The Business Value of Mobile Data Offload - Accuris Networks Whitepaper

The Business Value of Mobile Data Offload A White Paper

The Business Value of Mobile Data Offload

A White Paper

© Accuris Networks 2010 Page 2 of 23

EXECUTIVE SUMMARY

With the increasing use of rich content over mobile networks, operators are looking for ways to manage the growing demand for bandwidth while keeping costs under control, and without losing the relationship with their subscribers. In this white paper we:

• Discuss the background to the rising demand for mobile bandwidth and look at some of the approaches being used to address the congestion problem.

• Focus on Data Offload, explaining why it should be a key element in any operator’s longer-term plans.

• Show how Network Operators who provide a seamless mobile Wi-Fi offload experience for their consumers will create a substantial opportunity to save costs by diverting low value, high volume data traffic to an alternative access network and by creating a powerful, mass market engine that differentiates their offers and drives top-line growth.

Mobile broadband traffic has grown dramatically in the past few years. The chief reasons for this are the increasing use of smartphones, the availability of flat-rate voice and data bundles, and higher demand for entertainment services like YouTube, Apple’s iTunes and services such video streaming from Television Networks. This increase in data traffic is forecast to accelerate, placing greater pressure on network capacity. At the same time, there is also greater competition for subscribers, with a corresponding downward pressure on revenue per subscriber. This means mobile network operators need solutions that help them reduce network congestion while also helping them reduce costs and retain customers. A variety of point solutions can be applied to improve aspects of network performance. These include traffic management, backhaul and infrastructure upgrades. However, Network Operators realise that such options provide shorter-term relief and only apply as long as the user stays inside the operator’s network. They would like a comprehensive solution that addresses user behaviour in the real-world, i.e. that supports roaming from one network type to another, and allows users to receive and enjoy quality services from their Operator regardless of their location and choice of network access. This is where mobile data offload offers a solution with real business value. While all options should be considered, Data offload should be a priority because of the promise it holds for rapidly delivering reduced congestion and significant cost reduction for operators while also improving the operator’s reach to its customers.

© Accuris Networks 2010

THE ECONOMIC IMPLICATIONS OF

The extent of mobile data growth is widely reported. A recent study by Allot Communications2009 confirms the sheer scale of the half yearly increase across three regions globally and goes on to show it’s breakdown by application type.

This report reveals that streaming over HTTP is the application of choice for today's mobile user. P2P traffic (File sharing applicationsas significant, clogging up the busiest five per cent per cent overall.

1 Allot MobileTrends – Global Mobile Broadband traffic report, H2 2009

The Business Value of

THE ECONOMIC IMPLICATIONS OF MOBILE DATA GROWTH

extent of mobile data growth is widely reported. A recent study by Allot Communications2009 confirms the sheer scale of the half yearly increase across three regions globally and goes on to show it’s breakdown by application type.

port reveals that streaming over HTTP is the application of choice for today's mobile user. P2P applications based on protocols such as BitTorrent, eDonkey

as significant, clogging up the busiest five per cent of cells to the tune of 34 per cent, compared to 12

HTTP downloads account for 19 per cent of all mobile data, worldwide, while browsing consumes 27 per cent and streaming (over HTTP) accounts for 29 per cent of the total. VoIP and IPniche applications, filling only three per cent when combined, leaving other applications to consume the remaining three percent. YouTube videos account for 32 per cent of the streamed total and 10% of worldwide mobile data traffic while Facebook interactions grew by 180 percent during H2 2009 (almost double this in Asia) and according to official Facebook statistics from January 2010, there are now more than 65 million active users actively accessing the site through their mobile devices.

Global Mobile Broadband traffic report, H2 2009 – Feb 2010


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MOBILE DATA GROWTH

extent of mobile data growth is widely reported. A recent study by Allot Communications1 for H2 2009 confirms the sheer scale of the half yearly increase across three regions globally and goes on to

port reveals that streaming over HTTP is the application of choice for today's mobile user. P2P eDonkey and Gnutella) is almost

of cells to the tune of 34 per cent, compared to 12

HTTP downloads account for 19 per cent of all mobile data, worldwide, while browsing consumes 27 per cent and streaming (over HTTP) accounts for 29 per cent of the total. VoIP and IP are still niche applications, filling only three per cent when combined, leaving other applications to consume the remaining three percent.

YouTube videos account for 32 per cent of the streamed total and 10% of worldwide mobile data

ok interactions grew by 180 percent during H2 2009 (almost double this in

according to official Facebook statistics from January 2010, there are now more than 65 million active users actively accessing the site through their mobile devices.


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Three takeaways from these findings are very significant for carriers:

1. The economic value of each data byte switched over the mobile network varies and flat fee monetization of data transmission is potentially leaving a lot of revenue on the table.

2. Some of the bandwidth hungriest applications are actually consumed while the mobile device is not on the move – while the user is at home; in a coffee shop; at college etc.

3. Questions remain as to what revenue is being left for the operator and what they should be taking advantage of within the business model. The following points highlight the categories of revenue generating services as a percentage of traffic being generated:

o Direct revenue services (Voice, IM & Other Apps) account for 6% of traffic

generated

o Indirect revenues services (HTTP Browsing (Web advertising) and HTTP Download [MSP-channelled content) account for 46% of traffic generated

o End-user services traffic, albeit in flat-rate revenue plan, account for 19% of

traffic generated

o 29% of traffic has little or no potential to generate added revenues 29%. (Depending on the nature and monetisation of the P2P which may also fall into this category)

Operators must realise how traffic volumes are apportioned and respond with appropriate revenue-generating services. For the increasingly higher demands of mobile broadband traffic, the great majority contributes quite indirectly (or maybe, not at all) to increased revenues (either channelled content-transactions or contributions to flat-rate plans). While the case for offloading low value, resource intensive traffic to cheaper and faster fixed wireless technologies such as Wi-Fi is undoubtedly very strong, to allow an operator develop incremental revenues beyond connectivity, any such network handoff must still enable the user to access operator brokered content such as app stores, Music decks; portals or screens driving advertising revenues.

