4 Ways Carriers Are Fighting Wireless Data Demand

wireless-antenna

Global demand for wireless data surpassed mobile voice use back in December, and there’s no inclination of the trend reversing. Carriers can continue investing billions of dollars for network expansion and faster wired backhaul to wireless towers, but throwing money at infrastructure won’t work by itself. Instead, as expert panelists discussed at our Mobilize event last month, technological innovations must supplement infrastructure investment to gain efficiencies. Here’s a quick look at some of the latest technical and pricing solutions that are now available, or coming soon, to ensure our wireless data pipes don’t clog:

Cell towers in the home. As smartphone users return home after using mobile broadband networks all day, do most of them revert over to Wi-Fi or do they stay on carrier networks? Results will vary, but carriers are taking steps to further offload data traffic with femtocells. These devices act as small cellular base stations: Phones connect to the femtocell, but network activity is then routed over a home broadband connection, which reduces wireless network demand. AT&T began offering a femtocell last year, and both U.S. CDMA carriers, Verizon and Sprint, do as well. The biggest challenge for consumer acceptance may be in the pricing model: Consumers often have to purchase the device (at a cost of up to $250 in the case of Verzion), or get a free femtocell and pay a monthly fee. In either case, the customer is paying for and providing the home broadband connection used in place of the wireless network. Even with such a price structure, femtocell demand is rising: Alcatel-Lucent today announced it earned 12 new contracts to create femtocell devices over the past three months alone. Such devices will complement next-generation networks as well; picoChip, a Bath, UK-based company is ready to support femtocells for LTE networks.

Improved idle features (with a bonus). Nokia Siemens Networks today announced a successful joint test with Qualcomm of an updated cellular standard that reduces wasteful network signaling traffic. Called Cell_PCH or Fast Dormancy, the updated standard increases wireless network efficiency up to 50 percent by placing a handset in an idle state when not using wireless data. This standard tackles one of the two largest network congestion issues, according to wireless analyst Chetan Sharma. By maintaining a minimal level of connectivity in a reduced power state, Fast Dormancy can also help offset the “achilles heel” of mobility: battery life.

Go Wi-Fi Go! One of the simplest methods to increase the supply of wireless mobile broadband network services is to get users on localized Wi-Fi networks. That’s a key reason AT&T purchased Wi-Fi provider Waypoint (and its 80,000 hotspots) in 2008 and explains why Verizon Wireless began partnering with Boingo last July to offer free Wi-Fi for its customers. How much can such network offload help with data demand? Take AT&T’s midtown Manhattan hotspot as an example. According to Jeff Thompson, CEO of Towerstream, which monitored the hotspot, the Wi-Fi zone experienced single days with more than 1 terabyte in usage, not to mention 21 million connections in a quarter. Every “bit” on the Wi-Fi network helps reduces demand on the carrier’s 3G network in this case, providing an opportunity for chipmakers. This week, for example, BelAir Networks introduced new Wi-Fi network management systems and Ruckus Wireless is now offering carriers a fast 802.11n Wi-Fi system to help offload traffic from mobile broadband networks.

Pay for what you use. Love it or hate it, the end of unlimited data plans are near. Now that carriers have a few years of smartphone user data to predict data demand, wireless plans are getting adjusted accordingly and economic barriers will keep some users under certain levels of data usage. With the debut of Apple’s iPhone 4 and iPad devices, for example, AT&T eliminated the all-you-can-eat data plans for new customers, opting instead to sell data buckets of 200 MB and 2 GB. Those limits roughly correspond with Sharma’s own estimates that data card users consume on average 2 GB a month, while superphone users consume about 500 MB. T-Mobile recently revamped its stance; the carrier will slow wireless data speeds after 5 GB of monthly data is used. Verizon is rumored to be offering new, limited plans as early as next week for 3G smartphones, and the carrier previously said it will follow a similar, tiered approach with its 4G network, which launches in the coming weeks in 38 markets.

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