"CDMA2000 & Wi-Fi: Making a BusinesCase for Interoperability" by Brian O’Shaughnessy
Ïåðâîèñòî÷íèê: http://www.3gnewsroom.com/html/whitepapers/2003/WiFi_Article_9-26-03.pdf
Executive Summary
The data capabilities of Wi-Fi and hot spot services are often compared to those of CDMA2000. The two technologies will co-exist successfully serving different purposes. CDMA2000 is ideally suited for mobile applications and road warriors while Wi-Fi is well suited for private networks such as enterprises, campuses and homes. Yet CDMA2000 operators are beginning to look at Wi-Fi to augment their networks in areas such as airports where data usage is expected to be high.
Wi-Fi could augment CDMA2000 systems in high traffic areas but it is not a substitute for high-speed wide area networks (WAN) technologies such as CDMA2000. The two systems will achieve similar speeds depending on the backhaul used by the hot spot operator. CDMA2000 1xEV-DO provides speeds comparable to a hot spot using a T1 backhaul (e.g., T-Mobile operated hot spots), and CDMA2000 1X provides
speeds similar to a hot spot using a DSL backhaul (e.g., Cometa hot spots). This paper discusses the unique value proposition of CDMA2000 and the role Wi-Fi could play in a CDMA2000 network.
Wi-Fi’s Mixed Market Potential
According to recent studies by analyst firms such as Forrester Research and Strategy Analytics, the number of laptops with built-in Wi-Fi will grow from 24% in 2003 to at least 80%, or 141 million, by 2008. Meanwhile, the number of Wi-Fi hot-spots1 in the United States are forecasted to grow from 3,020 at the end of 2002 to 12,080 in 2003 and more than 72,000 in 2007, according to the Yankee Group.
But measured in terms of the ability to provide a dependable, extensive mobile broadband service, that growth is less impressive. Take coverage, which traditionally is one of the key yardsticks that consumers and enterprises use when picking a wireless provider. With each hot spot covering, at best, a radius of less than 200 feet, 12,080 hot spots wouldn’t provide seamless coverage of the borough of Manhattan, let alone the entire United States.
In June 2003, Singapore’s MobileOne abandoned plans to supplement its 3G network with Wi-Fi because hot spot coverage wasn’t extensive enough to meet customer needs during a four-month trial. “The business model does not appear to be
workable, according to customer feedback, as users don’t like having to stay within 50 to 100 meters of the hot spot,” a MobileOne spokesman told Reuters.
Furthermore, the addressable Wi-Fi market will remain small compared to the size of the wireless industry. Even when the number of Wi-Fi laptops hits 141 million in 2008, that’s still only about one-third of the number of cell phones sold industrywide in 2002.
Why Wi-Fi Isn’t Necessarily Broadband
The articles and analyst reports that are bullish on Wi-Fi usually make this argument: Wi-Fi delivers 11 Mbps, which is significantly faster than 3G, so consumers and business users will opt for Wi-Fi wherever it’s available. Assuming that data rates are a decisive factor – an assumption that overlooks factors such as coverage and security – also assumes that most hot spots deliver data rates faster than CDMA2000. But that’s not necessarily the case.
Take 802.11b, the most widely used type of Wi-Fi. Its theoretical maximum data rate is 11 Mbps, but with all Wi-Fi technologies, including 802.11b, at least half of the available bandwidth is consumed by radio overhead. To get the remaining throughput of about 5.5 Mbps, the user would have to be no more than a few feet from the access point (AP),2 and the Wi-Fi provider would need to equip that AP with backhaul capable of delivering the full 5.5 Mbps.
Considering that the vast majority of public hot spots use, at best, a T-1 line for backhaul, the real-world throughput would be only about 1 Mbps.3 Add in factors such as other users and a weak signal, and the throughput is cut to hundreds of kilobits per second.
By comparison, an optimized CDMA2000 1xEV-DO network can consistently deliver 500 kbps even when the user is a mile or more away from the cell site.4 In better conditions, throughput may be over 1 Mbps, which is at least as fast, if not faster, than 802.11b. So if throughput really is that important to most consumers and business users, then Wi-Fi has little or no advantage over CDMA2000.
Barriers to Wi-Fi Deployment and User Adoption
The low cost of Wi-Fi infrastructure suggests that the service can be deployed quickly, easily and affordably. Although that assumption is correct to a certain extent, it also ignores several key issues, such as coverage, roaming, backhaul, interference and security, all of which affect deployment and user adoption.