Market Response

The response by most advanced operators in the market to data congestion is to adopt, in varying degrees, the following approaches:

1. Traffic Management - Policy control, service filtering, data compression and content adaption

2. Backhaul upgrades 3. Infrastructure upgrades

- RAN, LTE 4. Data offload

- Wi-Fi, WiMAX, Femtocell The first two approaches do not address all the issues created by real-world user experience as they move from network to network. They, and Approach 3, should, in time, help Operators to deliver more cost efficient data capacity and speeds, while potentially delaying the need for a full upgrade to IP and 4G.


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The concept of using low cost WLAN networks to extend or infill the Mobile Network Operator’s service coverage is not a new one. Early convergence implementations included BT’s ‘Fusion Service’; Orange/France Telecom’s ‘LiveBox’ service in France; T-Mobile’s Hotspot@Home service in the U.S.; TeliaSonera’s HomeFree service in Denmark and Telecom Italia’s Unico service in Italy. These all showed great promise in 2006 as a means of leveraging wireless and DSL services to offer a low cost consumer/business voice offering. They presented an effective response to the threat posed by VoIP providers. However, most of these services did not achieve commercial success as there was no compelling business case to move this traffic to an alternative access network.

Data is a different story. The recent explosion of mobile data traffic, fuelled by mobile broadband ‘dongle’ adoption and smart devices such as the Apple iPhone is set against a commercial backdrop where following several years of relatively slow uptake, data charging models have evolved to an unlimited fixed fee basis for many. The result… Data traffic is surging, but operators cannot monetise that growth to the same extent.


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MEETING THE CHALLENGE WITH MOBILE DATA OFFLOAD

Mobile Data Offload provides a compelling solution for operators who want to reduce congestion on their mobile broadband network while retaining a connection to their subscribers. There is little debate now amongst carriers on whether there is sufficient evidence of demand for a mobile Wi-Fi offload service. Data congestion in operators such as O2 UK and AT&T hit the headlines in the second half of 2009 – Wi-Fi was presented as a solution and uptake numbers have also been shared publicly: “AT&T, an industry leader in Wi-Fi with the nation’s largest Wi-Fi network, today reported its highest-ever number of Wi-Fi connections made on its network in a single quarter. Continuing the record pace of Wi-Fi growth, AT&T customers made 25.4 million Wi-Fi connections in the third quarter — exceeding the 20 million connections made in all of 2008 and nearly equalling the 25.6 million connections made in the first half of 2009.... For the first time, the number of Wi-Fi connections made by smart phones and other integrated devices in the third quarter surpassed connections from laptops. Sixty percent of all AT&T Wi-Fi connections were made from integrated devices, up from 49 percent in the second quarter. More than 27 million AT&T customers have Wi-Fi access included with their qualifying smart phone…Many of the most popular AT&T smart phone handsets support auto-authentication at AT&T Wi-Fi Hot Spots, and in the third quarter, AT&T also expanded Wi-Fi availability to select Windows Mobile devices. AT&T broadband connections — which include both wireline broadband and wireless Laptop Connect cards — grew by 138,000 in the third quarter to reach 17.1 million in service. ” 2

Wi-Fi offload – a technical and a commercial alternative

With loss-making data-use segments beginning to emerge across wireless customer bases3, many operators have been exploring radical measures that not only protect profitability but also prevent excessive loading of any of the core network elements spanning signalling; air interface and backhaul. Throttling bandwidth is an operational fix available to most networks, which can limit the bandwidth or priority assigned to the heavy data users. Communicating this change to the customer is somewhat more complex however, and calls for fundamental redesign of the mobile data tariff to that of service class – a path that most cannot fully consider until their peer group/competitors decide to do the same. Much more interesting for many carriers has been to reconsider the role of Wi-Fi as a viable strategy to provide a high-speed alternative to users who may not require full mobility (‘Nomadic’ users) as they consume data on their mobile device.

2 AT&T Press release, Oct 23rd 2009 - http://www.att.com/gen/pressroom?pid=4800&cdvn=news&newsarticleid=27298 3 Tarek Elmasry, McKinsey & Company; Rutberg Wireless Influencers Keynote; October 2009


As an offload technology, Wi

1. It is cost effective

that leverages unregulated bandwidth and consumer grade connectivity

2. It is widely available

many mobile devices.

3. It is widely usedand applying this to mobile is arguably a route thatclosest to the service

Most importantly, through many initial deployments, the business case for WLAN offload has now been proven conclusively. This is true for offloading domestic mobile data traffic and in an international roaming context where data charges create significant ‘bill shock’ surprises foconsumers.

The Business Case for Data Offload

Data offload offers a compelling direct and indirect business case for the mobile operator. First and foremost it addresses a large and growing base of mobile broadband and Wiusers and zones, at a key pain point for these customers broadband service domestically and a cheaper alternative to Data roaming when abroad. Data offload also offers longnetwork infrastructure. During the coming years, operators with mobile broadband offerings must strive to maximise efficiency in their networks to remove the potential impact of cost to deliver the service rising quicker than the associated revenues.


As an offload technology, Wi-Fi presents three important benefits to the mobile operator:

It is cost effective – to access and to set up using off the shelf, mass market equipment that leverages unregulated bandwidth and consumer grade connectivity

It is widely available – in the home; in many public places; and most importantly, on devices.

It is widely used – many consumers already use Wi-Fi technologies to access the Internet and applying this to mobile is arguably a route that matches the endclosest to the service-provider cost-model.

many initial deployments, the business case for WLAN offload has now been proven conclusively. This is true for offloading domestic mobile data traffic and in an international roaming context where data charges create significant ‘bill shock’ surprises fo

The Business Case for Data Offload

Data offload offers a compelling direct and indirect business case for the mobile operator. First and foremost it addresses a large and growing base of mobile broadband and Wiusers and zones, at a key pain point for these customers – how to enjoy a faster, better mobile broadband service domestically and a cheaper alternative to Data roaming when abroad.

