Can Wi-Fi Rescue The 3G Operators?

In 2002 or so, people thought Wi-Fi hotspot providers could build a challenge to 3G networks for mobile data, but it never happened, because hotspots had high prices and low coverage. But now, as 3G services fall victim to their own success, and fall victim to overloading, they could need those Wi-Fi hotspots to meet demand without expensive cellular upgrades.

That’s the view of Selina Lo, at any rate. As chief executive of Wi-Fi equipment vendor Ruckus Wireless, her view is no surprise: she obviously has an axe to grind, and would like to have a carrier-grade market for Wi-Fi gear. Ruckus, in fact, began its career selling “customer premises” (ie home) Wi-Fi equipment to service providers.

We spoke to her the week before the UK’s Mobile and Wireless 09 show, to get the details on her plan to save 3G vendors from their own success. We also wanted the latest on Ruckus’ equipment: unlike many other so-called “unique” technologies, it does have something special – a multiple antenna set up that uses beam-forming to deliver stronger signals to wireless users, using lower overall power.

Saving 3G from its own success

“Despite the recession, mobile Internet is one of the hottest areas in the economy,” said Lo. “But for a lot of service providers in 3G space, data traffic is growing much faster than revenue.” To get more subscribers, the operators have to offer flat rate, or all-you-can-eat Internet packages, she said, so their traffic is likely always to be higher than their revenue.

“A lot of 3G operators are looking at Wi-Fi as a way to offload data traffic from their 3G networks,” she said. They are actively looking at this.” No one in Europe has given Ruckus permission to name them, she said, although both China Telecom and PCCW in Hong Kong have been bundling mobile broadband with Wi-Fi hotspot coverage, she said: “They are doing a land grab, placing hotspots in as many public access areas as possible.” That means airports and shopping malls, mostly.

To make the best of the offload effect, operators will put roaming software on the phone or on the subscriber’s laptop to use Wi-Fi when possible: “then 3G is only activated when there is no Wi-Fi signal.”

T-Mobile is one of the largest providers of public Wi-Fi, with around 20,000 hotspots (and 30,000 from roaming partners). It doesn’t yet have the kind of intelligent roaming Lo is talking about (as far as we know), but it has recently bundled its Wi-Fi hotspot service with mobile broadband. “Hotspots are a way to augment 3G structures,” said Lo. “It is critical to an areas where operators actually make money.”