I was at a Breakfast with Total Telecom event on Wednesday morning looking at traffic offloading. Very interesting it was to. However, I'm worried that we're overstating the need for offloading and we're also overestimating the potential of femto etc to deal with those non-existent needs.
We seem, as an industry (and particularly us analysts), to obsess about the total amount of wireless traffic being generated and what proportion will be offloaded on business/domestic femto or WiFi (by which I mean the backhaul is paid for by the end user). There are two fundamental problems here...
The first problem is that the total amount of traffic is not an issue. Networks are not provisioned based on the total, they're provisioned based on the peak. In the case of mobile broadband, this tends to be 10-11pm ish and seems to mostly revolve around streaming video content of a more...ahem...adult nature. Furthermore the usage also tends to be highly focused on a very few cells (the busiest 10% of cells carry 50% of traffic). It also tends to be focused on a small number of users (10% of subscribers generate 50% of traffic is about average). So actually, the issue becomes less "how do we deal with all this traffic?" it's "how do I deal with this usage spike at this time by these small number of users in these few cells?". That seems much more manageable.
The second problem, which follows on from the first, is that we assume that all this WWAN traffic is just waiting to be offloaded. Here's a shocker for people...90%+ of data traffic is already offloaded. Domestic broadband usage, which accounts for the vast majority, is predominantly WiFi. People already use WiFi/DSL to connect their laptops. We generally choose to exclude them from the analysis if they don't also have WWAN access. This is an error. What MNOs are hoping with a femto strategy is that those subscribers who have chosen to connect at home with WWAN are going to be easy to shift onto WLAN. OK, so in some cases it may be that they've connected via WWAN when WiFi/Femto was available, but a simple prioritisation algorithm on the connection manager like Vodafone's Always Best Connected can sort that out. For the most part, however, we have to assume that WWAN is a definite choice. If it were a legacy product then I might be willing to accept that there was an inertia effect and users needed nudging onto femtos. It's not though. It's new and people have adopted it because it suits their requirements. They either prefer the flexibility or the prepaid pricing or they're transient. There are millions of people like that. And they won't buy DSL, so they can't be offloaded. Live with it. Offloading strategies seem to have chosen to focus on a group of people who have opted very recently to use a mobile broadband connection at home, rather than DSL/WiFi. In so doing they've assumed that all that traffic is ready and raring to be offloaded. It isn't.
Now then...what happens when we put these two problems together? A solution. Or more accurately a set of solutions. There are a small number of subscribers who probably won't be "offloaded", concentrated in a small number of cells whose usage peaks at a particular time. You deal with that with a combination of small cells for boosting capacity in areas with very high usage (and that's fairly predictable since 90% of MBB usage is within the home postcode), traffic compression (see Onavo blogpost) and subscriber management (i.e. making sure that those fellas who are using all the bandwidth are actually paying their fair share).
I've focused here on private WiFi and consumer/domestic usage. I certainly think there's a place for public WiFi, although to be honest I don't see a wild amount of difference between that and small cells. They achieve the same objective and the end user isn't paying for the backhaul, which is one of the main benefits to the MNOs of femto/offloading. There's also definitely space for enterprise Femto. But enterprise users aren't the ones creating the so-called traffic tsunami.
I'll be dealing with all these sorts of issues in forthcoming reports. The next imminent release is Mobile Broadband Global Forecast & Analysis 2010-20, which will be available later this month. It will include detailed forecasts of 54 countries and 6 regions (including connections, traffic and revenue across datacards/USB modems, smartphones and tablets).