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Wi-Fi: A Major “Hotspot” for Service Providers

- November 1, 2012 - 0 Comments

By Tony Verspecht and Luiz Lima, Cisco Internet Business Solutions Group (IBSG)

Growth in mobile network traffic is staggering: Driven by the onslaught of devices that are now connected to the Internet, mobile data traffic is expected to grow three times faster than fixed IP traffic, exceeding 6 exabytes per month by 2015, according to the Cisco Visual Networking Index. This presents service providers (SPs) with a tremendous opportunity to invest in Wi-Fi services to create carrier-class Wi-Fi experience and increase revenues.

While specialized providers have operated commercial Wi-Fi hotspots for nearly two decades, most SPs see Wi-Fi as a fairly new business. To understand the implications of Wi-Fi on SP operations, Cisco® IBSG interviewed a number of SP executives. Following are some of the key insights, which are further discussed in “Wi-Fi for Service Providers: Challenges and Opportunities for Carrier-Class Operations”:

  • Basic Wi-Fi service coverage expansion is still the main driver—Even among established Wi-Fi SPs with a large number of hotspots, the average yearly increase in access points is 14 percent.
  • Value-added Wi-Fi services are evolving and have clear operational implications—Even with a limited portfolio, more than 50 percent of SPs already offer some value-added service (VAS) over Wi-Fi, and their operations are significantly different from those of SPs that do not offer VAS.
  • Investment in high-quality site survey and installation pays off—Both well-designed and installed sites usually generate fewer operational problems and therefore reduce the frequency of costly field technician visits.
  • Level of end-to-end automation in Wi-Fi operations is still low—Few SPs claim to have full automation for service activation, modification, or cancellation. While the simple nature of current Wi-Fi services may not demand high-level automation, a lack of integration between Wi-Fi network management systems and existing IT systems is the basis for low automation and puts scalable growth at risk.
  • Controller-based architectures may offer more robust management capabilities—Those SPs with VAS services over Wi-Fi often have a controller-based network environment. Value-added services are typically delivered under service-level agreements and require better management of the underlying infrastructure. Such SPs regard controllers as key architectural elements.

Opportunities exist for creating a carrier-class Wi-Fi experience; identifying them starts with understanding an SP’s current business architecture. Based on feedback from our interviews, SPs currently use three organizational models:

  1. Wi-Fi integrated with mobile
  2. Wi-Fi integrated with broadband
  3. Wi-Fi as a stand-alone entity

To differentiate their Wi-Fi offering and explore new revenue opportunities, most SPs are implementing value-added services such as offloading, security, email, managed VPN, and content delivery. Feedback from our interviews showed that such actions have clear implications on fulfillment and assurance processes, and how they integrate into the overall operations structure. And, as services portfolios increase, along with the size of the network, controller-based architectures are more widely deployed, providing a more robust set of operational capabilities.

The best operational practices are those that align with an SP’s overall Wi-Fi business strategy—whether it’s a basic “free” Internet access extension of fixed broadband or a rich services portfolio that includes VAS and enhanced quality of service.

Keep in mind, though, that business strategies do evolve: In terms of Wi-Fi, consumer expectations tend to drive Wi-Fi’s evolution. Previous research from Cisco IBSG identified key consumer expectations. We’ve mapped those to service strategies and operational impact in the chart below.

Source: “What Do Consumers Want from Wi-Fi? Insights from Cisco IBSG Consumer Research,” Cisco IBSG, 2012.

Wi-Fi is a major “hotspot” that will help SPs grow their businesses. Understanding operational implications; developing a comprehensive, evolving Wi-Fi strategy that can evolve with changing market conditions; and identifying the true benefits through pilot programs are key to success.

Cisco IBSG interviewed operations executives from 14 SPs in North and South America, Europe, and Asia whose businesses encompass more than 230,000 total access points.


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