This week, Cisco released the 2017 Mobile Visual Networking Index (VNI) Forecast. Not surprisingly, most people focus on the cellular (2G, 3G, 4G and 5G) aspects of the forecast. But there are also some rather exciting insights that can be drawn from our analysis of “the other” mobile technology – Wi-Fi. In some ways, Wi-Fi suffers from an inferiority complex compared to other types of connectivity. But you can’t deny Wi-Fi’s versatility – it can provide network access for your laptop, your smartphone, your smartwatch, and a growing number of other things. According to the Wi-Fi Alliance, more than three billion Wi-Fi enabled devices will ship in 2017, joining more than eight billion devices already in use.

In 2015, Wi-Fi traffic was 7 times greater in volume than mobile data (cellular) traffic, though mobile data traffic does have a higher growth rate than Wi-Fi (it’s growing from a smaller base level). By 2020, Wi-Fi traffic will be about 3 times greater than mobile data traffic. And starting in 2018, Wi-Fi traffic will even surpass Fixed/Wired traffic. 63% of global mobile data traffic will be offloaded by 2021.

Figure 1: Global IP traffic by local access technology

Source: Cisco Mobile VNI, 2017

By 2021, 29 percent of the global IP traffic will be carried by Wi-Fi networks from dual mode devices (i.e., offloading from cellular to Wi-Fi). Offload is even higher on 4G networks compared to 3G networks because 4G devices are more media-centric. 4G users consume more video and often switch to Wi-Fi to avoid data cap overages. Offload on the much-anticipated 5G networks is expected to be lower initially. Historically, new cellular technologies with higher speeds than their predecessors tend to have lower offload rates. 4G also had a lower offload rate when it was first launched. At the outset, new networks have more availability and operators may offer more generous data caps in this promotional phase.

From a performance perspective, average Wi-Fi speeds are generally higher than average cellular speeds, which can create a user preference for Wi-Fi (when available). Globally, the average mobile connection speed was 6.8 Mbps in 2016, and this will grow 3-fold from 2016 to 2021, reaching 20.4 Mbps by 2021. Comparatively, the average Wi-Fi connection speed from dual mode devices will reach 32 Mbps by 2021, up from 18.2 Mbps in 2016. Individual countries may experience higher mobile speeds based on widespread 4G deployments or lower fixed broadband speeds due to leapfrogging.

Figure 2: Offload Traffic by mobile technology by 2021

Source: Cisco Mobile VNI, 2017

The higher experienced speeds are also due to great hotspot partnerships by operators, high fixed broadband speeds due to fiber deployments as well as the use of 802.11n, the dominant Wi-Fi standard which currently continues to be replaced by 802.11ac, the latest ratified standard even beyond the forecast period 2021.  While still a small portion of the overall offload traffic is from public Wi-Fi hotspots, they are a popular Wi-Fi offload opportunity for consumers as well as the emerging IoT connections and verticals such as connected car, healthcare, etc.

Globally, total public Wi-Fi hotspots (including homespots) will grow 6-fold from 2016 to 2021 from 94 million in 2016 to 541.6 million by 2021. From a regional perspective, APAC leads with 246 million or 45% of the global hotspots by 2021 followed by Western Europe with 23%. Leading hotspot countries are China (170M by 2021), the United States (86M by 2021), Japan (33M by 2021) and France (30M by 2021).  Homespots are a significant portion of the public Wi-Fi strategy and are emerging as a potentially significant element of the Public Wi-Fi landscape where subscribers allow part of the capacity of their residential gateway to be open to casual use. Homespots are actually home gateways that are used (upgraded) to offer home and commercial /public Wi-Fi for other users in their area by means of a second SSID. This is widely implemented and can result in substantial mobile traffic offload.

Figure 3: Global Public Wi-Fi Hotspot Growth

Source: Cisco Mobile VNI, 2017

Wi-Fi offload is also a major networking consideration for mobile carriers, particularly in  regions with intense cellular competition, spectrum challenges and large broadband installed bases. The networking and business dynamics in these markets make them prime targets for extensive homespot rollouts.

Public Wi-Fi hotspots (minus homespots) will nearly double from 8.8 million in 2016 to 15.4 million by 2021. Hotels, cafes and restaurants will have the highest number of hotspots by 2021 globally, and the fastest growth is in healthcare facilities (hospitals) where hotspots will triple over the forecast period. The primary objective of Wi-Fi in hospitals is to improve the delivery of healthcare services and staff productivity, with a secondary benefit being Internet access for patients, their families and guests.

Figure 4: Public Wi-Fi Hotspot Growth by Vertical

Source: Maravedis, Cisco Mobile VNI, 2017

Integral to these verticals and looking into the future are the game changing IoT devices and connections. According to Maravedis/Rethink research and the WBA Alliance, more than two thirds (67%) of mobile operators and 78% of cable companies expect to use Wi-Fi to support IoT services by 2020. Wi-Fi is widely used as a mobile offload mechanism for IoT applications as well since cellular connectivity can be costly with data caps applied to most mobile data plans. Figure 5 looks at commonly used consumer IoT devices and connections, and their Wi-Fi usage. Assuming that this usage in MB per hour was on a mobile/cellular network, a common 5 GB plan for some of these devices (if used uninterruptedly) can take less than a day to fill or use up a month’s worth of allotted mobile data.

Figure 5: IoT Wi-Fi usage, what if it were on a cellular data connection?

During the recent Superbowl sporting event in the US, hundreds of drones were used as lighting props during Lady Gaga’s half time show. They were prerecorded, however, have the capability of doing the light show live. One couldn’t help but wonder if they had cellular or Wi-Fi connectivity or both technologies to communicate with the server/s.  Each IoT market vertical is evolving rapidly and in 2017 we are likely to see more segment specific standards for IoT (e.g., healthcare, transportation, utility monitoring, agriculture, etc.). Each industry has different needs and will benefit from different architectures based on what it’s looking to achieve with IoT. For example, agriculture may value long-distance connectivity and more edge operation while a smart home works with shorter distances and can rely on the cloud more and healthcare will require the most stringent data security. Each industry will start to mature and settle on protocols, hardware and more to define its specific standard and choice of connectivity — enabling billions of devices and things to choose more paths to satisfy their Wi-Fi wanderlust.

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Usha Andra

Leader, Product Marketing

Data Center and Cloud Networking