Site Acquisition Proposition for Small Cell/3G Data Offload
The massive growth in mobile data applications and resultant broadband traffic has placed severe pressure on mobile operators. Put simply, 3G networks are completely overloaded, especially in high-density environments such as urban centres, transport hubs and public locations.
Today with network capacity being stretched to the limit, causing degradation in the service experience for millions of users and average revenue per user (ARPU) falling, the mobile operators must adopt a new network model.
In addition, with data consumption forecast to grow exponentially for the foreseeable future and flat rate data tariffs fast becoming the norm, mobile operators will have to consider how to carry more data for less revenue per user.
So while network upgrades would seem unavoidable, there is no clear revenue growth justification for the capital investment. As mobile broadband volumes grow, the profitability of mobile networks will shrink due to increased network costs and falling ARPU.
Currently a number of mobile operators are upgrading their 3G networks and have announced 4G strategies. But while 4G technologies, such as LTE will provide more capacity in terms of bandwidth, they will require significant investment and additional macro sites. However, even with such investment, industry research forecasts that any network capacity growth will be insufficient to keep pace with demand.
In the UK Ofcom are preparing to auction 4G spectrum in the 4th quarter 2012, but this is not without controversy.
Ofcom revealed in its proposals for the perpetually delayed auction of 4G spectrum that Three, the UK’s smallest mobile operator, would be the only network guaranteed bandwidth. However rivals such as Vodafone have disputed Three’s claims that its business would be unsustainable otherwise and that it would have plenty of opportunities to gain enough spectrum in the process, meaning it shouldn’t be entitled to cheap spectrum
It was previously believed that Everything Everywhere, the UK’s largest mobile network in terms of subscribers, would also be guaranteed bandwidth, but this is no longer the case. The operator has instead announced plans to create a 4G network on its existing spectrum, a move which has caused Three to threaten legal action, arguing that EE should not be allowed to launch it before the auction
Source: Sunday Times May 2012.
Everything Everywhere has the biggest third-generation mobile network in the U.K., competing against Vodafone Group PLC, Telefonica SA’s U.K. arm O2 and Hutchison Whampoa Ltd.’s Three U.K.
Scaling network capacity will only mask the problem, so if mobile operators are to avoid a capacity crisis and the subsequent financial implications, they will need to adopt a radically different approach.
Fortunately, much of this increased data traffic is directly attributable to dual-mode smart phones, many of which are now Wi-Fi enabled. According to research at In-Stat, “the next 5 years will see an increase in the number of Wi-Fi-enabled devices, from over 500 million in 2009 to nearly 2 billion by 2014”.
Using Wi-Fi to offload data from 3G/LTE networks will allow operators to take mobile broadband traffic off their cellular networks and onto cheaper wireless access networks. Adopting Wi-Fi technology will, not only reduce network costs whilst maintaining customer revenues, but will provide much greater capacity in areas of high user concentration.
Importantly Wi-Fi networks deployed as 3G data offload networks today will continue to serve as 4G data offload networks in the future
3G offloading can take several forms, indoor WiFi ‘Hot spots’ typically installed in retail premises and cafes and outdoor ‘Small Cells’ consisting of a mix of technologies including WiFi/Femtocells/3G/LTE micro cells.
These outdoor WiFi based networks are usually installed on street assets, including lamp and CCTV columns, bus shelters and buildings. The business case for these includes leasing portions of the infrastructure to mobile operators, allowing them to roll-out citywide Wi-Fi networks for a fraction of the cost of 4G networks with much higher capacity where it is needed in busy urban areas.
AWTG is a leading technology player in the design deployment and operation of outdoor Small Cell networks having built and operated networks in the busiest areas of the UK for both O2 and another MNO. AWTG is building networks for offload of 3G data onto the Internet and is also integrating WiFi networks into the MNO’s core network architecture.