Monday, September 14, 2015

Will 5G Reduce Wi-Fi Offloading? Probably Not

There are many ways to quantify the importance of Wi-Fi access. One is the sheer volume of traffic carried over mobile, fixed and Wi-Fi access networks (Wi-Fi is fixed access). It has been clear for years that Wi-Fi importance is growing.

By 2016, more than half of all traffic from mobile-connected devices (almost 14 exabytes) will be offloaded to the fixed network by means of Wi-Fi devices and femtocells each month, according to Cisco.

By 2019, 54 percent of mobile data access will happen using Wi-Fi.
Source: Cisco VNI Mobile, 2015

Some have speculated that Wi-Fi offload will be less relevant after 4G networks or 5G networks are in place. After all, if every device has access to as much as 1 Gbps to 10 Gbps data rates, why offload? Retail bandwidth costs are one compelling reason.

As most users understand, the cost of consuming data on a mobile device is much higher than when using a fixed network.

Retail mobile Internet access costs vary, but might represent retail end user charges of between $7 per gigabyte and $15 per gigabyte.

The per-gigabyte cost of a fixed network connection is more statistical, and depends on how much data a given account consumes in a single billing period.

But fixed network costs in U.S. markets can be as low as a dollar a gigabyte or even less.

In other words, mobile data can cost seven to 15 times as much as a similar amount of fixed network access. Using Wi-Fi, on the other hand, can represent nearly zero cost for a user.

If video entertainment goes "mobile" to any significant degree, video bandwidth is going to be an issue, since no mobile operator likely can sell bandwidth at $1 a gigabyte or less. The obvious solution is to encourage or even require consumption only on Wi-Fi connections.

So far, Wi-Fi offload is higher on 4G networks than on lower-speed networks.

The amount of traffic offloaded from 4G was 44 percent at the end of 2014, and it will be 57 percent by 2019 (Figure 19). The amount of traffic offloaded from 3G will be 49 percent by 2019, and the amount of traffic offloaded from 2G will be 46 percent.

                                      Mobile Data Traffic and Offload Traffic, 2019
Source: Cisco VNI Mobile, 2015

There also are ways to illustrate the importance of the 5 GHz band for Wi-Fi access, such as the explosive growth of 5-GHz access for smartphones, the premier Internet access device globally.

The point is that Wi-Fi access now is a fundamental building block for all smartphone business models.

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