DATA OFFLOAD APPROACHES FOR MOBILE OPERATORS Improving Network Efficiency And Strengthening Quality Of Service

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1 DATA OFFLOAD APPROACHES FOR MOBILE OPATORS Improving Network Efficiency And Strengthening Quality Of Service Devaraj Srinivasan Jayanta Dey Santhosh Kumar M Romendra Nath Mukherjee

2 Table of contents 1. Data Traffic Challenges And The Need For Data Traffic Offload Data Traffic Offload Options Comparison Of Data Offload Solutions Recommendations To Manage Mobile Data Offload Conclusion 12

3 The popularity of video, social media and Internet gaming across a range of new devices such as smartphones and tablets has created a surge of network data traffic. Device to device connectivity commonly referred to as M2M will give rise to a new universe of applications that will further stress network capacity. In the next three years alone, data traffic is expected to grow tenfold creating a tremendous capacity crunch for 1 operators. While data revenues are expected to only double during this period creating a huge monetization gap. Therefore, telecom operators need to constantly review their data traffic patterns and implement traffic offloading mechanisms that can help them manage their network load and capacity more efficiently. In addition, the rise of OTT players who are capturing a growing share of the value of the data that flows over the network, combined with declining Telco margins, stipulates that all this should be done in a more cost efficient manner. This paper describes various data offload strategies and considers the challenges and benefits associated with each of them. Data traffic challenges and the need for data traffic offload Due to the rapid growth of smartphones and tablets, data traffic on the networks is on the rise and mobile connections are expected to reach the billion mark by 2015 surpassing the global population. The popularity of data guzzling applications, social networking, video and online gaming will further drive data consumption creating tremendous strain on the networks. Next-generation network deployments promise to deliver higher bandwidth and speed but they also introduce new challenges for service providers such as a high cost of deployment and operations. The cost of delivering data continues to rise more rapidly than revenues, and is expected to grow seven fold from $53 billion in 2010 to reach $370 billion 3 (USD) by Some of the levers that operators have at their disposal to better manage their networks include: However, their incremental revenues are not commensurate with the increase in data traffic. Hence, operators need to focus on core and access network investments only in those areas that offer the strongest potential returns. ŸBackhaul Network Optimization. The increase in data traffic is not only causing strain to the operator radio access networks, it is also creating backhaul bottlenecks. As the traffic from wireless devices continues to increase, operators also need to design and implement an efficient backhaul system to transport the data from the access to the core network. ŸTransactional Load Management. With increasing number of devices, it is important for operators to keep the signaling and transactional load to a minimum, so that bandwidth is optimized. ŸRadio Spectrum Utilization. Spectrum for operators is both limited as well as expensive. As the number of connected devices continues to increase, operators need to plan the effective utilization of their radio resources by offloading data between licensed and unlicensed spectrum. ŸControlling CAPEX. To meet the growing data needs of consumers operators are already investing heavily in upgrading their networks. In addition, data traffic patterns depend upon the type of device, its form factor, time of the day, type of application and even the density of users in a particular location. For devices, the largest data consumption spread is for 3G routers, falling in the range of 1-16 GB per month. Even for PCs, the variation is large, in the 1-7 GB per month range, followed by tablets at MB per month and mobile phones at MB per month, 4 while M2M average volume traffic is below 10 MB per subscription. All these factors combined with the increasing device diversity makes network 03