Data offload also offers long-term benefits with platforms potentially becoming enabling components of During the coming years, operators with mobile broadband offerings must strive

to maximise efficiency in their networks to remove the potential impact of cost to deliver the service uicker than the associated revenues.


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Fi presents three important benefits to the mobile operator:

to access and to set up using off the shelf, mass market equipment that leverages unregulated bandwidth and consumer grade connectivity

in the home; in many public places; and most importantly, on

Fi technologies to access the Internet matches the end-user revenue-model

many initial deployments, the business case for WLAN offload has now been proven conclusively. This is true for offloading domestic mobile data traffic and in an international roaming context where data charges create significant ‘bill shock’ surprises for smart phone mobile

Data offload offers a compelling direct and indirect business case for the mobile operator. First and foremost it addresses a large and growing base of mobile broadband and Wi-Fi capable smartphone

how to enjoy a faster, better mobile broadband service domestically and a cheaper alternative to Data roaming when abroad.

tentially becoming enabling components of During the coming years, operators with mobile broadband offerings must strive

to maximise efficiency in their networks to remove the potential impact of cost to deliver the service


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A clearly defined long-term network strategy is key to ensure that any investment is not wasted further down the line. This is particularly true for integrated operators, which have the option to reduce overall spending across their networks by streamlining across both fixed and mobile infrastructure, particularly in the core network. Like all mixtures, protecting mobile broadband profitability requires a subtle blend of ingredients to really hit the mark.

Incremental Revenue

A seamless Wi-Fi offering will provide an attractive up-sell opportunity to existing mobile data bundles; either as a flat-fee, mobile roaming charge (MRC), or perhaps a free feature that can then be charged through usage. With a global offering combining existing WISP agreements and adding those brought by the solution providers Aggregator partnerships, it should also be possible to compete well with any of the direct to consumer (D2C) services and drive at least $5.00 per subscriber per month showing good margins.

Customer Acquisition

The offering would offer a much richer mobile experience than any of the WISPs can compete directly with – this is likely to create an “acquisition and retention” effect.

Cost Saving

By off-loading low value, high volume data from a high-cost, regulated mobile service to mass market, unregulated Wi-Fi must deliver a cost saving to the carrier. That said, we have seen different cost calculations for Mobile operator data delivery and observed that no two operators seem to calculate this in the same way. At the lowest cost case, some of the per Mb charges are comparable with Wi-Fi aggregator wholesale costs. However as operators increasingly form direct relationships with WISPs, we expect there to be a dramatic cost advantage to the operator in using Wi-Fi as part of their data delivery strategy.

International Roaming Impact

There is also a negative impact to consider. Offering the subscriber an alternative to mobile data consumption whilst roaming may have a cannibalistic effect on International Data roaming revenues. That said, consensus received from many carrier conversations anticipates that this impact should be small and that the additional revenue opportunity provided by an international Wi-Fi offering would almost certainly close any gap. The reduced cost of bill shock repayments should also be helpful. For many mobile carriers this has affected profitability significantly over the past 18 months or so.

Infrastructure Benefit

A good data offload solution can potentially play a wider role in extending service support to other technologies such as WIMAX or LTE, e.g. providing support for interworking of voice and messages services between 2G/3G and LTE. Essentially, capex can replace opex in the short term if it is justified by a longer-term return on investment. Therefore, ‘LTE readiness’ becomes crucial from a corporate as well as an operational perspective.


Mobile Wi-Fi Offload

Wi-Fi is clearly working for AT&T and O2 in the UK with the iPhone, and both China Mobile and Softbank in Japan have announced WiFurthermore, their use of Wi A number of profile partnerships between Mobile network operators and WLAN providers are already in production:

• July 2008 – O2 UK agreed a partnership with BT Openzone and The Cloud, the two largest Hotspot providers in the UK

• November 2008 – AT&T acquired Wayport for $275m; gaining 20,000 hotspots across the US and 80,000 globally

• July 2009 – Verizon announced a partnership with Boingo Wireless for their mobile and DSL customers

T-Mobile itself purchased a nationwide WLAN hotspot netwo2001 with the acquisition of VoiceStream (a legacy of the MobileStar Network footprint) and has been very committed to building out a global T

International as well as National

Another consequence of the historically low mobile data consumptions has been the very high cost of International Data roaming on the mobile network. With smartphones and Broadband ‘dongles’ consuming considerable volumes of data very most Mobile operators in recent quarters. As such, communications such as that sent last year by AT&T, particularly to iPhone users, advising them turn off Data roaming and suggesting the use of Wialternative have been quite common.


Fi Offload – Lessons learnt from the First Generation

g for AT&T and O2 in the UK with the iPhone, and both China Mobile and Softbank in Japan have announced Wi-Fi offload as an important element of their network strategies. Furthermore, their use of Wi-Fi shows how the solution can even be deployed on a per

A number of profile partnerships between Mobile network operators and WLAN providers are already in

O2 UK agreed a partnership with BT Openzone and The Cloud, the two largest Hotspot providers in the UK

AT&T acquired Wayport for $275m; gaining 20,000 hotspots across the US

Verizon announced a partnership with Boingo Wireless for their mobile and DSL

Mobile itself purchased a nationwide WLAN hotspot network (including all Starbucks US outlets) in 2001 with the acquisition of VoiceStream (a legacy of the MobileStar Network footprint) and has been very committed to building out a global T-Mobile branded WISP service since.

International as well as National Off-Load Use cases

Another consequence of the historically low mobile data consumptions has been the very high cost of International Data roaming on the mobile network. With smartphones and Broadband ‘dongles’ consuming considerable volumes of data very easily, bill shock refunds have been a significant cost to most Mobile operators in recent quarters. As such, communications such as that sent last year by AT&T, particularly to iPhone users, advising them turn off Data roaming and suggesting the use of Wialternative have been quite common.


