Emerging Carrier Wi-Fi Hotspot Opportunities White Paper

CAPITALIZING ON WI-FI HOTSPOTS Emerging Opportunities for Mobile Operators

Alepo Copyright © 2011

• Key Drivers for Mobile Operators Entering Wi-Fi Hotspots

• Defining the Wi-Fi Hotspot User

• Use Cases for Mobile Data Offload

• How Important Are Wi-Fi Bundles

• Realizing Monetized Wi-Fi Hotspot Services

• Wi-Fi Hotspot Core Components

• Achieving Convergence via Mobile Charging Core Integration

• Growing a Wi-Fi Hotspot Footprint

• Customer Case Study

What’s Inside

Wi-Fi is a mature and widespread technology, today reaching over 700 million homes, schools, enterprises and hotspot locations worldwide. As mobile data usage continues to sky rocket and as Wi-Fi-enabled mobile devices become more abundant and diverse, mobile operators are beginning to see great potential for leveraging Wi-Fi hotspots services in order to reduce congestion on cellular networks and to capitalize on new revenue channels.

Key Drivers for Mobile Operator Wi-Fi Hotspots

• Wi-Fi hotspots can provide a complementary method to delivering internet services to mobile subscribers at a relatively low cost per byte.

• In launching and managing Wi-Fi hotspots, mobile operators can gain control over their subscribers’ Wi-Fi experience, in terms of security, accessibility and consistency across multiple hotspot locations.

• Mobile operators can offer Wi-Fi as a value added service (VAS) to boost customer loyalty and ARPU, as well as generate new revenue streams by extending monetized Wi-Fi hotspot services to a wide reach of customers.

Alepo Copyright © 2011 Page | 2

Introduction

Wi-Fi hotspots resemble the “Wild West” of network access technologies, playing host to such a diverse and difficult to define group of users. One of the greatest challenges for mobile operators in developing a viable Wi-Fi Hotspot business model is understanding who their potential Wi-Fi Hotspot customers are.

Operators must consider how different users, whether an existing mobile subscriber on a smartphone or a new user on a laptop, access and interact with the Wi-Fi network. Customer intentions and expectations vary from market to market, and even location to location. Thus, mobile operators must determine the most efficient way to deliver Wi-Fi hotspot services (free or monetized) to their target customer base. In the coming pages, we’ll explore various options and common business scenarios.


Who’s at Your Hotspot?

Your Existing Subscribers Non-Subscribers

SIM Enabled SIM + EAP Enabled Wi-Fi Only Wi-Fi Only

Offload Web Portal

Unlimited

(Free or Add-On)

Counted in

Data Cap

On What Device?

How Do They Access Wi-Fi?

How Frequently? One-Time

Data Pass

Credit Card How Do They Pay?

Wi-Fi Subscription

User ID / Password

Voucher Mobile

Account Premium

SMS

Your Existing Subscribers Only

Charging Options

FINDING VALUE IN MOBILE DATA OFFLOAD

1

*In some markets, where Wi-Fi hotspot services are commonly metered (per hour / per byte), it may be viable for mobile operators to count mobile subscribers’ Wi-Fi hotspot data usage towards an overall mobile data cap. Whether the user is browsing on a 3G or Wi-Fi network, the usage accumulates towards her monthly limit. This scenario, unlike the aforementioned, requires closer integration with the mobile charging core.

Mobile data offload can be a win-win situation for mobile operators and subscribers. By offloading data (internet) traffic from a cellular network to a Wi-Fi hotspot network, mobile operators can optimize available cellular network resources, increase overall capacity and reduce bottlenecking of service. By alleviating congestion caused by heavy smartphone data usage, mobile operators can better allocate their cellular network resources to other customers.

For mobile subscribers on SIM-enabled devices (think smartphones), mobile data offload offers a convenient, effortless way to access high-speed internet across all operator-managed Wi-Fi locations. This eliminates the burden of having to switch networks, sign up or purchase services at each hotspot. A carrier-class mobile data offload solution enables subscribers to be automatically authenticated to the Wi-Fi hotspot network without intervention or interruption of service.

Mobile operators have considerable flexibility in how they position and market Wi-Fi hotspot services to existing mobile subscribers. Unlimited Wi-Fi hotspots services may be bundled with a mobile data plan or available as a monthly add-on package. Operators can offer tiered Wi-Fi hotspot services for premium locations and frequent roaming subscribers.


Mobile Data Offload a “Win-Win” Situation

Examples of Wi-Fi Plans for Mobile Subscribers

UNLIMITED WI-FI TIERED SERVICES

VOLUME LIMIT DATA PLANS

Free or Bundled Unlimited Wi-Fi Hotspot Access with All Mobile

Data Plans - Free

Premium Wi-Fi Unlimited Wi-Fi at Hotels, Airports &

Retail Zones $19.99 / mo.

