hotspot 2.0: passing go - wia - the wireless ... · pdf filehotspot 2.0, also known as...

and

present:

Hotspot 2.0: Passing Go

Whitepaper

Published Fourth Quarter, 2012 Version 1.0

iGR 12400 W. Hwy 71 Suite 350 PMB 341 Austin TX 78738

Distribution of this report outside of your company or organization is strictly prohibited. Copyright © 2012 iGillottResearch Inc. 1

Table of Contents

Executive Summary..................................................................................................... 1 Figure A: Hotspot 2.0 Strengths & Weaknesses ...................................................................... 1

Methodology .............................................................................................................. 2

Hotspot 2.0 ................................................................................................................. 3 What is Hotspot 2.0? ..........................................................................................................3 Current State of Hotspot 2.0 ...............................................................................................4

What is the Status of Hotspot 2.0 in the Market? ........................................................ 5 Access Network and Discovery and Selection Function (ANDSF)...........................................5 WiFi Networks ...................................................................................................................6

Table 1: Number of Worldwide WiFi Networks ...................................................................... 6

Who are the Players in Hotspot 2.0? ........................................................................... 7 Table 2: Key Hotspot 2.0 Players ............................................................................................. 7

SWOT Analysis: Hotspot 2.0 ........................................................................................ 8 Figure 1: Hotspot 2.0 SWOT Analysis ...................................................................................... 8

Hotspot 2.0’s Impact on Current Technology ............................................................... 9

What is the Outlook for Hotspot 2.0? ........................................................................ 10 The Next 12-24 Months and 24-48 Months ....................................................................... 10

Table 3: Outlook for Hotspot 2.0, 12 to 24 Months .............................................................. 10 Table 4: Outlook for Hotspot 2.0, 24-48 Months .................................................................. 11

Conclusion ................................................................................................................ 12

About IGR ................................................................................................................. 13 Disclaimer ........................................................................................................................ 13

This research is provided as a member benefit for the exclusive use of members of PCIA – The Wireless Infrastructure Association. It is made available by a partnership between PCIA and iGR.

Distribution of this report outside of your company or organization is strictly prohibited. Copyright © 2012 iGillottResearch Inc.

1

Executive Summary

Hotspot 2.0 promises to improve the end-user experience for smartphone and tablet users while simultaneously presenting cost savings and revenue opportunities for the mobile operator. Hotspot 2.0 helps integrate and expand access to wireless data services – and therefore the new entertainment and communications capabilities enabled by smartphones and tablets.

Hotspot 2.0, also known as Passpoint (which is the name for the certification by the WiFi Alliance), enables many new certified devices to be automatically and transparently connected to any certified access points within range – if the given end user has a billing/customer relationship with a WiFi service provider associated with the given access point.

Hotspot 2.0 builds on the IEEE 802.11u specification which provides mechanisms (such as ANQP) for devices to discover information about the roaming partners/providers available through an access point and therefore the type of credentials needed to authenticate/associate with that hotspot. The standard also builds on the IEEE 802.11i-based WPA2 Enterprise security specification which enables secure authentication and encryption via various user credentials (SIM, digital certificates, username/passwords).

Figure A: Hotspot 2.0 Strengths & Weaknesses

Source: iGR, 2012

Hotspot 2.0 appeals to all parties, but iGR believes that there will be a transition period required to remedy how the disparate network elements function and how the mobile operators manage and trouble-shoot through the early stage of deployment.

This report provides a brief overview of Hotspot 2.0, some of the key players and its potential impact on the wireless market.

Offload of 3G and/or 4G cellular data networks

Offload of core network

Standard solidified by 2013

Passpoint certification process in place and work is ongoing

Must quickly move to next-gen hotspots to gain advantages

Negotiating roaming agreements with WiFi service providers

Possible technical issues spurring more customer care calls


2

Methodology

This report provides an overview of Hotspot 2.0 and its potential impact on mobile/wireless data use in the U.S. cellular market. The information presented in this report originates from iGR ’s primary and secondary research. Definitions of industry terminology can be found in the Definitions section towards the end of this report.


3

Hotspot 2.0

The demand for high quality mobile data services has increased dramatically with the advent of new LTE networks and robust smartphones and tablets. Mobile operators are struggling to meet increasing data demand and mobile operator revenue per subscriber is also declining.

To combat this situation, mobile operators must evolve the cellular-only radio access network (RAN) to an integrated network that includes small cells (pico, metro, micro), femtocells, DAS and enhanced WiFi technology, along with a reengineered mobile backhaul network.

What is Hotspot 2.0?

Hotspot 2.0, also known as Passpoint (which is the name for the certification by the WiFi Alliance), enables many new certified devices to be automatically and transparently connected to any certified access points within range – if the given end user has a billing/customer relationship with a WiFi service provider associated with the given access point.