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Lessons learnt from the First Generation

g for AT&T and O2 in the UK with the iPhone, and both China Mobile and Fi offload as an important element of their network strategies.

Fi shows how the solution can even be deployed on a per device basis.

A number of profile partnerships between Mobile network operators and WLAN providers are already in

O2 UK agreed a partnership with BT Openzone and The Cloud, the two largest

AT&T acquired Wayport for $275m; gaining 20,000 hotspots across the US

Verizon announced a partnership with Boingo Wireless for their mobile and DSL

rk (including all Starbucks US outlets) in 2001 with the acquisition of VoiceStream (a legacy of the MobileStar Network footprint) and has been

Mobile branded WISP service since.

Another consequence of the historically low mobile data consumptions has been the very high cost of International Data roaming on the mobile network. With smartphones and Broadband ‘dongles’

easily, bill shock refunds have been a significant cost to most Mobile operators in recent quarters. As such, communications such as that sent last year by AT&T, particularly to iPhone users, advising them turn off Data roaming and suggesting the use of Wi-Fi as an


User experience

While undoubtedly, there is strong demand for Mobile Wireleases that of the addressable market of 44m subscribers who can access Wiaccesses were made over a 3 month period. A quick scan of online user forums reveals many frustrations and concrete blocking factors to mass adoption of these services categorised in four ways:

1. Client software

users to register for the service via an online portal (Using their Verizon Username and password) and download software to their device that will ahotspot

While there is clear demand for this service there is huge online frustration with the way it is executed… mostly relating to the need for specific client software and the impact of the background processing this client has on the performance of their equipment:


While undoubtedly, there is strong demand for Mobile Wi-Fi offload it is notable from the above releases that of the addressable market of 44m subscribers who can access Wiaccesses were made over a 3 month period.

A quick scan of online user forums reveals many frustrations and concrete blocking factors to mass adoption of these services – mainly through inconsistent user experiences. These complaints were

software – needs to be downloaded to the Wi-Fi device. Verizon’s service requires users to register for the service via an online portal (Using their Verizon Username and password) and download software to their device that will allow them to connect to a Wi

While there is clear demand for this service there is huge online frustration with the way it is executed… mostly relating to the need for specific client software and the impact of the

processing this client has on the performance of their equipment:


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Fi offload it is notable from the above releases that of the addressable market of 44m subscribers who can access Wi-Fi for free, only 25.4m

A quick scan of online user forums reveals many frustrations and concrete blocking factors to mass mainly through inconsistent user experiences. These complaints were

Fi device. Verizon’s service requires users to register for the service via an online portal (Using their Verizon Username and

llow them to connect to a Wi-Fi

While there is clear demand for this service there is huge online frustration with the way it is executed… mostly relating to the need for specific client software and the impact of the

processing this client has on the performance of their equipment:


2. Discovery – is a great problem for the mobile consumer. Is the Wi

can see, a partner for their Mobile operator? What about SSIDs that say ‘Free public Wi- why are they being prompted for payment? Is this part of their carrier deal? There is lots of user confusion in this space.

3. Authentication

login’ facility which involves device ID based authentication (MAC Address) by placing a cookie on the device via the cellular connection. User forums are full of questions about this facility not working; being prompted for Usernames and passwords; not being abremember the password; reset procedures etc.

4. Service continuitypoor service-experience. Most customers expect that they will be able to access premium content and carrier services they have subscribed to. Not so Wi-Fi offload implementations today, the carrier has effectively lost control of their subscriber while they are in the Wiare not sufficiently secure for many carriers to open access to premium services such music or Mobile TV. This is a real disappointment for consumers…


is a great problem for the mobile consumer. Is the Wican see, a partner for their Mobile operator? What about SSIDs that say ‘Free public Wi

are they being prompted for payment? Is this part of their carrier deal? There is lots of user confusion in this space.

Authentication – is highly variable. Carriers such as AT&T and O2 offer an ‘Automated facility which involves device ID based authentication (MAC Address) by placing a

cookie on the device via the cellular connection. User forums are full of questions about this facility not working; being prompted for Usernames and passwords; not being abremember the password; reset procedures etc.

Service continuity – even when Wi-Fi Login has been achieved, customers can suffer a experience. Most customers expect that they will be able to access premium

content and carrier services they have subscribed to. Not so – in effect, with the majority of offload implementations today, the carrier has effectively lost control of their

subscriber while they are in the Wi-Fi zone. Usernames/passwords, Cookies and device IDs are not sufficiently secure for many carriers to open access to premium services such music or Mobile TV. This is a real disappointment for consumers…


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is a great problem for the mobile consumer. Is the Wi-Fi network that they can see, a partner for their Mobile operator? What about SSIDs that say ‘Free public Wi-Fi’

are they being prompted for payment? Is this part of their carrier deal? There is lots

is highly variable. Carriers such as AT&T and O2 offer an ‘Automated facility which involves device ID based authentication (MAC Address) by placing a

cookie on the device via the cellular connection. User forums are full of questions about this facility not working; being prompted for Usernames and passwords; not being able to

Fi Login has been achieved, customers can suffer a experience. Most customers expect that they will be able to access premium

in effect, with the majority of offload implementations today, the carrier has effectively lost control of their

Fi zone. Usernames/passwords, Cookies and device IDs are not sufficiently secure for many carriers to open access to premium services such as music or Mobile TV. This is a real disappointment for consumers…


Limiting Technology

As the Wi-Fi offload market becomes more mature, and user expectations move beyond Internet browsing, it is becoming apparent that the technical approach employebringing a Mobile Wi-Fi offload service to market is too restrictive to stimulate mass adoption going forward. For most deployments the Winot interconnected in any way with the Mobile Network but through an sometimes automated using ‘connection manager’broadcast (which allows the subscribers to recognise a partner’s access point) and aagreement, the user may authenticate with a partner WLAN network to enjoy faster Internet service.