4 capacity planning and load management even more complex. In order to optimize the usage of the network elements and the traffic flow, mobile data offload solutions that can enable the optimum utilization of network resources are required. Data traffic offload can help operators reduce the traffic on their radio spectrum lowering the operating load on base stations. It also provides an opportunity for service providers to charge users for offload solutions such as small cells, while helping customers reduce their usage costs by offloading data to alternate networks. According to ABI Research, in 2010, about 16% of mobile data was diverted from mobile networks; this is expected to grow to 48% by Since, data offloading can help operators avoid signal choking and revenue loss, it is emerging as one of the best options to manage network capacity and load. Data traffic offload options There are six different options to offload data from the mobile network at either the access or the core network level. Each of these options can co-exist and the operator will have to determine the best option based on multiple factors such as current infrastructure, customer usage patterns, associated costs, deployment and maintenance complexities and user density in a particular location. Figure 1 explains the six different approaches that extend across the unified network access ring and core. Different access network elements are connected to the access gateway which gets aggregated through an aggregation box to a unified transport ring. Different core network elements are connected to the IP MPLS or optical ring through edge routers. A robust data offload solution can provide telecom operators with the flexibility to control data flow across the network based on traffic patterns, class of service and type of customers enabling a better quality of service. In addition, users can also have the flexibility to control the data traffic that they wish to offload based on the type of applications, their location or service type, helping them manage their data allowances better. In the subsequent sections, we will discuss various data offload solutions. The six different mobile data offload options are 1. Wi-Fi Hotspot 2. LTE Small Cells / Relay nodes 3. Integrated / Wi-Fi 4. Direct Tunnel 5. Internet offload (IOGW) 6. M2M WLAN Controller Access Network GSM BTS 3G Node B LTE enodeb 4G LTE EPC MME / SGW/ PGW Smart Devices, Tablets, Phones Wi-Fi Hotspot LTE Small Cells / Relay Node Access Network Fiber Ethernet Microwave Transport Aggregation box IP MPLS, Ethernet, Optical PCU MSC GSM Base Station Controller AAA Radius Server Packet Data Intergrated WiFi M2M Transport BRAS / BS SGSN IOGW 3G Radio Network Controller M2M Devices Internet GGSN - Access - Edge Router Figure 1: Mobile Data Offload Options, Source: Wipro Technologies 04

5 The following sections will explain each of the options in detail. Wi-Fi Hotspot Figure 2 depicts the data flow in a Wi-Fi hotspot solution. Data offloading can be initiated in two ways. First, it can be accomplished by the operator based on the type of data flow. Secondly, it can be initiated by the user to reduce subscriber utilization charges. Wi-Fi is a low cost, easy to install solution that can help operators manage data traffic growth at reduced costs. The demand for Wi-Fi technology in mobile networks will continue to grow over the coming years as Tier-1 Telecom vendors upgrade their Wi-Fi portfolio. The key advantage of Wi-Fi hotspot is that they operate over unlicensed spectrum. In addition, building Wi-Fi hotspot is easier and cost effective than large network deployments and upgrades. However, as the coverage of a Wi-Fi hotspot is limited, its effectiveness depends upon the duration for which the user remains in the coverage area. The longer a user stays in Wi-Fi coverage area greater the benefits are of data offload. The number of Wi-Fi hotspots is increasing across the world and many enterprises are setting up their own. In addition, a number of operators have already rolled out Wi-Fi hotspot solutions. For instance AT&T has forged partnerships with public and private entities to offer Wi-Fi services across thousands of locations. WLAN Controller Access Network GSM BTS 3G Node B LTE enodeb 4G LTE EPC MME / SGW/ PGW Smart Devices, Tablets, Phones 1 Wi-Fi Hotspot LTE Small Cells / Relay Node Access Network Fiber Ethernet Microwave Transport Aggregation box IP MPLS, Ethernet, Optical PCU MSC GSM Base Station Controller AAA Radius Server Packet Data Intergrated WiFi M2M Transport BRAS / BS SGSN IOGW 3G Radio Network Controller M2M Devices Internet GGSN - Access - Edge Router Figure 2: Mobile Data Offload Using Wi-Fi Hotspot 05

6 LTE Small Cell and Relay Nodes Underlay Network The concept of small cells is similar to Wi-Fi, the only difference is that these connect to the radio network and provide higher coverage. This works both on licensed as well as unlicensed spectrum by offloading data traffic from the core network and saving radio spectrum. These low powered radio nodes are very useful to offload data in high density and high traffic areas. Since this solution is deployed and managed by the operator it fits well with long-term strategy of mobile operators. But it has its own challenges in terms of installation complexities which can adversely impact capital and operating expenditures. An advantage of LTE small cells is that they can be easily deployed with low skilled workers. But they are in the early stages and not yet ready for mass deployment. In Figure 3 gives a view of data flow in a LTE small cell / relay node deployment. Wi-Fi hotspots and LTE small cells will co-exist to address selective offload of data from various devices. WLAN Controller Access Network GSM BTS 3G Node B LTE enodeb 4G LTE EPC MME / SGW/ PGW Smart Devices, Tablets, Phones Wi-Fi Hotspot 2 LTE Small Cells / Relay Node Access Network Fiber Ethernet Microwave Transport Aggregation box IP MPLS, Ethernet, Optical PCU MSC GSM Base Station Controller AAA Radius Server Packet Data Intergrated WiFi M2M Transport BRAS / BS SGSN IOGW 3G Radio Network Controller M2M Devices Internet GGSN - Access - Edge Router Figure 3: Mobile Data Offload Using LTE Small Cells and Relay Nodes 06

