US Cellcos are building WiFi in secret like there is no tomorrow

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In the run up to IBC, we spokes to Alcatel’s Nick Cadwgan (we assume it is pronounced Cadogan), the company’s marketing lead for Carrier Wi-Fi. He revealed that he has a customer in the US where Alcatel cares for 2 million WiFi end points on a single network and as well as 250,000 Access Points . But he was not allowed to say what we all know, which is that Comcast has to be that customer, because no-one else has that many end points.

You might argue that AT&T does. It has 16.5 million broadband customers but since it has not turned any of them in to Homespots yet by adding a second SSID that only leaves Comcast. Cadwgan still refused to admit it.

Alcatel is helping this customer and 50 others to build out their WiFi offering so that it works all the time, every time, by adding things like customer self-activation, customer care and authentication, all of which equate to instant network scalability. One of the biggest issues is putting policies out there onto smartphones inside Apps.

His first points were that the market for Carrier WiFi s already here and really very healthy. Now 56% of all WiFi connections are from smartphones and tablets, so he makes the point that only a vendor that can understand cellular is well placed to help. We’re not so sure.

Secondly he talks about there being 3.7 billion WiFi connectible devices out there today. And then reminds us that 80% of the tablets that are connected today are connected over WiFi only. We know.

We remind him that Verizon had a great quarter shipping tablets with LTE connections built in to tablets and he says, “This is more about user behavior. People that have a smartphone know when they are connected to WiFi network and they know when they are connected to LTE, it’s a choice and this statistic will remain at 80% no matter how many devices ship with LTE modems in them.” He may be right.

His next point is that wherever they travel, smartphones (in the US) are in reach of a WiFi network 70% of the time – now that can be increased as WiFi gets deployed further and especially if all US home gateways are slowly turned into Homespots, as we believe over the next five years.

Finally he says that there are 6.3 million hotspots in action today and that by 2017 some 80% of all mobile data will go through WiFi. What he doesn’t point out is that this is because Homespots are emerging with second SSIDs attached to about half of the 600 million plus home gateways out there, and that this will suddenly switch on, between now and 2017 an avalanche of WiFi capacity. This will make WiFi even more ubiquitous. People talk about Hotspots being planned and having higher capacity than the haphazard placement of home gateways. The suggestion is that 20 Homespots does the job of one hotspot.

Even so, turning on some 300 million Homespots would be like adding 15 million hotspots in the suburbs of every country in the world, that’s a 250% overnight increase over the hotspot capacity we have today.

We do not disagree with any of Cadwgan’s points, and they are, for the most part what we have discussed on these pages, but it is worth pointing out that while video will become more and more of the total data that a smartphone uses, until it reaches over 80%, its owner is not spending 80% of their phone using time watching video. Video is so heavy as a data format, that a 5% increase in watching video will be a 50% increase in data used, and a massive resultant rise in the amount of data used for video.

Just take the amount of video that is used on a phone today and replace it all with 4K streams and you see that the almost 80% becomes well over 90% and most of it could not be carried, and we know that’s going to happen. But a lot of the time on the phone will still be spent loading pics to Instagram, and engaging on Facebook and tweeting, as well as talking to people.

“We are seeing a change in the attitude towards WiFi from all operators. In the past there was a feeling that WiFi and the entire network must be owned and controlled by one operator, the same one that offered a service like a video service. There has been a journey of acceptance and discovery by cellcos that fixed line attached WiFi is okay to use.” Well, have they truly accepted that? Not according to their public statements.

But much of what Cadwgan wants to tell us about is the process by which Alcatel is able to ease this journey of acceptance. Creating a VPN tunnel from a remote WiFi access point back to its where it authenticates its credentials, rather than simply giving out Access Point passwords all over the network. This gives the kind of re-assurance that cellcos right now demand.

“There is a genuine convergence between mobile and fixed operators. They are now just operators and we have found that the fixed side of a converged operator is usually the one that has been quietly installing WiFi. Mobile Network operators still want to deploy WiFi themselves too, and they are, but can you imagine the CEO of Verizon saying in public that the spectrum that it paid so much for is not the solution to future connectivity problems? The shareholders would have a field day with them. No, and that’s why carrier WiFi which is owned by cellcos is being installed rapidly but very secretly.”

“MNOs think that trusted WiFi is better (everything behind their encryption wall) but they are realizing that the real job right now is to capture the footprint, and if that means using untrusted WiFi then so-be-it.”

He has a slide which suggests that WiFi 3.0 is mobile ubiquity, where WiFi is an available option from virtually everywhere. But it needs the addition of ANDSF to manage policy and 802.11i for authentication (which defines how keys are held and derived for encrypting content) and the SIM held version of Extensible Authentication Protocol (EAP-SIM) for session key distribution. There is also a requirement to facilitate roaming and also for layer 2 communication in tunneling.

But surely companies like Comcast don’t want to invest in such a complex security and authentication environment? “It is true we are merging internet authentication with cellular authentication, but you have to remember that many of these fixed line operators have a basic subscription data management issue anyway. They welcome this type of approach. Mergers have left them in just as bad shape as cellular networks in that they are running multiple subscriber databases and they want the merged and managed.”

“This is a battleground to become nomadic, not purely cellular,” says Cadwgan, and predicts a ton of new WiFi First services which fall back to cellular only for voice. It’s interesting that many networks are also supporting WiFi Voice as well.

Cadwgan claims the lead for Alcatel at two points in the network, what the 3GPP calls Trusted Wireless Access Gateway (TWAG), which talks to authentication servers directly on behalf of trusted WiFi networks, which Alcatel sells as its Alcatel-Lucent 7750 SR WLAN Gateway and the Trusted Wireless Access Proxy which handles Radius and Diameter calls using IP-SEC tunneling to untrusted parts of the WiFi network.

“We have a two year lead on the TWAG and Cisco and Ericsson will talk about these, but cannot deliver them today.”

“Listen this stuff is advanced. We can take a handset’s cellular authentication and find its internet credentials and vice-versa, even if the device has not got the right credentials. Also we can verify a tablet even though it has no SIM card. We can make the policy control really dynamic and changes things at different times of day or for different apps. We can set whatever policy any operator wants, it can be never go over cellular or always go over cellular, and everything in between.”

Cadwgan says, “We are working for one major MSO in the US, and one of the leading MNOs there. (So we would guess Comcast and AT&T) and operators in China and in the Netherlands (both KPN and Ziggo). We have 50 plus networks and this architecture was only launched in 2012.”

And when we ask if MNOs still think they can secretly add WiFi and then charge for it just as if it is cellular, he says, “It’s too late for cellular operators to start charging for WiFi, the consumer behavior tells them that customers just won’t accept it, they would move to another operator. None of our customers are thinking like that I promise you.”

The impression we get is that Alcatel will not be finished this build out in the US until mid-2015 and that if the MSO is Comcast, it would be crazy to launch a major WiFi First service until it is ready. We know that Comcast will have in excess of 8 million Homespots, or as it prefers to call them Community Hotspots, to go with the rapid build out of real Hotspots of its own and those of the Cable WiFi Alliance including the other MSOs, who are sharing their Hotspots, which amounts to 250,000 hotspots today, a number rising rapidly.

So expect Comcast to reveal a robust WiFi network in mid-2015, with accurate usage reporting and seamless authentication, all of which could hit the US MNOs in record time, so also expect a counter offensive from them before the end of 2015.