Hotspot 2.0 builds on the IEEE 802.11u specification which provides mechanisms (such as ANQP) for devices to discover information about the roaming partners/providers available through an access point and therefore the type of credentials needed to authenticate/associate with that hotspot. The standard also builds on the IEEE 802.11i-based WPA2 Enterprise security specification which enables secure authentication and encryption via various user credentials (SIM, digital certificates, username/passwords).

With regard to mobile operators today, Hotspot 2.0 primarily provides discovery and authentication of mobile operator-owned and/or their partner’s hotspots. This helps eliminate the current manual process of registering and provisioning access – iGR believes this is one of the barriers to increased use of WiFi by consumers to offload mobile data traffic from the macro network.

In the future, there are many capabilities that will be involved in the certification process, such as enabling off-net hotspots to automatically configure network relationships and manage seamless hand-offs to small cells or other hotspots on foreign networks.

Passpoint also represents the initial foray into the integration of diverse types of WiFi equipment into the mobile operator core Radio Access Network (RAN). The WiFi Alliance has announced initial Passpoint test certification for equipment manufactured by BellAir/Ericsson, Broadcom, Cisco, Intel, Marvell, MediaTek, Qualcomm, and Ruckus Wireless and a growing number of other proponents of the WiFi Alliance standard. Phase One of the Passpoint certification process began during the summer of 2012; Phase Two will begin in early 2013.


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Current State of Hotspot 2.0

In addition to the WiFi Alliance, which launched the initial standards effort, the Wireless Broadband Alliance (WBA) is a large collection of international mobile operators that focus on technology interoperability. The WBA hotspot program identifies future requirements for hotspot, cable and 3G/4G mobile operators and is the vanguard for initial guidelines related to future interoperability trials.

The WBA trials will test the Next Generation Hotspot (NGH) in the areas of network discovery, selection, security, and authentication. The WBA anticipates the first NGH deployments will occur very late 2012 or early 2013. The WBA has stated that it is expected that there will be 5.8 million NGHs in place by 2015.

iGR believes this estimate is on the low side because of the financial benefits of the technology, as outlined below and the large number of generic hotspots already in service (although not all of these “legacy” hotspots may support Passpoint).

The following outlines some of the benefits of Hotspot 2.0:

Major savings in CAPEX/OPEX

Reduction in wholesale roaming costs

Technology is unlicensed and free

Conduit to fixed backhaul

Worldwide availability of WiFi

Vendor neutrality.

Hotspot 2.0-/Passpoint-compliant devices and equipment will be rapidly introduced upon the completion of the initial trials and the continued maturation of the standard.


5

What is the Status of Hotspot 2.0 in the Market?

Hotspot 2.0 is important in assisting operators and their customers in utilizing unlicensed wireless technology to offload their cellular data networks. When the standardized technology goes mainstream, smartphones and tablets enabled with new Hotspot 2.0 capability and predefined policy rules can be automatically registered, authenticated, and provisioned. If there are multiple networks available for connection, the device will connect as predetermined and prioritized by the mobile operator policy or the end user’s own preference.

Hotspots are also attractive to cable operators (or other wired broadband providers) who do not own or operate licensed wireless spectrum. For example, Comcast has very recently announced that it is building a nationwide Hotspot 2.0 offering.

Several other cable operators are also rolling out Hotspot 2.0-enabled WiFi networks in the belief that not only will that offer more value/choice to their fixed broadband subscribers but that may be able to augment their revenue stream by repurposing the core cable network to support traffic “offloaded” from mobile operators’ RANs.

WiFi service providers such as iPass, Boingo Wireless and Devicescape are also likely to see great opportunities from Hotspot 2.0 as the standard enables them to more easily provide seamless access to their service to either end users or resale partners.

Access Network and Discovery and Selection Function (ANDSF)

The Access Network and Discovery and Selection Function (ANDSF) is a new 3GPP protocol that supports the interoperability between cellular networks and trusted hotspots and/or third-party hotspots. With ANDSF and Hotspot 2.0, a mobile operator could “hot switch” a smartphone from the 3G/4G RAN to a WiFi network (or vice versa) based on any number of criteria – rate plan, network congestion, time of day, physical location, etc. – or some combination of those criteria.

More work is required to create an autonomous access, but this is being aggressively addressed by the WBA and the 3GPP. Wireless network equipment vendors such as Ericsson and Alcatel-Lucent are also pursuing ANDSF functionality and its integration with both their RAN equipment and WiFi-based infrastructure (as in the case of Ericsson/BelAir).

Ericsson currently demonstrates ANDSF functionality on Android-based smartphones (of the type mentioned above), but acknowledges that its current solution will only work across its own equipment. iGR believes the same to be true of other vendors’ solutions. This limitation is a key hurdle to ubiquitous ANDSF functionality.


