The Proliferation of Connected Devices and the Need for Offloading

Last week, Google launched its own, unlocked 'superphone', the Nexus One. Apart from a possible reference to the movie 'Blade Runner', the name 'Nexus' may also refer to the fact that today's smart or superphones are an amalgam of mobile technology, cloud services and connectivity.

The capabilities of mobile devices are developing at a neck-breaking pace. Ever more smartphones, netbooks and e-readers are equipped with the powerful and energy efficient processors of companies like Intel and ARM. Later this month, Apple is believed to introduce the 'iSlate', a so-called tablet computer . Tablets are apparantly the new form factor for mobile computers as OLPC (One Laptop Per Child), whose activities contributed to the birth of 'netbooks', plan for a tablet version (OLPC 3.0) by 2012. Freescale recently announced a reference design for tablets based on its own technology, while during last week's Consumer Electronics Show (CES) both HP and Dell showed off tablet-like devices.

Many of the applications and content that are to be used on these tablets will reside in the 'cloud'. This helps to save on processing power and storage, which in turn benefits weight and battery life. [Spotify, Pandora] Apple's acquisition of LaLa, a music streaming service, may suggest that in the near future Apple users no longer have to sync their music library between numerous computers, iPhones and/or iSlates, but can access their library where ever they are and whatever device they work with or carry with them. Even Hollywood seems to consider streaming the way forward: except for Disney, who has its own technology, all major studios are working together in DECE to come up with a standard for online distribution of movies.

The proliferation of connected mobile devices and their use of cloud and/or streaming services will result in very strong growth in mobile data. Cisco forecasts that global mobile data traffic will increase 66 times between 2008 and 2013, which compares to a CAGR of 131 percent. Such growth is likely to put mobile carriers' networks to the test, as is illustrated by the problems that AT&T is having in New York City and T-Mobile Netherlands in the Amsterdam Arena and Amsterdam Central Station.

It is for this reason that mobile carriers should consider ways to offload mobile data traffic from their core network, for example through auto-roaming onto private and public WiFi networks. This way, the core network is reserved for voice traffic and subscribers who are not within WiFi coverage. Subscribers benefit as they experience faster mobile data connections, while carriers can reduce their investment in additional network capacity (primarily RAN, although backhaul connections may also need to be upgraded).

Offloading provides operator-owned WiFi networks (Netherlands: KPN, T-Mobile) with a new lease on life. Carriers that do not yet have a network of WiFi hotspots should partner with one or more hotspot providers. For example, O2 is partnering with BT Fon, which has over 500.000 hotspots in the UK and 700.000 worldwide. Such a partnership is far cheaper than having to invest in additional RAN and backhaul capacity and given that most operators nowadays rely on flat fee data bundles, no revenue is lost through offloading mobile data traffic.