The cost of providing a wide area network for broadband wireless data to a large userbase is very high, both in terms of number of cellsite locations, cellsite equipment and increasingly more important, the broadband transmission back to the central switching centres. The use of femtocells allows the mobile operator to provide a high level of data service using the owners broadband link and complementing that with outdoor coverage as part of the package.
Data users can be divided into two categories based on the type of device they use:
- Standard phone users
- Smartphone users
- Laptops for mobile broadband
a) Standard phone users currently use relatively small amounts of bandwidth. The takeup of intensive data applications for individual phones, such as MobileTV, has been poor. What is important to users is the latency when accessing services (ie time for the screen to refresh/update) rather than the volume of data. The benefit of 3G is therefore the user experience and fast interaction for simple/short transactions rather than the high capacity or continuous bandwidth which would drain the battery quickly. These needs can arguably be served from 3G macrocell coverage quite adequately. We have seen operators offer tariff plans which allow almost unlimited use for data on the phone itself (i.e. excluding VoIP or use as a modem for a laptop).
b) Smartphone users run applications
The most common is probably email access, which has been popularised by the Blackberry. This application was originally developed and optimised for 2G and can operate very effectively with low bandwidth and data consumption. Most newer phones allow remote access to standard email mailboxes using POP3 and IMAP, which requires much more capacity. There are also a growing range of applications, such as navigation, travel information, and music download which require greater capacity. Again the performance of 3G will improve the user experience considerably, but for many of these the very high data rates enabled by HSDPA are arguably not required.
c) Laptop use
This can either be with a dedicated datacard/adaptor which incorporates a full 3G modem, or using a standard 3G phone as a modem. This can be a heavy user of data are requires both network capacity and bandwidth, effectively competing with the user experience of fixed broadband services. This is where the real battleground of data services will be fought, competing against fixed line DSL and potentially WiMax offerings.
For those who use their laptop computers anywhere outside their home, or move house/share facilities, then a mobile broadband offer may be attractive. Coverage and data rates will differ from the fixed network, and higher rates may be achievable from the mobile networks in some cases. Packages offering unlimited use (subject to a fair use policy, which effectively does set a limit) are more commercially risky and expensive for mobile operators to offer. Whilst such packages are available, they usually ban high bandwidth file sharing applications and some also block VoIP services such as Skype to protect their voice revenues.
Such mobile broadband packages will compete with those offered using WiFi hotspots, but have the significant advantage that the service is much more widely available and accessible. The service available using WiFi can be patchy and low quality when sharing a hotspot with many other users, although the growing number of roaming agreements and lower cost subscription options is increasing use for the regular business traveller. We have also seen tariffs which offer time-limited access to mobile broadband.
Security generally is seen as less of an issue for WiFi networks than a few years ago, with more home WiFi hotspots supplied with security turned on and unique passwords. However, the concern about logging into WiFi access points with your username/password (or worse your credit card details in full) leave user open to "man in the middle" attacks where hackers simulate the experience of logging onto a hotspot in order to capture those details. This is not a concern for 3G mobile users where authentication using a SIM card happens automatically in the background.
Perhaps the factors which will sway takeup of this proposition are more about usability and (perceived) cost. WiFi is a mature solution now which has become very easy to use, with default settings automatically locking onto regularly used hotspots at home and work. It is also perceived as free within the home/office. If mobile broadband can match that experience (and cost), it could attract additional usage when outside which would provide much sought after upside to data revenues.