This configuration has the advantage of being very easy to set up, and while it certainly delivered on the original vision of offloading Internet browsing traffic, mainly from laptop PCs, the market has since evolved considerably:

• Carriers are working with many Wi

meaning that it is difficult and impractical to ask for an Access pobroadcast with the operator name difficult to have a common and automated approach to billing with the non integrated approach.

• Many more devices need to be supported

to consume large volumes of data and well as Laptop PCs with broadband dongles.

• Users change their devices

made portable.


Fi offload market becomes more mature, and user expectations move beyond Internet browsing, it is becoming apparent that the technical approach employed by many Carriers and WISPs in

Fi offload service to market is too restrictive to stimulate mass adoption going

For most deployments the Wi-Fi networks are non-integrated. This means that the Wited in any way with the Mobile Network but through an

sometimes automated using ‘connection manager’ software on the device, perhaps secondary SSID broadcast (which allows the subscribers to recognise a partner’s access point) and aagreement, the user may authenticate with a partner WLAN network to enjoy faster Internet service.

This configuration has the advantage of being very easy to set up, and while it certainly delivered on loading Internet browsing traffic, mainly from laptop PCs, the market has since

Carriers are working with many Wi-Fi partners both Nationally and Internationally meaning that it is difficult and impractical to ask for an Access point identifier, the SSID, to be broadcast with the operator name – making discovery more difficult; it is also much more difficult to have a common and automated approach to billing with the non integrated

Many more devices need to be supported – Smartphones and Tablets are now beginning to consume large volumes of data and well as Laptop PCs with broadband dongles.

Users change their devices more frequently – so device based authentication needs to be


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Fi offload market becomes more mature, and user expectations move beyond Internet d by many Carriers and WISPs in

Fi offload service to market is too restrictive to stimulate mass adoption going

This means that the Wi-Fi network is ted in any way with the Mobile Network but through an agreed login mechanism,

software on the device, perhaps secondary SSID broadcast (which allows the subscribers to recognise a partner’s access point) and a batch based billing agreement, the user may authenticate with a partner WLAN network to enjoy faster Internet service.

This configuration has the advantage of being very easy to set up, and while it certainly delivered on loading Internet browsing traffic, mainly from laptop PCs, the market has since

both Nationally and Internationally - int identifier, the SSID, to be

making discovery more difficult; it is also much more difficult to have a common and automated approach to billing with the non integrated

Smartphones and Tablets are now beginning to consume large volumes of data and well as Laptop PCs with broadband dongles.

so device based authentication needs to be


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• More data services need to be accessible – As mobile operators explore other ways of

monetizing data (Portals, App stores, premium content, Pay-TV etc) it will be very limiting not to be able to access these services if your device is connected to Wi-Fi.

• Security is becoming a much bigger deal – spoofing an identity to get free Internet access

is not difficult. As the value of operator brokered digital merchandise increases, access control and non-repudiation becomes much more critical.

• Users expect more and have choice – they will switch providers to get the service they

want.


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A NEW APPROACH TO WIFI OFFLOAD (3GPP I-WLAN)

Encouraged by the relative success of the first Wi-Fi offload experiments, a priority for both Mobile operator and WISP communities has been to devise improvements that would deliver a more ubiquitous; more automated; more secure; and ultimately more utilized mobile Wi-Fi offload experience. Consequently, technical working groups from both the Wi-Fi and Mobile Operators’ worlds have re-visited standardisation around areas such as security and authentication in light of the fact that an increased number of devices accessing Wi-Fi networks going forward will be cellular handsets. A number of important improvements have now been specified:

• SIM Authentication – where the subscriber credentials contained on the SIM/USIM card can be used to authenticate capable Cellular devices on the Wi-Fi network. The Internet Engineering task force (IETF) extended their EAP (Extensible authentication protocol - as defined in RFC 3748) to create new methods known as EAP-SIM (2G network) or EAP-AKA (for 3G networks), specified in RF5247. In parallel the Wi-Fi Alliance worked on an evolution of the draft WISPr protocol that permits roaming between public hotspot providers. The new version, WISPr 2.0, uses SIM or USIM data for Public Wi-Fi sign on.

• Mobile Network Interworking – specification of hardware and software elements required for these newly defined authentication methods to interact with the mobile network. The components specified by the 3GPP included a WLAN Access Gateway (WAG) to handle the policy enforcement and accounting functions and additional Packet data gateway (PDG) functionality to handle session management, IPsec tunnel termination routing and charging events in the interaction between the connected device with the core packet services of the operator. These specifications have been defined under a 3GPP architecture known as I-WLAN4 (3GPP Specification 24.327).

4 http://www.3gpp.org/ftp/Specs/html-info/24327.htm


Architecture and Terminology

The 3G I-WLAN network architecture includes three individual networks:

1. the WLAN-Access 2. potentially, a visited 3G PLMN (not shown in 3. the home 3G PLMN

The WLAN-AN includes the wireless Access authentication, Authorisation, accounting (AAA) proxy and the WLAN

The Wireless Access Points provide connectivity to mobile users and act communicate with an AAA proxy via the RADIUS or Diameter protocol to convey user subscription and authentication information. Note that in the 3GPP Iassumed to be capable EAP- The AAA proxy relays AAA information between the WLAN and the home 3G PLMN. The NAS allows only legitimate Wi-Fi network users to have access to the public InternetPLMN (AccuROAM) that authenticates the actual SIM subscriptto 3G PLMN networks. In the case where the I-WLAN cohandles I-WLAN connectivity)information to the I-WLAN Server (located in the home 3G PLMN), and a wireless access gateway (WAG), which is a data gateway that routes users’ data to the home 3G PLMN. The home 3G PLMN includes the Ipacket data gateway (PDG) and the core network elements. In early deployments of WLAN interprovide RADIUS based interfaces. towards Diameter based interfaces. Currently, the network architecture that integrates 3G and WLAN specifies two different access scenarios (according to 3GPP Technical Specification 23.234


Architecture and Terminology

WLAN network architecture includes three individual networks:

ccess Network (WLAN-AN, provided by the serving Wireless ISP);visited 3G PLMN (not shown in the figure);

the home 3G PLMN.