7 Integrated and Wi-Fi Integrated and Wi-Fi will be a solution which will be deployed indoor in a residential or enterprise environment and outdoor in a metro environment. This is a hybrid solution that utilizes both small cell and Wi-Fi hotspot concepts for data offloading. Access points in a residential or enterprise environment will be managed by consumer or enterprise, while the WLAN access manager and gateway will be managed either by the Internet service provider or a mobile operator. Figure 4 gives an overview of the Integrated and Wi-Fi solution. Due to its distinct advantages over other solutions, it is expected that this solution this will become the long term data offload option for the operators. WLAN Controller Access Network GSM BTS 3G Node B LTE enodeb 4G LTE EPC MME / SGW/ PGW Smart Devices, Tablets, Phones Wi-Fi Hotspot LTE Small Cells / Relay Node Access Network Fiber Ethernet Microwave Transport Aggregation box IP MPLS, Ethernet, Optical PCU MSC GSM Base Station Controller AAA Radius Server Packet Data 3 Intergrated WiFi M2M Transport BRAS / BS SGSN IOGW 3G Radio Network Controller M2M Devices Internet GGSN - Access - Edge Router Figure 4: Mobile Data Offload Using Integrated and Wi-Fi 07

8 Direct Tunneling In the direct tunneling method, data flow in a 3G network flows from the base station to the radio network controller (RNC), GGSN and then directly to the Internet avoiding the SGSN network element. This implies that service providers utilizing this offloading solution would require much lesser SGSN nodes, which would result in reduced capital and operating expenses. Figure 5 below explains explains the data flow in the direct tunneling approach. WLAN Controller Access Network GSM BTS 3G Node B LTE enodeb 4G LTE EPC MME / SGW/ PGW Smart Devices, Tablets, Phones Wi-Fi Hotspot LTE Small Cells / Relay Node Access Network Fiber Ethernet Microwave Transport Aggregation box IP MPLS, Ethernet, Optical PCU MSC GSM Base Station Controller AAA Radius Server Packet Data Intergrated WiFi M2M Transport BRAS / BS SGSN IOGW 3G Radio Network Controller M2M Devices Internet GGSN 4 Direct Tunnel - Access - Edge Router Figure 5: Mobile Data Offload Using Direct Tunneling 08

9 Internet Offload This solution provides the option to selectively offload data traffic between the Radio Network Controller in a 3G network and the SGSN. Revenue generating applications can be taken through the core network SGSN and GGSN while non-revenue generating applications such as free videos and web browsing are offloaded from the RNC to the Internet directly. By implementing this solution in the network, the operator would not require to upgrade SGSN/GGSN to support the increased data growth. Both SGSN and GGSN are offloaded in this solution but the challenge of restricted radio spectrum continues, since the solution is implemented in the core network. Figure 6 Mobile Data Offload Using Internet Offload gives the view of data flow in the Internet Offload solution WLAN Controller Access Network GSM BTS 3G Node B LTE enodeb 4G LTE EPC MME / SGW/ PGW Smart Devices, Tablets, Phones Wi-Fi Hotspot LTE Small Cells / Relay Node Access Network Fiber Ethernet Microwave Transport Aggregation box IP MPLS, Ethernet, Optical PCU MSC GSM Base Station Controller AAA Radius Server Packet Data Intergrated WiFi M2M Transport BRAS / BS SGSN 5 IOGW 3G Radio Network Controller M2M Devices Internet GGSN - Access - Edge Router Figure 6: Mobile Data Offload Using Internet Offload (IOGW) 09

10 M2M With M2M devices gaining momentum, operators should start looking at offloading the data content from these devices through a dedicated M2M gateway to reduce the strain on their core networks and improve operational efficiency. In this solution, M2M devices get connected to the unified access network ring either through macro, small cell or W-Fi wireless networks or through a wired access M2M gateway. Figure 7 explains the data flow from M2M devices to the internet. The M2M gateway connects the M2M devices and the operator s wireless and wireline networks. The M2M gateway also provides localized value added services and acts as a proxy for device management. The converged M2M gateway reduces the signaling load on the core network and helps manage mobility and session control. M2M traffic routing capabilities can be built into a service delivery platform providing intelligent offload decisions based on the traffic patterns. M2M networks will overlay with the existing 3G/LTE network and enable operators to selectively offload the data from different devices. WLAN Controller Access Network GSM BTS 3G Node B LTE enodeb 4G LTE EPC MME / SGW/ PGW Smart Devices, Tablets, Phones Wi-Fi Hotspot LTE Small Cells / Relay Node Access Network Fiber Ethernet Microwave Transport Aggregation box IP MPLS, Ethernet, Optical PCU MSC GSM Base Station Controller AAA Radius Server Packet Data Intergrated WiFi 6 M2M Transport BRAS / BS SGSN IOGW 3G Radio Network Controller M2M Devices Internet GGSN - Access - Edge Router Figure 7: Mobile Data Offload using M2M 10

