Mobile Operators may turn to Wi-Fi to cut traffic delivery costs by 50%

Now before you get all excited about this there is nothing new about this. I remember working for a UK based mobile operator in 2004 when they trialled something similar in their US region and did not make huge inroads into the market. What they did was allow users to make calls over wifi as long as the Wi-Fi was provided by mobile operator as well. Now, a new research report by Analysis Mason reveals that just efficiency gains in macro sites and rolling out LTE alone will not be enough: Wi-Fi has an important role to play in helping mobile operators as well.

Although this report was written for the Western European market, it is very relevant to Australia as the key issue is that Mobile Operators just can’t to invest anymore in setting up base stations. And we all know only too well what the result has proven to be? Either there is network congestion that leads to bad mobile service availability or pricing determines the level of service. Terry Norman, co-author of the report and Lead Analyst for Analysys Mason’s Wireless Networks research programme seems to think that Wi-Fi could be a potentially intelligent solution. “Because Wi-Fi is widely deployed and competitively priced, it is a leading candidate small-cell technology,” Norman explains.

The report examines the costs associated with three different approaches to building and operating mobile radio coverage over an urban area of 0.8km2, which is typical of an urban 3G site:

  • upgrading the site to LTE and building further LTE sites as necessary
  • building indoor Wi-Fi access points to augment existing capacity
  • building a mix of outdoor/indoor Wi-Fi access points that will be used to augment existing capacity.

“The costs of indoor and outdoor Wi-Fi are both significantly lower than those of upgrading to 4G,” Norman explains. “In Western Europe, operators need to save USD30 billion in mobile access network costs between now and 2016. Wi-Fi would go a long way towards making up that deficit because it costs only about 20% of an equivalent macro deployment.”

However, a Wi-Fi approach presents residual challenges, such as site accessibility, and maintaining the quality of product and service.

Image Courtesy : Viktor Hertz

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