AN includes the wireless Access Points (APs), the Network Access Servers (NAS), the authentication, Authorisation, accounting (AAA) proxy and the WLAN-access gateway (WAG).

The Wireless Access Points provide connectivity to mobile users and act as AAA clients, which communicate with an AAA proxy via the RADIUS or Diameter protocol to convey user subscription and authentication information. Note that in the 3GPP I-WLAN model, the Wireless Access Points are

-SIM/EAP-AKA.

e AAA proxy relays AAA information between the WLAN and the home 3G PLMN. The NAS allows only users to have access to the public Internet [it is the home AAA server in the

PLMN (AccuROAM) that authenticates the actual SIM subscriptions], and finally, the WAG is a gateway

WLAN connects through a visited PLMN (i.e. where a Roaming Partner PLMN WLAN connectivity), the visited 3G PLMN includes an AAA proxy that forwards AAA

WLAN Server (located in the home 3G PLMN), and a wireless access gateway (WAG), which is a data gateway that routes users’ data to the home 3G PLMN.

The home 3G PLMN includes the I-WLAN Interface network elements, including the AAA server packet data gateway (PDG) and the core network elements.

In early deployments of WLAN inter-working, a significant number of WLAN access networks will provide RADIUS based interfaces. It is anticipated that over time WLAN access networks

based interfaces.

Currently, the network architecture that integrates 3G and WLAN specifies two different access 3GPP Technical Specification 23.234).


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AN, provided by the serving Wireless ISP);

Points (APs), the Network Access Servers (NAS), the access gateway (WAG).

AAA clients, which communicate with an AAA proxy via the RADIUS or Diameter protocol to convey user subscription and

WLAN model, the Wireless Access Points are

e AAA proxy relays AAA information between the WLAN and the home 3G PLMN. The NAS allows only [it is the home AAA server in the , and finally, the WAG is a gateway

.e. where a Roaming Partner PLMN visited 3G PLMN includes an AAA proxy that forwards AAA

WLAN Server (located in the home 3G PLMN), and a wireless access gateway (WAG), which is a data gateway that routes users’ data to the home 3G PLMN.

Interface network elements, including the AAA server and the

working, a significant number of WLAN access networks will WLAN access networks will migrate

Currently, the network architecture that integrates 3G and WLAN specifies two different access


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WLAN Direct IP Access

This scenario provides to a user an IP connection to the public Internet or to an intranet via the WLAN access network. Both the user and the network are authenticated to each other using the EAP-SIM or EAP-AKA protocols. The confidentiality and integrity of users’ data transferred over the air interface is ensured by the 802.11i security framework.

WLAN 3GPP IP Access

This scenario allows a user to connect to packet switch based services e.g. MMS, Location-Based Services or to the public Internet, through the 3G PLMN packet core network. The user is authenticated to the 3G PLMN using the EAP-SIM or alternatively the EAP-AKA protocol encapsulated within IKEv2 messages. The execution of IKEv2 is also used for the establishment of an IPSec based VPN tunnel between the user and the PDG that provides confidentiality and integrity services to the data exchanged between them.

Real world challenges

The use of SIM Authentication in I-WLAN standards is relatively recent. So too is the sudden tsunami of data use from smartphones and mobile broadband devices that is making all data adoption predictions look conservative. These short timeframes has meant that until now, the majority of public and residential Wi-Fi Access Points currently deployed do not support Mobile SIM authentication. More prevalent, particularly in the case of Public Wi-Fi service-providers who have launched a roaming service with other WISPs has been the adoption of WISPr/Universal Access Method (UAM). Without support for WISPr/UAM or EAP-SIM/AKA, Wi-Fi interworking for 3G subscribers faces an insuperably high barrier to widespread adoption.


THE ACCURIS NETWORKS

Accuris Networks is a wireless interworking specialist with a 15dissimilar wireless technologies to interoperate. Our platforms have been proven at scale with service providers such as Iridium; Globalstar; Telecom Italia Mobile; Cellcom; Pelephone; Deutsche TelecomTelecom New Zealand, AlltelANSI-41/EvDO and GSM/UMTS networks. The same technology has also been used within a network standard to enable an innovative outsourced service that allows an early stage mobile operator utilize the roaming agreements of a more esresulted in very large subscriber numbers being supported by our systems. Accuris Networks has developed a data offload solution that removes many user barriers by fully integrating the mobile network with Wibecomes a seamless extension of their mobile service. Called AccuROAM, we believe the solution is unique in that it approaches the problem with a deep understanding of Mobile technand a 15 year history of making dissimilar wireless technologies interoperate. AccuROAM is more usually installed in the carrier network but can equally be hosted by Accuris Networks. In the context of mobile Wifollows:

• Provides direct access to the locally connected IP network (e.g. Wi-Fi connection).

• Securely extends the full range of mobile operator data services to the Wiconsumer.

• Provide seamless Access, Authentication and Authorisation (AAA) services to the 3GPPInterworking System based on


NETWORKS SOLUTION TO DATA OFFLOAD

Accuris Networks is a wireless interworking specialist with a 15-year history building solutions that allow technologies to interoperate. Our platforms have been proven at scale with service

providers such as Iridium; Globalstar; Telecom Italia Mobile; Cellcom; Pelephone; Deutsche TelecomTelecom New Zealand, Alltel and MACH to support seamless Interworking fun

41/EvDO and GSM/UMTS networks. The same technology has also been used within a network standard to enable an innovative outsourced service that allows an early stage mobile operator utilize the roaming agreements of a more established carrier in another market resulted in very large subscriber numbers being supported by our systems.