11 Comparison of data offload solutions Operators can chose and deploy one or more of the data offload options based on the data traffic growth, subscriber base and the time frame of deployment. Figure 8 provides an overview of the advantages and challenges in each of the data offload options. DATA OFFLOAD OPTIONS ADVANTES CHALLENGES OPATOR BENEFITS WiFi Hotspot w Usage of unlicensed spectrum w Marketing tool to promote additional business w Limited coverage, interference management and coverage w Security challenges w Selective data offloads w Lower setup amd Maintenance costs w Low Power consumption LTE Small cells and Relay Nodes w Increases coverage and capacity w Easy to install and manage w Low Power consumption w Spectrum scarcity to support many devices w Interference migration w Security w Lower Integration costs w Lower setup and Maintenance costs w Faster deployment w Integration challenges Integrated and WiFi w One box for both WiFi and w Increases coverage and capacity w Lower cost of deployment and maintenance w Spectrum scarcity w Interference Management w Security w Lower Opex and Capex w Lower power consumption w Easy to install and manage w Improved Service Performance Direct Tunneling w Flat architecture. Direct access to the core network from core network w No additional management system w Only SGSN is offloaded. GCSN still carries the traffic w Spectrum scarcity to support many devices w No additional capex and network devices Internet offload w Operator can control selective data to offload w Need fewer core network to support data growth w Addition on new boxes & management software w Integration costs to support LI and Charging w Lower Capex and Opex w Selective offload of data w Spectrum scarcity to support many devices M2M w Easy to setup w Leverages existing access network system w Gets connected either on WiFi Macro network w Reduces interferences w Management of multiple devices on the network w Security features across devices w Overlay of M2M network reduces signaling load, efficient management of data exchanges w Bandwidth and traffic management w Reduced cost of operation and capex Figure 8: A comparative analysis of the various data offload options, Source: Wipro Technologies 11

12 Recommendations to manage mobile data offload Service providers can select any option or a combination of options to offload data and reduce the strain on access networks depending upon the specific challenges in radio access, backhaul and core network. Availability of spectrum, capacity and in-building coverage are the typical challenges faced by the operators that offloading solutions can help address. However, appropriate offloading strategies would depend upon operators priorities, expansion plans and many other factors. Some solutions that operators can evaluate include: ŸShort Term Solution. Deployment of Wi-Fi hotspots as they are commercially available, cost effective and easy to manage. However, as it is not a carrier grade solution and has limited coverage, it can only be utilized as a supplementary solution. ŸMedium Term solution. Deployment of LTE small cells as a carrier grade option in the licensed spectrum. A well-planned small cell deployment can prove effective in managing data growth, providing a long-term data offloading solution. ŸPotential Long-Term Solution. Deployment of an integrated, hybrid /Wi-Fi solution will utilize both licensed and unlicensed spectrum to address the capacity issues. However, it is still in the development stage. Operators can explore this as a potential solution for the future. Conclusion It is quite evident that service providers are struggling to manage the data traffic explosion. There are already many commercially available offloading options such as Wi-Fi offload, Internet offload gateway and direct tunneling that can help address the immediate needs of the operators. However, data traffic is expected to continue to grow and to manage this growth efficiently, it is extremely important that operators start evaluating their capacity and networking requirements now. Operators should also start planning for network upgrades, and develop a roadmap for deployment and roll-out of LTE small cells / relay nodes and integrated Wi-Fi solutions to address their medium to long-term needs. As the number of M2M devices is expected to skyrocket in the coming years, it would be ideal for operators to also plan for M2M gateway, an overlay network to offload the data traffic. Service providers must also note that different types of offload solutions will continue to co-exist, therefore they need to carefully evaluate each of these options, or a combination of these based on their requirements, customer demographics and business objectives. A successful offload strategy will not only help operators minimize capital and operating expenditures, but also heighten quality of service while improving customer experience. In addition to the above mentioned data offload strategies; operators must also look at alternative efficiency measures to improve their network performance and management of data traffic. For instance, introducing data analytic engines in the core network and building intelligence for local break out of data traffic will help ease data traffic flows within the cities and improve efficient routing. Migrating to an intelligent core network with deep packet inspection and packet routing capabilities will help understand customer behavior, enable differentiated services and help improve customer experience. While, introduction of multicast system- overlaying with existing 3G/4G systems will help manage the data traffic efficiently. Apart from the technical offload solutions implementation, it is also very critical from a data monetization perspective to introduce class of service, pay per use models, manage connection speed and download capacity based on the application type and subscription fee. 12

