How one mobile operator is tackling the data deluge with help from customers' Wi-Fi

How one mobile operator is tackling the data deluge with help from customers' Wi-Fi

Summary: A recent deal between Germany's biggest telco and a community hotspot provider shows one way carriers are tackling the growing tide of mobile data using Wi-Fi offloading.

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Deutsche Telekom (Bonn HQ pictured above) is planning to add 2.5 million hotspots by 2016 (Image: Deutsche Telekom)

This summer, Germany is getting its largest Wi-Fi network following a deal last month between the country's incumbent telco, Deutsche Telekom, and crowdsourced Wi-Fi hotspot provider FON.

The deal will allow Deutsche Telekom to extend its Wi-Fi network across Germany from June 2013 and also covers the operator's network operations in Bulgaria, Greece, Romania, Slovakia and Hungary.

For FON, the deal is something of a coup: Deutsche Telekom is a "gold-plated reference customer" for the community Wi-Fi company, according to Emma Mohr-McClune, global service director for consumer services at Current Analysis, who notes that this is also FON's first multi-market deal.

For Deutsche Telekom, the deal means it will become part of a global network of Wi-Fi hotspots created by users who have signed up to share their home broadband services, giving away a section of their bandwidth to other FON users in need of a connection.

The importance of Wi-Fi

However, what's most notable about the deal is that it sees Deutsche Telekom putting its foot firmly in the Wi-Fi offload camp, and marks a further signal of Wi-Fi's growing importance to operators who seek alternative ways of managing rampant mobile data traffic.

"The astonishing increase in data traffic calls for network optimisation and expansion, as well as the implementation of new high-speed networks," said Deutsche Telekom spokesman Dirk Wende, citing comments made by outgoing Deutsche Telekom CEO Rene Obermann. "The partnership with FON fits perfectly with Telekom's network expansion strategy. Wi-Fi and hotspots can be used to divert heavy data traffic to fixed-line networks and thus reduce the load on mobile networks."

Deutsche Telekom sees Wi-Fi as complementary to its existing services, and certainly has no plans to blanket Germany (a geographically large country) with its own Wi-Fi hotspots.

As it builds up its Wi-Fi offering, the operator is continuing with its LTE rollout across Germany, aiming for 85 percent population coverage by the end of 2016. Wende said Deutsche Telekom doubled the number of its LTE sites by the end of 2012 compared to 2011, and has deployed LTE services in 1800MHz spectrum in more than 100 cities.

"With Wi-Fi To Go we want to extend our Wi-Fi network; a wide area coverage with Wi-Fi like we have with mobile is not the intention," said Wende. "Wi-Fi is a complement to mobile and fixed lines. In our mind we want our customers to be always best connected — it doesn't depend on the technology."

Deutsche Telekom is launching the Wi-Fi To Go service based on the FON partnership, and said by 2016 it wants to set up more than 2.5 million additional hotspots in Germany through the offering. As part of the FON deal, Deutsche Telekom customers now have access to some eight million hotspots worldwide, with Deutsche Telekom adding 12,000 hotspots to the FON pot.

The carrot for customers

Persuading customers to jump on the FON bandwagon and open up their Wi-Fi networks to others could be one of Deutsche Telekom's biggest challenges: German consumers tend to be cautious in their approach to new technology, and the onus is on Deutsche Telekom customers to opt in to share their home broadband access.

Wende said Deutsche Telekom will address this by "emphasising the benefits for our customers: no disadvantages and no risks but free Wi-Fi on millions of hotspots worldwide".

Telekom will also be able to use FON's international aspect as a value-add for its customers, Mohr- McClune said. "Deutsche Telekom can bundle 'free global Wi-Fi' to customers in Germany, Bulgaria, Greece, Romania, Slovakia and Hungary as a USP," she wrote in a research note.

However, there are of course some competitive challenges ahead: Mohr-McClune also noted that the new router will only be applicable to customers of IP-based broadband products (not standard DSL), and said the "whole deal throws a question mark over the future of the Deutsche Telekom-Orange alliance for international Wi-Fi, as announced two years ago at MWC."

Also not to be ignored is the potential impact on voice and text revenue, and also possibly on mobile data roaming revenue, with the increased use of FON hotspots at home and abroad.

Mobile data offloading

Such elements are doubtless a bonus for Deutsche Telekom, but it's the issue of offloading mobile data that's really key here.

Rising data traffic is a problem operators around the globe are wrestling with due to the increased use of smartphones, tablets and other wireless devices. Deutsche Telekom’s collaboration with FON serves as a good illustration of the various approaches operators are now taking to help relieve the burden on their 3G and LTE mobile networks, while keeping costs down.

There is also growing talk about the so-called heterogeneous network, or HetNet, which essentially provides a hybrid network of macro cells and small cells. Many operators are considering small cells such as metro cells as lower-cost alternatives to improve coverage and capacity, and WiFi offloading is a similarly hot topic.

The choices that operators have to make are far from easy, and will be to a large extent dictated by their existing network and spectrum assets. For its part, Deutsche Telekom is pursuing a strategy of mobile, fixed and WiFi, a technology mix it hopes will enable it to "gradually introduce our customers to the benefits of internet access anywhere and anytime".

Topics: Networking, Broadband, Mobility, EU, Wi-Fi

Anne Morris

About Anne Morris

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of CommunicationsWeek International as copy editor. Over the years she held the editor position at both Total Telecom Online and Total Telecom Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies, with a particular focus on mobile communications. In her spare time she translates business texts from German into English.

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3 comments
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  • WiFi is uncommon in Germany . . .

    Here in the USA, virtually every Starbucks, college campus, and a wide variety of restaurants offer WiFi.

    During my stay in Germany, it was quite the opposite. WiFi was rare, and even when it was available it was locked up behind a password (they are required to do so by law).

    I found it virtually impossible to find WiFi in Germany :/. I dunno how much it will really help.

    And after a bit of a fiasco with unlocking my phone (it's still locked to them - I can't use it in the USA), if I ever go back I'm going prepaid via something like O2. There's no way I'm going back to Telekom again.
    CobraA1
    • Yep

      if you have an open network, here on Germany, you are responsible for what takes place over your network, unless you log each device that attaches to it and what the device did.

      That means simply having a Wi-Fi spot without a password can have the police knocking at the door, because somebody shared music over your connection or downloaded kiddie pr0n.
      wright_is
  • The one question they haven't answered...

    I've seen this thing about opening a part of your network's bandwidth to the public, and all of the praise it has been getting. People have been whole-heartedly supporting it, but there is one question I never get the answer two - what happens if child pornography is downloaded over your network - or, a virus is sent out over your network by a stranger, and the police tracks it back to your network? I would love to open up a part of my WiFi network - but not until this is resolved.
    trainman261-2