Accuris Networks has developed a data offload solution that removes many user barriers by fully network with Wi-Fi (or other IP networks such as WIMAX or LTE) such that it

becomes a seamless extension of their mobile service. Called AccuROAM, we believe the solution is unique in that it approaches the problem with a deep understanding of Mobile technand a 15 year history of making dissimilar wireless technologies interoperate. AccuROAM is more usually installed in the carrier network but can equally be hosted by Accuris Networks.

-Fi offload, the key functions of the AccuROAM platform

access to the locally connected IP network (e.g. accessing

the full range of mobile operator data services to the Wi

Access, Authentication and Authorisation (AAA) services to the 3GPPInterworking System based on the mobile credentials of the user


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Page 17 of 23

SOLUTION TO DATA OFFLOAD

year history building solutions that allow technologies to interoperate. Our platforms have been proven at scale with service

providers such as Iridium; Globalstar; Telecom Italia Mobile; Cellcom; Pelephone; Deutsche Telecom, and MACH to support seamless Interworking functions between Satellite,

41/EvDO and GSM/UMTS networks. The same technology has also been used within a network standard to enable an innovative outsourced service that allows an early stage mobile operator utilize

tablished carrier in another market – an application that has

Accuris Networks has developed a data offload solution that removes many user barriers by fully Fi (or other IP networks such as WIMAX or LTE) such that it

becomes a seamless extension of their mobile service. Called AccuROAM, we believe the solution is unique in that it approaches the problem with a deep understanding of Mobile technology/standards and a 15 year history of making dissimilar wireless technologies interoperate. AccuROAM is more usually installed in the carrier network but can equally be hosted by Accuris Networks.

platform are summarised as

accessing the Internet from a

the full range of mobile operator data services to the Wi-Fi connected

Access, Authentication and Authorisation (AAA) services to the 3GPP-WLAN


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Features of AccuROAM

1. A carrier grade infrastructure to which a mobile operator can connect any Wi-Fi network (Own

Network, 3rd party Wireless ISP or Aggregator) featuring all the components necessary to deliver a seamless user experience; from authentication and service continuity through to billing.

2. Seamless and secure login using SIM credentials to authenticate Wi-Fi attached subscribers back in the home MNO network.

3. Techniques for enabling SIM authentication on Access points that do not support the new standard EAP-SIM.

4. Full mobile operator services offload via secure VPN tunnel including not just Internet access but also carrier brokered data services (portal, app stores & other packet core services), text messaging and MMS.

5. Full service support for voice, by converting all standard circuit-switched 2G/3G functions into SIP - including call origination, calls termination and supplementary services.

6. Full service support for messaging, by converting all standard 2G/3G SMS functions into SIP - including message origination and message termination.

7. IMS compliance and a strong service roadmap to enable service-providers to take practical steps toward genuine converged services.

8. Billing conversion from the RADIUS records prevalent in the Wi-Fi world to TAP records that can be easily ingested by any mobile network.

9. Pre-integrated partnerships for handset clients and Public hotspots should an operator require them.

Benefits of AccuROAM

1. A single centralized hub from which a mobile operator, or operator Group can quickly aggregate a large number of Wi-Fi hotspot partnerships and manage them is in a consistent way.

2. A secure and seamless way for users to access Wi-Fi networks from their mobile device. 3. Enables the MNO to keep their subscriber ‘on-net’ – no confusing landing pages or loss of control. 4. The wider role it can play in extending service support to other technologies such as WIMAX or LTE 5. By maintaining control, the MNO can provide their full set of network services; exclude certain

services if desired, or introduce new charging structures for premium IP services. 6. Allows MNO to brand the user experience regardless of which (or whose) access network they are

attached. 7. Enables MNO access to all usage and billing records for single bill, marketing analysis and security. 8. A mass market proposition with big gains to be had in all business case drivers:

o Cost saving: Bill Shock reduction (International data roaming); network asset offload

o Customer Acquisition/retention: A truly differentiated and useful service offering an ‘always best connected’ promise

o Revenue generation: Opportunity to charge a premium on regular data plans or international roaming ‘bolt on’ additions i.e. Your roaming ‘passport’ now comes with Wi-Fi. Also a vehicle through which operator brokered premium content is more readily accessible…currently not the case with first generation Wi-Fi offload solutions.

AccuROAM enables interoperability between GSM or ANSI-41 cellular networks and IP Network variants; including WIMAX, Wi-Fi and LTE. Residing on proven, highly available Telco grade hardware offering ‘rack and stack’ scalability, AccuROAM can either deployed centrally in the carrier’s core network or hosted by Accuris Networks. It


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is the most comprehensive, carrier grade Wi-Fi offload solution on the market today; both in the depth of service support it delivers and in its breadth.


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ACRONYMS AND DEFINITIONS

Acronym Definition Comments 802.11 802.11 is a standard

developed by IEEE for Wireless Networking.

It offers a range of data speeds up to 11 Mbit/s. Typical operating range is of the order of a hundred metres. The technology can be used for network access, as well as setting up adhoc peer to peer networks. 802.11 operates in the 2.4GHz unlicensed frequency bands (2400-2483.5 MHz). The air interface uses Direct Sequence Code Division Multiple Access (DS-CDMA).

802.1x 802.11 is a standard developed by IEEE for port-based Network Access Control (PNAC).

It provides an authentication mechanism to devices wishing to attach to a LAN, establishing an authenticated point-to-point connection. It is used for securing wireless 802.11 access points and is based on the Extensible Authentication Protocol (EAP).

AAA Authentication, Authorization and Accounting

• Authentication (determines who is allowed to access a resource and almost always comes first)

• Authorization (determines what the authenticated user may do) • Accounting (logging the actions taken / resources used by the user)

AP Access Point Commonly described as a Wi-Fi hot spot

Aggregator WISP Aggregator For the purpose of this document, a commercial entity that has secured resale agreements from several Wireless hotspot service providers in order to broker wholesale relationships with 3rd parties

DHCP Dynamic Host Configuration Protocol

A computer networking protocol used by end-user devices (DHCP clients) to retrieve IP address assignments and other configuration information. DHCP uses a client-server architecture. The client sends a broadcast request for configuration information. The DHCP server receives the request and responds with configuration information from its configuration database.