13 Glossary OTT: Over The Top M2M: Machine To Machine GGSN: GPRS Support Node SGSN: Serving GPRS Support Node IOGW: Internet offload RNC: Radio Network Controller 3G: 3rd Generation LTE: Long Term Evolution/ 4GLTE CAPEX: Capital Expenditure OPEX: Operating Expenditure References / Citations 1. Ericsson report 2. computerweekly.com/news/ /smartphones-and-tablets-drive-mobile-data-traffic-up-23-says-gartner

14 About the author Devaraj Srinivasan is the General Manager & Head of Telecom Technology & Strategy in Wipro's Global Media and Telecom business unit. Dev has been working in the IT & Telecom Industry for more than 24 years. Dev has performed various technology and business roles in Wipro's Telecom Engineering group and has worked with leading telecom equipment vendors across the world. His areas of interest are broadband wireless technologies, service management and wireless backhaul solutions. Jayanta Dey is currently Vice President for Wipro's telecom equipment vendor business unit where he heads the Consulting, Solutions and Practice unit. Jayanta has over 23 years of experience in the telecommunication industry. He is involved in providing advisory services to various telecom clients on their product strategy and roadmap, process optimization, strategy for service roll out and on innovative out-sourcing/partnerships models. Jayanta holds a BE (Hons) Electronics Engineering from BITS Pilani and a MBA from North Eastern University Boston. Santhosh Kumar M is as a Technology Consultant in Wipro's Global Media and Telecom business unit. In this role he is responsible for re-badging deals and Telecom partner engagement programs. He has over 13 years of experience in IT & Product Engineering domain in various technical & business roles, across service providers & telecom equipment vendors. Romendra Nath Mukherjee is currently working as a business analyst in Wipro's Global Media and Telecom business unit. In this role he is responsible for analyzing Telecom technology and strategy. Prior to this he was working as a client relationship representative, front-ending sales in Utility domain for Wipro Infotech. Winning in a Digital World Wipro's comprehensive suite of converged services addresses the entire Digital value chain which includes Content Providers, Independent Software Vendors, Network Equipment Vendors, Communication Service Providers, Media, Entertainment & OTT players as well as Device Vendors. Our vertically aligned business model allows us to understand customer business imperatives and technology service lines give us the unique ability to architect integrated technology solutions partnering with organizations to Do Business Better and win in a Digital World. About Wipro Council for Industry Research The Wipro Council for Industry Research, comprised of domain and technology experts from the organization, aims to address the needs of customers by specifically looking at innovative strategies that will help them gain competitive advantage in the market. The Council, in collaboration with leading academic institutions and industry bodies, studies market trends to equip organizations with insights that facilitate their IT and business strategies. For more information please visit About Wipro Technologies Wipro Technologies, the global IT business of Wipro Limited (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company, that delivers solutions to enable its clients do business better. Wipro Technologies delivers winning business outcomes through its deep industry experience and a 360 degree view of Business through Technology helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner s approach to delivering innovation and an organization wide commitment to sustainability, Wipro Technologies has over 130,000 employees and clients across 54 countries. For more information, please visit or contact us at 14

15 DO BUSINESS BETT NYSE:WIT OV 130,000 EMPLOYEES 54 COUNTRIES CONSULTING SYSTEM INTEGRATION OUTSOURCING WIPRO TECHNOLOGIES, DODDAKANNELLI, SARJAPUR ROAD, BANGALORE , INDIA TEL: +91 (80) , FAX: +91 (80) Copyright Wipro Technologies. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without express written permission from Wipro Technologies. All other trademarks mentioned herein are the property of their respective owners. Specifications subject to change without notice.

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