Coverage
A single AP can cover, at best, a radius of only about 200 feet, so hundreds of
APs are necessary to provide seamless coverage just in, say, a downtown.5
For example, Qualcomm has roughly 200 APs throughout its San Diego campus, yet Wi-Fi coverage is still spotty. To put that in perspective, 200 APs is roughly 15% of Boingo Wireless’ total worldwide network.6 So even though APs are relatively inexpensive, the cost of seamless coverage for just a campus or downtown quickly adds up. To blanket 10 square kilometers, a Wi-Fi network would require roughly 650 APs. By comparison, nine CDMA2000 1xEV-DO cell sites could cover the same area.
Roaming
Roaming is key to the success of any wireless technology that can’t offer extensive, let alone ubiquitous, coverage from day one.7 Although Wi-Fi aggregators and operators such as Boingo and Wayport have made significant progress toward expanding coverage through roaming agreements, for most users, logging on to another provider’s hot spot usually means tinkering with their device settings or providing a credit card number.8
The catch is that a Wi-Fi provider can’t simply partner with any hot spot operator in another area – assuming that another operator even covers that area – without first ensuring that the potential partner can meet certain guidelines, such as secure connections and detailed usage statistics for billing.
Backhaul
In most analyst reports and articles in the trade and mainstream press, the role of backhaul in Wi-Fi doesn’t get the attention that it deserves. That’s ironic because backhaul directly affects a topic that is always covered: data rates. Yet Wi-Fi’s real- world data rates are at least half of their theoretical peak rates due to factors such as signal strength, interference and radio overhead. Backhaul can reduce the remaining throughput even further.9
For example, some Wi-Fi operators recently have begun emphasizing that a T-1 provides backhaul for each of their APs. Meanwhile, small Wi-Fi operators, such as a coffee shop owner, typically use DSL or cable for backhaul – assuming that their ISP even allows commercial re-use.10 At best, cable, DSL or a T-1 line is capable of providing far less than 2 Mbps, a rate that is reduced even more when multiple users share the same AP.
Backhaul can make or break the business case for a public Wi-Fi service. The average cost of a T-1 line is approximately $750 per month, which is too expensive for individual Wi-Fi operators to make a business case for, let alone justify giving away as part of a loss leader Wi-Fi service aimed at attracting more customers to a coffee shop or hotel. If the Wi-Fi service charges, say, $30 per month for unlimited use, each AP requires almost 25 subscribers just to pay for backhaul.11 Few places have the population density necessary to have that many paying Wi-Fi users within range of each AP.
As noted ealier, the average cost of a T1 line is approximate $750. In
comparison, the cost to offer backhaul for data on a CDMA2000 network is essentially free, as the expense is subsidized by the voice network’s use of the connection. This provides CDMA2000 operators a huge advantage in offering data to their subscribers.
Another big issue is backhaul availability. In many places, weeks or months can pass between the time that a T-1 is ordered and when it’s provisioned. That can delay an aggressive, widespread Wi-Fi rollout.
Interference
Wi-Fi uses unlicensed spectrum, so service can be launched more quickly and less expensively than if spectrum first has to be acquired.
But on the other hand, unlicensed spectrum means no regulatory recourse against interference. Worse, the most popular type of Wi-Fi, 802.11b, uses the crowded 2.4 GHz band, which already is home to a myriad of other technologies, including Bluetooth, cordless phones and microwave ovens.
A technology that is inherently vulnerable to interference is difficult to market as more than a best-effort service. Without some basic QoS guarantees, a wireless service – Wi-Fi or otherwise – won’t be attractive to business and enterprise users.
Mitigating interference can be difficult or impossible. For example, public Wi-Fi is still a relatively new service, so building owners have limited experience with the technology. As a result, it’s rare to see a lease that includes provisions covering Wi-Fi, such as giving a leaseholder exclusive rights to offer Wi-Fi in all or part of a building. The exception is airports, where increased concerns about security have resulted in a trend toward leases that limit leaseholders’ ability to install their own Wi-Fi networks.12
Most airports now prefer or require a single Wi-Fi operator, which either becomes the exclusive provider for the facility or leases service to other providers.
Security
Most Wi-Fi APs and modems use the Wired Equivalent Privacy standard, which is very susceptible to hacking and eavesdropping. In June 2003, the Wi-Fi industry completed a new standard, Wi-Fi Protected Access (WPA), to plug security holes.
Many vendors say that they plan to offer software upgrades so that owners of newer APs and modems can add WPA, but anecdotal13 and scientific evidence show that few users know or bother to turn on WEP.
Meanwhile, the Wi-Fi industry is working on 802.11i, which offers more security than WPA, but it’s unclear when the technology will be commercially available.