DNS Domain Name Server A hierarchical naming system for computers, services, or any resource connected using Internet Protocol. It associates information with domain names assigned to each of participant organisations. Primarily, it translates domain names meaningful to humans into the numerical (binary) identifiers associated with networking equipment for the purpose of locating and addressing these devices worldwide.

EAP Extensible Authentication Protocol

EAP is a universal authentication framework frequently used in wireless networks and Point-to-point connections. It is an authentication framework, not a specific authentication mechanism and it provides both common functions and a negotiation of the desired authentication mechanisms. There are up to 40 different methods currently defined under this framework by the IETF (Internet Engineering task force) …several vendor specific methods and proposed methods also exist.

EAP-SIM An EAP authentication method that uses GSM SIM data and cryptographic algorithms derived from a 2G mobile Network

EAP-AKA Is a 3G equivalent for EAP-SIM which uses a stronger3G authentication algorithm instead of a the 2G one

GPRS General Packet Radio Subsystem

GSM The Global System for Mobile communications.

In this document, the most relevant GSM standards are GPRS, EDGE and UMTS FDD and TDD mode


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SIM Subscriber Identification Module

A smart card inserted in a handset or mobile device used for authentication on a digital mobile network

SSID The name or identifier broadcast by a WLAN access point

LAN Local Area Network For example IEEE 802.3 Ethernet

MNO Mobile Network Operator Company that provides and supports telecommunications services and typically holds any licences that are required to provide service.

MRC Mobile Roaming Charge The end-user charge applied to subscribers when they roam beyond the home network service area.

Public WLAN

A subscription-based network where access is provided and Call Detail Records are generated. Public Wireless LAN can be operated by a mobile operator. Public WLAN provides a range of services that may include local services and corporate access. Internet access shall be provided in accordance with the user’s subscription through the corporate access or by the WLAN operator network

RADIUS Remote Access Dial-in User Server

Remote Authentication Dial In User Service (RADIUS) is a networking protocol that provides centralized Authentication, Authorization, and Accounting (AAA) management for computers to connect and use a network service. RADIUS is a client/server protocol that runs in the application layer, using UDP as transport. The Remote Access Server, the Virtual Private Network server, the Network switch with port-based authentication, and the Network Access Server, are all gateways that control access to the network, and all have a RADIUS client component that communicates with the RADIUS server. The RADIUS server is usually a background process that serves three functions: 1. to authenticate users or devices before granting them access to a network, 2. to authorize those users or devices for certain network services and 3. to account for usage of those services.

TKIP Temporal Key Integrity Protocol

TKIP was designed by the IEEE 802.11i task group and the Wi-Fi alliance as a solution to close security vulnerabilities (link layer) on already deployed hardware. It’s endorsed name is Wi-Fi Protected access (WPA) whis was first implemented in 2002 and further refined in 2004; now known as WPA2.

UICC Universal Integrated Circuit Card

is the smart card used in mobile terminals - In a GSM network, the UICC contains a SIM application and in a UMTS network it is the USIM application

WLAN Wireless Local Area Network Wireless Local Area Network. The most relevant standards in relation to this document are IEEE 802.11b, 802.11a, the remainder of the wireless 802.11.x standards, along with ETSI Hiperlan/2.

WISP Wireless ISP Definition as per Public WLAN

WISPr Wireless Internet Service Provider roaming

WISPr - Pronounced, "whisper," is a draft protocol submitted to the Wi-Fi Alliance that allows users to roam between wireless internet service providers, in a fashion similar to that used to allow cellphone users to roam between carriers. It covers best practices for authenticating users via 802.1X or the Universal Access Method (UAM), the latter being another name for browser based login at a captive portal hotspot. It requires that RADIUS be used for AAA and defines the required RADIUS attributes.


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COPYRIGHT NOTICE

© 2010 Accuris Networks Inc, All rights reserved. This document or any part thereof may not, without the written consent of Accuris Networks, be copied, reprinted or reproduced in any material form including but not limited to photocopying, transcribing, transmitting or storing it in any medium or translating it into any language, in any form or by any means, be it electronic, mechanical, xerographic, optical, magnetic or otherwise.

The information contained in this document is proprietary and confidential and all copyright, trademarks, trade names, patents and other intellectual property rights in the documentation are the exclusive property of Accuris Networks unless otherwise specified. The information (including but not limited to data, drawings, specification, documentation, software listings, source or object code) shall not at any time be disclosed directly or indirectly to any third party without Accuris Networks’ prior written consent. The information contained herein is believed to be accurate and reliable. Accuris Networks accepts no responsibility for its use by any means or in any way whatsoever Accuris Networks shall not be liable for any expenses, costs by damage that may result from the use of the information contained within this document. The information contained herein is subject to change without notice.


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Contact us at:

Global Headquarters Address 7th & 8th Floor O’Connell Bridge House,

D’Olier St., Dublin 2, Ireland.

Website Phone Fax Map

www.accuris-networks.com +353 1 8818700 +353 1 8818701 Get Directions

North America and Latin America Address Accuris Networks Inc.

1 Batterymarch Park Quincy, MA 02169 Boston, USA

Website Phone Fax

www.accuris-networks.com +1 303 500 5101 +1 720 206 0984

Far East Address Accuris Networks Malaysia,

Suite 32-1, Wisma UOA II, 21 Jalan Pinang, Kuala Lumpur 50450, Malaysia

Website Phone Fax

www.accuris-networks.com +60 3 2175 0401/9 +60 3 2171 2967

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The Business Value of Mobile Data Offload - Accuris Networks Whitepaper

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