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WiFi Networks

There are a number of differences between mobile and WiFi networks. Most notable is that mobile broadband networks function on specific, licensed frequencies while WiFi is either free in the public domain, or offered by other firms for a fee.

Figure 1 below shows the top ten locations in the world for free and paid hotspots, the type of hotspot, and the top ten cities in the United States where hotspots are located. Hotspot 2.0 will be a high priority for mobile operators in dense population areas. LTE networks do provide extra capacity for mobile data, but it is the operators’ 3G bands that will experience the greatest congestion over the next 18 to 24 months.

iGR believes that the majority of these hotspots will upgrade to Hotspot 2.0 and there will be a number of WiFi and cable providers that will strive to offer nationwide WiFi networks. Note, too, that tower companies (American Tower, Crown Castle, etc.) are actively building out WiFi networks. Municipalities, too, are again beginning to offer free WiFi services (Chicago is a recent example).

Table 1: Number of Worldwide WiFi Networks

Figure 2: Source JIWire, 2012


7

Who are the Players in Hotspot 2.0?

The WBA has launched trials at AT&T, BT, China Mobile, NTT DoCoMo, Orange, Portugal Telecom, Swisscom, and Telia, utilizing Passpoint certified equipment from LG and Intel. These trials are testing automatic detection and connection, without registration, but with full end-to-end encryption and SIM authentication.

Table 2 below denotes a number of companies that are either working on their own Hotspot 2.0 deployments or launching partner programs to support Hotspot 2.0. Partnerships between WiFi-only service providers and mobile operators will likely be a key facet of the post-Hotspot 2.0 wireless data world. Note that venue owners might also benefit from resale agreements with WiFi service providers.

Table 2: Key Hotspot 2.0 Players

Vendors Service Providers

3COM Logitech AT&T

Alcatel-Lucent MediaTek Boingo Wireless

Apple Meraki China Unicom

Aptilio Netgear iPass

BelAir (Ericsson) NTT Singpore Tel.

Broadcom Qualcomm China Mobile

Cisco Ruckus BT

Dell Ruckus NTT DoCoMo

Ericsson Samsung Portugal Telecom

Fuji Siemens Swisscom

Hitachi Sony Telia

HP ZTE

Huawei

Source: iGR, 2012


8

SWOT Analysis: Hotspot 2.0

Hotspot 2.0 is a very promising alternative for mobile operators to offload 3G/4G data traffic and potentially increase revenues. There are many variables associated with interfacing with cellular networks. See Figure 4 below for a composite assessment of the Hotspot 2.0’s potential impact on mobile operators.

Figure 1: Hotspot 2.0 SWOT Analysis

Source: iGR, 2012

In iGR’s opinion, it is clear that Passpoint technology will eventually be highly desirable for the mobile operator and their customers. Initial Hotspot 2.0 deployments may be somewhat cumbersome, but iGR believes that the mobile operators, WiFi service providers, venue owners and equipment manufacturers will readily resolve these issues.

Strengths

• Leverage new LTE networks

• Offload of core network

• Standard solidified in 2013

• Hotspot 2.0 / Passpoint certification process in place (and

ongoing)

• Support by major mobile operators

• Seamless user authentication

• Immediate provisioning

Weaknesses

•Must quickly move to next-gen hotspots to eliminate manual processes •Must selectively partner with Hotspot 2.0 partners •Must negotiate many roaming agreements with

different WiFi service providers (although the WBA is working to mitigate this) •Management of roaming agreements could be

personnel intensive •Potentially more customer care calls (especially those

not related to cellular issues)

Opportunities

•Rapid increase in global WiFi traffic •New revenue share potential •Mobile data traffic likely to increase substantially

over next 5 years •Enhance end user network experience via Hotspot 2.0 •Potentially seamless integration between cellular and

WiFi / Hotspot 2.0

Threats •Timing for Passpoint certification •Pricing / rate plans (if WiFi included for a feee) could

prove detrimental to customer perception •Problems with auto-registration •Failur in auto-roaming; hand-offs, auto-network

selection •Lack of over-the-air encryption (though encryption &

authentication at other layers)

Hotspot 2.0


9

Hotspot 2.0’s Impact on Current Technology

Hotspot 2.0 is expected to have a significant impact on mobile operators, but the initial offering may fall somewhat short of expectations until transparent registration, SIM authentication and automatic roaming are fully supported. Even with these potential shortcomings, mobile operators are anxious to offload their cellular data networks wherever possible.

The Hotspot 2.0 standard is expected to evolve rapidly because mobile operators fear they will be deluged with data usage, as new LTE networks secure a critical mass of users. When combined with the latest small cell and DAS technology, Hotspot 2.0 is a logical addition to both 3G and 4G because it plays such an important role in providing high quality and cost effective wireless coverage.

