks
5.2m
2012
6.5m
2013
7.1m
2014
7.9m
2015
8.3m
2016
9.6m
2017
10.5m
2018
MNO’s and MSO’s will deploy 10.5 million hotspots a year by 2018, directly or with
partners.
Cumulative base of carrier Wi-Fi locations
55 million by 2018
Source: WBA – Maravedis-Rethinks, Nov 2013
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BUT AGGREGATION IS ALSO A BIG NEED IN BUILDING THE FOOTPRINT
Source: WBA – Maravedis-Rethink, Nov 2013
Build own carrier-grade
Wi-Fi in selected
areas
64.5%
Partner with other service
providers such as cable
companies or WISPs
43.7%
Use Wi-Fi aggregators for national coverage &
services
41.6%
Use Wi-Fi aggregators
for international coverage &
services
32.0%
Use so called crowd sourced
hotspots to leverage free &
open Wi-Fi services
20.3%
Consider acquiring
one or more WISPs
16.8%
Other
1.5%
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CARRIER Wi-Fi TODAY(VALUE CHAIN)
Carrier
Aggregator
Service Provider
Wi-Fi Access Point
Device Provider
Carrier may play all of these roles or none Clearing
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WHAT ARE THE ECONOMIC DRIVERS FOR CARRIER Wi-Fi
TODAY?
THE ROI FROM OFFLOAD (REDUCED RAN CAPEX/OPEX)
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BUSINESS CASE HETNET VS LTE ONLYPJP
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$/Mbps/KM²
0
2000
4000
6000
8000
10000
12000
14000
16000
Dense Urban Urban Suburban Rural
Cost Of Capacity Density Varies
HSPA LTE 802.11 n
$
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Source: Ruckus Wireless
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SMALLCELL DEPLOYMENT TCO
0%
20%
40%
60%
80%
100%
120%
LTE LTE-A Wi-Fi n Wi-Fi ac
Per-bit TCO: LTE-Advanced and Wi-Fi ac
22%
100%
50%
43%0%
50%
100%
150%
200%
250%
300%
3G LTE LTE-A Wi-Fi n Wi-Fi ac
Peak Data Rates
Peak Data Rate % Of LTE Peak Data Rate
Wireless Technology Peak Rate Assumptions
3G – HSPA 5 MHz
4G – LTE (Base Case) 10 MHz, 2x2 MIMO
4G – LTE Advanced 10 MHz, 4x4 MIMO
Wi-Fi CERTIFIED n (Base Case)
40 MHz, Single Stream
Wi-Fi Certified ac 80 MHz, Single Stream
Figure 6. Peak data rates for Wi-Fi and LTE.
Sources: Equipment Vendors, IEEE,4G Americas, 3GPP, Senza Fili.
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HOWEVER LACK OF CLEAR ‘ROI’ IS STILL THE MAIN PERCIEVED OBSTACLE
0
50
100
150
200
250
300
350
400
450
500
Cost of NGHDeployment
Lack Of Clear ROI ForNGH Investments
Handset Availability Change To PassportCompliant Equipment
Other - Please Specify
Most Important 2ND 3RD
Figure 1-3 What do you perceive aa the main obstacles to deploying an NGH compliant network? (please rank your top three, 1 being most important)
Source: WBA – Maravedis-Rethink, Nov 2013
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MONETIZATION STRATEGIES FOR TOMORROW?
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BUSINESS MODEL CLARITY A KEY ISSUE
0%
10%
20%
30%
40%
50%
60%
70%
Clarify BusinessModel
ClarifyTechnologyRoadmap
DeploymentIssues: Ex: Site
Acquisition,Permits
Availability OfWi-Fi Enabled
Handsets
EnsuringQuality Of
Service
Other
Series 1
Series 2
Series 3
Figure 4-2 What do you see as the key challenges faced by mobile operators if they are to deploy and monetize seamless Wi-Fi Services?
Source: - Maravedis-Rethink, Nov 2013
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35.0%
Enterprise Services
36.5%
ROI From Wi-Fi
Offload
35.0%
Location Based Services
31.5%
Wi-Fi Offload
Wholesale
26.9%
Wi-Fi Analytics
31.0%
Wi-Fi As A Metropolitan
Service
10.2%
Wi-Fi Roaming
25.4%
Advertising
17.3%
Marketing Deals In
Retail
Figure 4-1 Are you implementing Wi-Fi monetization strategies? If so, which ones? (multiple responses are allowed)
Source: WBA – Maravedis-Rethink Nov 2013
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4.6%
Other
NEW GROWTHAREAS
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Operator Wi-Fi monetization strategies
SimpleOffload
CommunityWi-Fi
SMB/VerticalPub. Indoor
PublicOutdoor
Venues/Events
OTT Services(e.g. VoWi-Fi)
Source: AT Kearney, WBA, PJP analysis
Cost reduction, Bundle to Customer
Bill to Enterprise/Municipality/Venue/Casual user.Starting to see Advertising, Engagement and Analytics
Bundle
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SK TELECOM AD PLATFORMV-1. BizWise Platform
Wi-Fi has the advantage for zone-based service due to its small coverage compared to cellular network .