One thing is certain: 802.11i’s architecture is so different from WEP and WPA that it can’t be offered as a software upgrade. Instead, users will have to replace their equipment, potentially slowing adoption of 802.11i. CDMA is inherently much more secure than Wi-Fi. For example, it’s immune to “wardriving,” where a user with a Wi-Fi device can search for other nearby Wi-Fi users and capture their data traffic as it
travels between their modem and the AP. CDMA also is a service that’s offered only by large, established telecom providers, which are companies that recognize the importance of end-to-end security and know how to add it to their networks.
The Business Case for Linking Wi-Fi and CDMA
Wi-Fi’s significant limitations beg the question, why would a CDMA operator want to add Wi-Fi to its portfolio of high-speed data services?
One major reason is that Wi-Fi can be a convenient way to offload some high- bandwidth data, freeing the CDMA network to focus on delivering voice and high- speed data to users who are mobile. Another reason is that although the addressable Wi-Fi market is small compared to CDMA, it’s still significant. By offering a complementary Wi-Fi service, a CDMA operator can establish and strengthen relationships with more broadband users, particularly enterprise customers.
To provide Wi-Fi services, a CDMA operator can partner with a Wi-Fi provider or, when possible, leverage a sister company that provides Wi-Fi service by reselling
its service, just as a wireless division may get long distance from its sister division. The latter option often helps avoid some of the technical and business hurdles related to linking two disparate networks.
Wi-Fi providers can be divided into two types – operators and aggregators –
with the distinction based on whether they own the hot spots that they use to provide
service. That distinction affects their ability to be an effective partner for mobile operators.
There is a wide variety of operators, ranging from the owner of a coffee shop with a single AP to regional and national operators such as Cometa Networks and Wayport. The common denominator is that operators own all or most of their hot spots, although they may supplement them through roaming agreements with aggregators or other operators.
By comparison, aggregators such as Boingo Wireless, GRIC Communications and iPass own few, if any, hot spots. Instead, using a “virtual operator” business model, they partner with Wi-Fi operators and resell their service to mobile operators, end users, or both.
Operators and aggregators can be attractive partners for CDMA operators because they reduce the time, cost and risk of launching a hot spot service. By partnering with Boingo, for example, a CDMA operator can offer its customers Wi-Fi service in more areas and more quickly than if it deployed its own hot spots or cut multiple deals with individual Wi-Fi operators. Established operators and aggregators also have a good understanding of a CDMA operator’s needs, including authentication, backhaul, billing, roaming and QoS.
Technical Options for Linking Wi-Fi and CDMA
There are multiple ways to link a CDMA network to one or more Wi-Fi networks in order to provide seamless broadband service. The choice depends on factors such as the operators’ back-office systems and the types of users they’re pursuing.
The linkage also can be divided into two areas: the network and the user device.
Network
Linking CDMA and Wi-Fi networks involves both business agreements and engineering. The business issues typically include negotiating service-level agreements and determining how much visibility each provider has into its partner’s network for identifying and resolving problems. The key technical issues generally
involve billing and authentication, and they tend to be more challenging when the networks are owned by different companies rather than by different divisions of the same company.
The Wi-Fi provider must be able to authenticate the CDMA user, track his usage and then deliver that information in a format compatible with the CDMA operator’s billing systems.14 The hurdles may be political. For example, one CDMA operator said that it originally wanted to get the same information from its Wi-Fi partner’s RADIUS AAA server that it was pulling from its server, but the partner couldn’t deliver, so they had to compromise.
The hurdles also can be technical, such as a Wi-Fi partner that can’t track usage by a certain criteria or can’t deliver the usage information in a format that’s compatible with the CDMA operator’s billing system. Indeed, Cometa Networks has said that it plans to use a flexible, granular billing system as a way to differentiate itself from other Wi-Fi operators and make itself attractive to mobile operators.
Major Wi-Fi providers clearly recognize the importance of interoperability with
3G. Boingo Wireless, for example, is working with TSI Telecommunication Services on back-office systems to support roaming between 3G and Wi-Fi. In a July 2003
interview with Reuters, TSI’s CEO said that three major mobile operators are testing the system, where features include better support for integrated billing.
At the same time, many mobile operators see integrated billing as a way to differentiate themselves and reduce costs, such as printing and mailing separate bills. For users, a single monthly bill for 3G and Wi-Fi is a convenience that could be one more barrier to churn.
Wireless industry standards bodies have done their part to enable 3G/Wi-Fi interoperability. One example is Mobile IP, which eases handoffs between disparate networks so that they’re not noticeable to users or programs, such as e-mail, that balk when their IP connection changes. These technologies are particularly useful for a CDMA operator that targets vertical markets such as law enforcement, where a police cruiser may use Wi-Fi within a block of the station but then switch to 3G when it moves out of range.
Dozens of infrastructure vendors, large and small, have launched or are developing network technology to support 3G/Wi-Fi interoperability and established security standards such as IPSec. For example, Lucent Technologies offers CDMA infrastructure that supports security features such as VPNs and handoffs between 3G and Wi-Fi regardless of where the data session originated.