Mobile operators have started revisiting their respective WiFi roaming strategies. Free on-net roaming interoperability roaming makes sense, but there will be challenges with hotspot hand-offs. In anticipation of this new revenue stream, iPass has launched Open Mobile Exchange, which enables the management of initial roaming agreements and financial settlement between entities.

Until transparent WiFi roaming is implemented, the iPass solution, or one like it, is likely to be accepted by both 3G and 4G mobile operators. iGR also believes that iPass will experience competition with legacy clearinghouse firms. These firms face the challenge of providing session mobility as customers’ transition from the mobile network to WiFi access point and back. iGR believes that Hotspot 2.0 will be commercial deployed in late 2013.

There are a number of questions regarding availability of smartphone technology that will required to support new Access Network Query Protocol (ANQP), which helps determine the WiFi networks onto which a user can roam. While the access points can be modified via software upgrades, the smartphones and tablets may require additional software upgrades for end-user terminal equipment.

iGR believes that mobile operators may seek interim proprietary solutions to WiFi roaming just to secure initial presence in the market. iGR also expects to see a few mobile operators negotiate large scale national roaming and offloading agreements, but caution is likely to be the norm.


10

What is the Outlook for Hotspot 2.0?

Mobile operators are making a concerted effort to bring robust Hotspot 2.0 solutions to the market as quickly as possible. iGR believes that all parties involved with Hotspot 2.0 will quickly work through this initial transition period because it’s in the best interest of all parties.

The Next 12-24 Months and 24-48 Months

The wireless industry and the major mobile operators are beginning to work on a unified approach for Hotspot 2.0. However, several issues need to be resolved, namely registration, security, roaming, and user experience. iGR believes that Hotspot 2.0 will rapidly proliferate because it is viewed as a logical extension of traditional home WiFi networks.

Table 3 summarizes iGR’s opinion on the prospects for Hotspot 2.0 outlook in the next 12 to 24 months.

Table 3: Outlook for Hotspot 2.0, 12 to 24 Months

12 -24 Month Period Description

Rapid adoption of WiFi by mobile operators Technology already accepted by many home users; Hotspot 2.0 is a logical extension

Initial issues of QA problems with hand-offs Must rapidly solve problem of cellular to WiFi hand-offs and WiFi to WiFi hand-offs

Operators need to partner with WiFi providers

Many WiFi partners are required to provide nationwide WiFi roaming and interconnection; niche vendors may be required for smaller markets

Monetization of WiFi revenue

Emergence of new mobile WiFi exchange vendors to manage complex new roaming agreements between partners and manage revenue sharing

SIM-based authentication Required to enable mobile data offloading

Source: iGR, 2012

Table 4 summarizes iGR’s opinion on the prospects for Hotspot 2.0 outlook in the next 24 to 48 months.


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Table 4: Outlook for Hotspot 2.0, 24-48 Months

24 -48 Month Period Description

NGH reaches full operability

Total transparency for security, hand-offs, registration, and roaming

Carrier-grade support for WiFi

Complete automation of access, policy management, and charging algorithms

Automated selection of hotspots List of available hotspots automatically appears on device

Automated use of existing login Login for WiFi roaming is seamless

Protection against data loss New encryption with NGH mitigates threat of data loss

Reduced fraud threat Protection of data integrity

Source: iGR, 2012


12

Conclusion

Hotspot 2.0 promises to improve the end-user experience for smartphone and tablet users while simultaneously presenting cost savings and revenue opportunities for the mobile operator. Hotspot 2.0 helps integrate and expand access to wireless data services – and therefore the new entertainment and communications capabilities enabled by smartphones and tablets.

Hotspot 2.0 appeals to all parties, but iGR believes that there will be a transition period required to remedy how the disparate network elements function and how the mobile operators manage and trouble-shoot through the early stage of deployment.


13

About IGR

IGR is a market strategy consultancy focused on the wireless and mobile communications industry. Founded by Iain Gillott, one of the wireless industry’s leading analysts, we research and analyze the impact new wireless and mobile technologies will have on the industry, on vendors’ competitive positioning, and on our clients’ strategic business plans.

Our clients typically include service providers, equipment vendors, mobile Internet software providers, wireless ASPs, mobile commerce vendors, and billing, provisioning, and back office solution providers. We offer a range of services to help companies improve their position in the marketplace, clearly define their future direction, and, ultimately, improve their bottom line.

Note that Iain Gillott currently serves as an independent director for Wmode, Inc.

A more complete profile of the company can be found at http://www.IGR -inc.com/.

Disclaimer

The opinions expressed in this white paper are those of IGR and do not reflect the opinions of the companies or organizations referenced in this paper. All research was conducted exclusively and independently by IGR .

http://www.igr-inc.com/

http://www.igr-inc.com/

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