• SK Telecom enables shop owners to provide the contents service in the limited area.• BizWise Platform collects Wi-Fi network information and manipulates them to
provide the various types for zone-based service by means of open Api.
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SK TELECOM Wi-Fi ANALYTICS
• Wi-Fi AP in a store collects MAC addresses and RSSIs from visitor’s devices regularly and sends them to BizWise Platform server.
• Based on the collected information, store visitor Analysis server provides the number of visitors by hour or day, the duration of the stay, the ratio of revsistsand visitors age/gender.
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CONCLUSIONS
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CARRIER Wi-Fi EVOLUTION SUMMARY
• HISTORY – OFFLOAD TO ADDRESS THE MOBILE DATA TSUNAMI CREATED BY iPHONE AND THE SMARTPHONE EVOLUTION.
• NO CONTROL OF USER EXPERIENCE• OFFLOAD CONGESTED CELLS
• TODAY – HOMESPOTS AND NGH DEPLOYMENTS: DUAL SSID WITH SEAMLESS EAP-SIM CONNECTION & IN SOME CASES WITH Wi-Fi CALLING
• HETNET FOR CONTROLLED OFFLOAD AND QOE MANAGEMENT (HOTSPOT 2.0 ANQP)• SEAMLESS EXPERIENCE
• STARTING – ADVERTISING-BASED (SPONSORED) NETWORKS (USUALLY WITH CONSUMER-GRADE, SMB SOLUTIONS)
• THE FUTURE – PUBLIC CARRIER Wi-Fi WITH A MIX OF ADVERTISING AND PAID SERVICES (FREEMIUM) AND VOLUME HOTSPOT 2.0
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CUSTOMER EXPERIENCE SEEN AS KEY BY MAJORITY
SEAMLESSNESS IMPORTANT
E.G. FREE MOBILE /
ILIAD(FR), AT&T (USA), BT (UK)
QUALITY OF EXPERIENCE
KEY
BOTH NATIONAL AND
INTERNATIONAL (WHEN
ROAMING)EXTENDING SEAMLESS
SERVICES TO VOICE OVER
Wi-Fi
E.G. EE, 3 AND BT (UK), T-MO, SPRINT
AND AT&T (USA),
TELSTRA (AU)
ENABLED BY LIKES OF APPLE AND
SOON SAMSUNG
MARKET REQUIREMENTS
EAP –AKA/SIM
AUTHPERFORMANCE MONITORING AND POLICY
ENFORCEMENT FOR QOE
AGGREGATE ACCESS AND
CLEARINGVOICE
OVER Wi-Fi WITH QOS
CARRIER SOLUTIONNEEDS
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REDUCED NETWORK COST
Market Requirements
ROI FROM OFFLOAD VS CAPEX/OPEX
ROI FROM REDUCED IOT ROAMING
Carrier Solution Needs
SCALABLE CLOUD BASED WIFI
LEAST COST CONNECTIVITY ANALYSIS
POLICY ENFORCEMENTFOR LEAST COST
DYNAMIC BANDWIDTH TRADING (E.G BANDWIDTH X)
CLEARING DATA AND PAYMENTS
PERFORMANCE MONITORING / ANALYSIS / BUILD / 4G VS Wi-Fi
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MONETIZATION
• Venue Based Wi-Fi
• Wholesale Access
• Neutral Wi-Fi
• Home Spots
• Advertising
• Social Spots
• Analytics
• Segmentation Analysis
• Historical Trend Analysis
• Location Based Services
Market Requirements
• EVENT AND VENUE BASED CHARGING MODELS• E.G. BAR CODES ON TICKETS, SPONSORED
DATA• ENABLING LOCAL CONTENT – E.G. VENUE INFO• CLEARING AND WHOLESALE BILLING • SEAMLESS AUTHENTICATION • CUSTOMER SEGMENTATION
• BSS DATA• USAGE DATA
• LOCATION DATA FEED• CLIENT/ANDSF
• FREE TO ACCESS IN EXCHANGE FOR RECEIVING ADVERTS
• CUSTOMER USE ANALYTICS• FOOTFALL, REVISTS, DURATION/USAGE
Carrier Solution Needs
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