A world of connections

Editor’s Note: This article first appeared in RCR Wireless News’ January Special Edition: “Unwrapping the Opportunities, the next generation of smart devices. To see all of the articles from that issue, click here.
Every year we sit back and marvel at the advances made in the mobile space over the previous 12 months with thoughts that we will never see such advances again. And every year we do it all over again.
This “sitting back” typically occurs at the yearly Consumer Electronics Show, where manufacturers from around the world trot out their latest and greatest devices to an increasingly hungry mass of consumers. While the biggest attention-grabbers are televisions that seem to grow larger in screen size in direct proportion to their shrinking thickness, recent trends have been around embedding some form of wireless technology or another into just about all devices.
This “de-wiring” has included both the connections between devices as well as the connection between devices and the Internet. All those jokes from years past about your refrigerator talking to your microwave or accessing the Internet are no longer jokes. They are reality.
Wireless industry observers for years have tried to forecast the potential of mobile device, with the most attention given to Ericsson’s claim of 50 billion connected devices by 2020. While the company admits that this number is as much a marketing initiative as it is a real forecast, the claim is not without some merit.
Device makers are rapidly installing wireless technology into just about anything going out their doors. Whether these connections are for short-range wireless (Wi-Fi, Bluetooth, Zigbee) or wide area cellular networks, it seems that a device without some sort of radio embedded within is last year’s news.
This rush to wireless has put a tremendous strain on wireless carriers, which are throwing billions of dollars on both managing their existing network assets as well as trying to build out new platforms, and has begun to garner the interest of government regulators, who are coming under increased pressure to make sure these wireless connections remain open.
Carrier reaction
The biggest challenge for continued growth could come from wireless carriers, which are struggling mightily to contain rampant data usage on their networks so that the more than 250 million mobile customers in the United States, and more than 4 billion worldwide, can all have a pleasing experience.
You need look no further than AT&T Mobility’s infamous struggles with Apple Inc.’s iPhone to know that 3G networks are not ready to handle the data needs of an increasingly savvy public.
Domestically, carriers for the most part have used data caps and steep overage charges as a way to moderate usage by what they term a handful of consumers who abuse the networks. These caps initially were put into place shortly after the launch of 3G networks as customers began to realize the benefits of having Internet access from a wide area, cellular network. What started out as unlimited access plans quickly were replaced by many carriers with a 5 gigabyte cap that drew the ire of consumers brought up on unlimited wired Internet connections.
These capped solutions were targeted at the computer crowd, who were using either plug-in wireless modems or embedded solutions to link their laptops to a carrier’s cellular network. These devices included traditional Web browser and capabilities that quickly ate up precious network capacity that was required to serve voice customers.
More recently, data caps have been put in place for smart phones. While still lacking some of the functionality and capabilities of true laptops, smart phones do have access to mobile video content that has been cited as causing much of the network congestion issues. While laptops have traditionally been capped at 5 GB per month for around $50, some carriers have instituted 2 GB caps, priced at between $25 and $30 per month.
Another way carriers have attempted to manage excessive use of their wireless resources is by overage charges that attempt the novel concept of charging people for what they use. While this model seems to make sense in theory, these overage charges have drawn the ire of consumers surprised by additional charges on their monthly bills.
Carriers have tried to implement procedures designed to warn consumers when they are nearing the end of their allotted bucket of data and about to enter the unknown of overages, but those steps have so far not diminished the concern.
Policy changes
Wireless carriers’ attempts to manage their networks has raised the ire of many who think that regardless of connection method, no one should be allowed to impede access to the Internet. This has raised the stakes on Capitol Hill, where Congress and the Federal Communications Commission have struggled with keeping access to the Web clear of impediments, while at the same time giving the mobile industry the ability to keep its networks up and running.
The FCC, for its part, has acknowledged the strain being put onto mobile carriers and is trying to open up additional airwaves that can alleviate some of the capacity concerns. However, with most predicting an ever-increasing demand for network capacity and the proven history of delays in getting spectrum to market, it’s increasingly looking like a showdown is near.
The FCC was expected in late December to vote on controversial network neutrality rules. Recognizing that mobile broadband is at an early development stage, FCC Chairman Julius Genachowski has said the agency would only step in to regulate the sector if operators were showing anti-competitive or anti-consumer behavior. Operators will be required to not block legitimate content and devices on their networks and must be transparent.
Regarding wireless, Genachowski said openness principles are important, but the agency recognizes the differences between mobile and fixed broadband services.
“Accordingly, the proposal takes important but measured steps in this area – including transparency and a basic no-blocking rule,” Genachowski said in early December. “Under the framework, the FCC would closely monitor the development of the mobile broadband market and be prepared to step in to further address anti-competitive or anti-consumer conduct as appropriate.”
New networks
In addition to trying to manage usage at the consumer level, carriers have also been busy updating their networks with advanced technology designed to provide greater speeds, and thus require consumers to spend less “time” transmitting data, as well as improved efficiency.
The basis for these advanced networks is an all-IP core infrastructure that allows the data being transmitted to be broken down into bits of data instead of the traditional packet-based or circuit-switched methods of 2G and 3G networks. These networks include those using WiMAX and LTE technology.
Similar to the efficiency gains provided by networks that switched from analog to digital technologies, the move to an all-IP core allows carriers to jam a much greater volume of information into a smaller piece of spectrum. Wireless carriers are spending tens of billions of dollars this year on improving their networks, most of which is being targeted for the deployment of these advanced networks.
As a sample of the increasing pressure advanced devices are putting on mobile networks, mobile network management software provider Arieso noted in a study that in using Apple’s previous generation iPhone 3GS as a baseline, customers using the recently launched iPhone 4 download 41% more data to their device and spend 67% more time connected to a carrier’s network.
However, those numbers pale in comparison to consumers using devices powered by Googl
e Inc.’s Android operating system. According to Arieso’s data, con
sumers using Samsung Electronics Co. Ltd.’s Galaxy devices typically download 126% more data than those using the iPhone 3GS, while consumers using HTC Corp.’s Desire device download 41% more data than the ubiquitous iPhone 3GS user.
Perhaps most interesting information from Arieso is that consumers using more advanced devices are not placing any more voice calls, highlighting the increasing data-focus of modern smart phones.
Arieso noted this data shows that wireless operators need to rethink how they are pricing their wireless services to take advantage of consumer demand for data offerings as well as to help manage network traffic.
“Smart-phone subscriptions are rising and so too is subscriber appetite for mobile data,” said Michael Flanagan, CTO of Arieso. “Since the launch of the iPhone3G, we’ve seen a multitude of popular new smart phones arrive on the market, successfully driving app and service usage. It’s a trend that’s set to continue. Operators must now be able to quantify the impact of the devices they support, and how subscribers use them, and prepare their networks accordingly.”
These impacts are only expected to increase over the next 12 months as more advanced devices like tablets and netbooks begin connecting to current networks. That should be just enough time for us to sit back and marvel at what is to come.