The world’s largest wireless network equipment vendor is kicking off CTIA 2013 with a suite of new carrier grade Wi-Fi solutions, further committing itself to a market that analysts say is poised to take off. “The carrier Wi-Fi space is red hot right now,” said Richard Webb of Infonetics Research. “[It’s] driven by the explosion in demand from mobile operators using Wi-Fi to augment their 3G/4G deployments and offload a portion of mobile data traffic to unlicensed spectrum.”
But that offload is not always a smooth experience for users. “Traditionally Wi-Fi has been treated more as a separate network where the device attaches to Wi-Fi under its own control,” explained Dave Park, who heads Ericsson’s Wi-Fi product line. He said Ericsson’s goal is to integrate Wi-Fi into the mobile operator’s network to create a transparent user experience that is “device independent.”
Today Ericsson is launching a suite of software and hardware aimed at integrating Wi-Fi into carrier networks. Its real-time traffic steering solution is a network software upgrade that constantly assesses performance indicators in both the 3GPP network and the Wi-Fi network to find the best connection for the user. The company is also adding support for access selection to enable load balancing between 3GPP and Wi-Fi networks.
Ericsson is also introducing integrated management of Wi-Fi and 3GPP networks on a common platform. “Wi-Fi, LTE, W-CDMA and GSM are managed from one platform,” said Park. “This grouping of features and products really kind of makes Wi-Fi transparent, makes it part of the standard mobile operators’ networks it enables. Just like … on standard 3GPP technology where the phone and the network together to pick the best network, it basically folds Wi-Fi into that family.”
$3.7 billion opportunity
Carriers increased their spending on Wi-Fi access points and Wi-Fi hotspot controllers by 53% in 2012, according to Infonetics, and the firm is projecting that this market will be worth $3.7 billion by 2017.
Ericsson made it clear that it wants a big part of this market when it purchased Wi-Fi equipment and software developer BelAir Networks last year. With the BelAir team now “fully integrated,” Ericsson says it has developed the first 802.11ac access point designed to enable supplemental small cell or standalone Wi-Fi coverage indoors. Park says it increases the user experience to “gigabit levels.” The company is also bringing to market a Wi-Fi controller that it says can support up to 10,000 access points and 500,000 – 750,000 concurrent subscribers.
In this market, Ericsson faces some very aggressive competitors that specialize in carrier-grade Wi-Fi equipment. Park admits that Ericsson may not always come to market with the lowest prices, but says his company’s goal is to offer customers the best cost of ownership and the best value.
Timing is everything
According to Infonetics Research, some operators are rushing to deploy Wi-Fi access points in desirable locations, often with the intent of replacing them down the road with dual mode 3G/Wi-Fi and LTE/Wi-Fi small cells. The research firm says this “land grab” is accelerating the pace of Wi-Fi deployments.
But the latest earnings reports from two publicly traded carrier grade Wi-Fi suppliers tell a different story. Both Ruckus Wireless (RKUS) and Aruba Networks (ARUN) surprised investors by missing their earnings estimates this spring. Richard Valera, who covers both Ruckus and Aruba for Needham & Company, says the companies blame delayed orders from carriers. But Valera says carrier grade Wi-Fi remains a “large, important long-term opportunity” and he currently has a “buy” rating on Aruba and a “hold” on Ruckus.
Of course it’s possible that some of the delayed orders reported by Ruckus and Aruba will turn out to be shifted orders that end up going to other providers. Certainly Ericsson intends to be a major presence here, and it joins a growing group of companies ready to help carriers offload traffic to unlicensed spectrum.
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