User Devices
The hardware and software necessary for users to alternate between CDMA and Wi-Fi varies by the type of device they use. For example, some users might have a dual-mode CDMA/Wi-Fi PC card modem for their laptops,15 while others might have a laptop with built-in Wi-Fi and a separate CDMA PC card.
In both cases, the laptop, Tablet PC or PDA also will need software to manage the connection. One example is PCTEL’s Segue client software, which the CDMA operator can configure to look for the CDMA network first and then fall back on Wi-Fi. Users with Windows XP laptops and Windows
Mobile 2003 PDAs also benefit from those operating systems’ ability to sense available networks, regardless of technology. Client software such as Segue can automatically switch users to CDMA as they move out of Wi-Fi coverage while maintaining services such as virtual private networks (VPNs).
However, a growing consensus argues that seamless switching isn’t
necessary to attract users because in most cases, they’ll be stationary while using their laptops rather than moving in and out of coverage at pedestrian or vehicular speeds.
Examples of Commercial CDMA/Wi-Fi Services
Thanks to a wide variety of network and device solutions, linking CDMA2000 and Wi-Fi networks to provide a user-friendly broadband service is a viable option. Sprint PCS and Verizon Wireless are two examples of CDMA operators that offer
Wi-Fi.
Sprint PCS
In July 2003, Sprint PCS announced plans to offer Wi-Fi service in more than
2,100 U.S. locations by early 2004. The “PCS Wi-Fi Access” service will use a combination of hot spots owned and operated by Sprint and, via roaming agreements, with Wi-Fi operators such as Wayport, Airpath Wireless and Cometa Networks. The Sprint-owned hot spots will be in prime locations frequented by business users, including airports, convention centers and hotels.
PCS Wi-Fi Access leverages the company’s existing PCS Connection Manager client software, which has been expanded to identify hot spots owned by Sprint or its roaming partners and automatically connect users.
Verizon Wireless
Verizon Wireless’ parent company, Verizon Communications, offers several Wi-Fi services. In November 2002, Verizon Communications began offering turnkey Wi-Fi packages for small businesses that include design and installation. At the time,
the company said that it was the first step in “an eventual nationwide rollout of wireless LAN services.” In May 2003, Verizon Communications launched a hot spot service in New York city by adding Wi-Fi to its pay phones. Verizon Wireless could leverage Verizon Communications’ Wi-Fi portfolio by reselling some or all of those services.
In August 2003, Verizon Wireless launched a Wi-Fi service by teaming with Wayport, a partnership that was originally announced in March 2003. Under the agreement, Verizon Wireless customers with Wi-Fi laptops and PDAs can get access from more than 500 Wayport hot spots across the United States.
To use the service, Verizon Wireless customers must supply their own Wi-Fi modem, such as one that’s built into their laptop’s motherboard or a PC card that plugs into a laptop or PDA. Although Verizon Wireless isn’t selling Wi-Fi PC cards or CDMA2000/Wi-Fi PC cards, it does provide its Wi-Fi customers with free client
software that automatically detects when they’re within range of a Verizon Wireless hot spot.
Verizon Wireless is advertising the Wi-Fi service’s peak data rates as 1.544
Mbps, or T-1 speeds. One key feature is single billing: Wi-Fi data, CDMA voice and
CDMA data all appear on the same monthly bill.
Other Potential CDMA Services
Several other CDMA operators are in a good position to offer Wi-Fi. One example is KT Freetel of South Korea, that offers an extensive hot spot service in public places such as subway stations under the brand NESPOT. SK Telecom is another South Korean CDMA operator that is working to add Wi-Fi to its portfolio.
In December 2002, Bell Mobility’s parent company, Bell Canada, began adding Wi-Fi to its payphones in Montreal and Toronto. In July 2003, the Bell AccessZone service was expanded to VIA Rail trains. If Bell AccessZone graduates from a trial to a commercial launch, Bell Mobility could leverage that investment by reselling it as part of a bundled CDMA/Wi-Fi service.
Conclusion: Wi-Fi and CDMA Are Complements, Not Competitors
Wi-Fi’s impressive growth can’t be denied. Businesses and consumers continue to adopt the technology, in homes, campuses and enterprises. Many CDMA2000 operators are investigating Wi-Fi and its potential benefits to augment their networks, yet the power of CDMA2000 should not be overlooked. Backhaul limitations on Wi-Fi hot spots do not allow the technology to offer significantly greater user experiences than CDMA2000 1xEV-DO. Wi-Fi’s significant shortcomings are in key areas such as security and coverage, which means that it will remain a niche technology – albeit a useful one.
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