XCellAir and Real Wireless study shows operators are leaving money on the table by failing to manage unregulated spectrum
San Diego, 24 September 2015: Research released today by XCellAir, an expert in Wi-Fi Quality of Experience (QoE), has revealed that operators could fail to capture up to $18bn of opportunity cost if they continue to poorly manage unregulated spectrum.
The study, conducted in partnership with independent telecoms analyst Real Wireless, shows that poor management of Wi-Fi assets severely limits such assets' usefulness in dense urban environments where many access points are deployed to serve large numbers of users and large volumes of data. Interference between these access points, and minimal spectrum management, means that the user experience is often sub-optimal.
XCellAir conducted an analysis of 250 live Wi-Fi access points around its offices in Montreal, Canada, modelling common urban scenarios in which public Wi-Fi is in everyday use. The analysis revealed the extent to which Wi-Fi is underused and inefficient. It revealed that 92% of access points do not adjust their operating frequency, no matter how badly performance is degraded by interference. It also found that on average, two channels worth of bandwidth is unused at any given time, despite congestion and interference. Each channel equates to 50MBps of idle bandwidth totalling 100MBps unused. In practical terms, this is enough latent capacity to concurrently stream 25 HD videos, or more than 3000 HD voice calls.
Given these inefficiencies and the potential for improvement, Real Wireless developed a cost model of an operator that ignored these issues, and compared that model against one that could effectively manage interference and spectrum utilisation across an operator's Wi-Fi assets. Such an operator would use automatic, intelligent and scalable interference and radio resource management and fault avoidance techniques to maximise the efficiency of its Wi-Fi network.
Choosing New York City to represent an urban area for a five-year model, analysis showed that for an operator with an assumed 25% market share, the net present contribution of operational savings and new service revenues amounted to $374 million over five years. This was made up of:
Cost savings, which amounted to $71 million. These largely arise from reductions in the total cost of core network transport due to the greater offload that better Wi-Fi management can facilitate.
New services, which contributed $303 million, as a result of using offload to mitigate capacity constraint, maintain QoE and bring down the incremental cost of capacity. The reduction in capacity costs means savings can be passed on to attract price sensitive users.
When scaled to the top ten financial centres across the globe, the opportunity for all operators equates to $17.9bn over five years. Cities considered include New York, London, Tokyo, Singapore, Hong Kong, Shanghai, Paris, Frankfurt, Beijing and Chicago
"Our study reveals the destructive impact of poor Wi-Fi QoE management in cannibalizing valuable network capacity," says Simon Saunders, Director of Technology, Real Wireless. "Carrier Wi-Fi technology is central to supporting most global 4G, and ultimately 5G, network architectures to deliver the best possible user experience. This is especially important in dense urban areas. It is therefore critical that operators take action to ensure Wi-Fi does not become the weak link and prevent service differentiation."
Operators looking to launch carrier Wi-Fi as a way to monetise new and existing customers, and introduce new ‘quad-play' services, face significant challenges in giving customers the quality of service expected. These challenges are quite different to those of a licenced cellular network - standards for spectrum, interference and radio resource management for cellular networks are carefully defined, and these networks are designed and optimised by operators to allow multiple technologies and cell types to coexist. Wi-Fi spectrum is, in contrast, a ‘wild west' accessible to all, with very little provision for management within standards, often resulting in poor service.
"It's important that operators don't see unlicensed spectrum as unmanageable spectrum," said Narayan Menon, Founder and CTO, XCellAir. "Wi-Fi offload is already a major technique for operators to increase the capacity of data that they can deal with - but it has been used more as a ‘sticking plaster' than as an integral part of the network. For Wi-Fi offload to be truly valuable, the customers' quality of service needs to be just as good as it would be on the cellular network, rather than a second-class network customers are stuck with when data demand is high. Operators must consider unregulated and unlicensed spectrum as another asset in their radio network, and must manage it appropriately or fail to maximise its revenue and service potential."
XCellAir ensures that operators can offload data to Wi-Fi without affecting the customer experience. It does this by unlocking unused unlicensed spectrum capacity, and tracking and fixing access point-level issues before these affect the quality of service.
Download the full report at http://xcellair.com/resources/