Data On-the-Go Up to 2GB Data on

GSM & Wi-Fi Hotspot Networks

$29.99/ mo.

Add-On Package Unlimited Wi-Fi Hotspot Access with Any Plan

$9.99/ mo.

Wi-Fi Roaming Unlimited Global Access on Partner

Wi-Fi Networks $29.99 / mo.

On-the-Go Plus! Up to 4GB Data on

GSM & Wi-Fi Hotspot Networks

$39.99 / mo.

While a few mobile subscribers may prefer to keep Wi-Fi and mobile services separate, a recent Light Reading survey shows that over 85% of respondents consider Wi-Fi Hotspot access bundled with a smartphone to be a factor in choosing a mobile operator.

0

5

10

15

20

25

30

35

Not Important, lprefer Wi-Fi to be

separate

Marginally Important Important, but NotDecisive

Very Important, A"Must Have" Feature

In choosing your mobile provider, how important is it to have bundled Wi-Fi access with your smartphone tariff?


Source: Light Reading, 2011

Perc

ent

of

Tota

l Res

po

nse

s

Alepo’s Wi-Fi to Mobile Authentication Gateway makes it possible for mobile operators to instantly and effortlessly shift cellular data traffic to a Wi-Fi Hotspot Network.

The gateway connects the Wi-Fi network to the existing subscriber profiles in the mobile core network. By employing SIM-based EAP authentication towards the Wi-Fi network and by fetching subscriber authentication vectors from the HLR over SS7, the gateway is able to automatically authenticate subscriber devices, such as smartphones and tablets, to the Wi-Fi network, ensuring that the Wi-Fi hotspot resources are utilized to their fullest.

In addition, automatic mobile data offload requires the customer device to recognize and prioritize the operator’s Wi-Fi network SSID. This SSID should be provisioned to the device either as a factory setting or remotely (over the air) with a mobile device management system.


Realizing Automatic Mobile Data Offload Alepo Wi-Fi to Mobile Authentication Gateway

HLR / AUC IN

Mobile Subscriber (EAP Supplicant)

AAA (RADIUS)

SS7 / SIGTRAN

Alepo Wi-Fi to Mobile Authentication Gateway

(EAP Server)

Wi-Fi Access Point (EAP Authenticator)

Operator SSID Settings

Subscriber Credentials Wi-Fi Service On / Off Premium Locations Roaming Access

REALIZING WI-FI HOTSPOT MONETIZATION

2

By monetizing Wi-Fi hotspots, mobile operators can offset the costs of the Wi-Fi infrastructure. Even if the operator’s main motivation for implementing a Wi-Fi hotspot network is to increase cellular network capacity through mobile data offload, they can quickly see a return on their investment by opening the network to other paid users.

Furthermore, Wi-Fi hotspot monetization afford mobile operators an opportunity to expand their reach to new customer segments, including new and casual users, whether on SIM-enabled or Wi-Fi-only devices, roaming users, as well as their existing mobile subscribers using secondary Wi-Fi-only devices.

Key Considerations & Challenges of Mobile Operator Wi-Fi Hotspot Monetization

• How to facilitate customer adoption and encourage use of services, especially in markets where free and other paid Wi-Fi hotspots are abundant.

• How to integrate with the existing mobile core charging infrastructure in order to realize convergent services for mobile subscribers with secondary, Wi-Fi only devices.

• How to quickly and cost-efficiently expand a Wi-Fi hotspot footprint in order to justify the deployment costs and increase revenue.


Opportunities & Considerations

In monetizing Wi-Fi hotspot services, mobile operators have seemingly unlimited options to create innovative business plans and offers that resonate strongly with their target customers.

For frequent hotspot users, Wi-Fi hotspot subscriptions are a popular choice. These may be unlimited, volume or time limited. Typically, customers pay a monthly fee for access to most or all of the operator’s Wi-Fi hotspots. A real-time, flexible rating engine lends itself to more granular options, such as rates based on time or day, location, device type, etc.

One-time or casual users may prefer to pay for Wi-Fi services by the hour or by the megabyte at a single location. Customers can easily use a credit card or one-time prepaid voucher with a predefined time or volume limit to avoid having to sign up or register for services.

A hybrid option, the Wi-Fi Data Pass affords casual users more longevity than a single session without the commitment of a subscription. Wi-Fi Data Passes can offer unlimited or volume-limited service for a day, week or month, for example. Once the pass expires or the volume allotment is exhausted, the customer simply purchases another pass as he needs it. This is a popular option for roaming customers who may be traveling for a short period.


Emerging Wi-Fi Hotspot Business Models

Monetized Wi-Fi Plans

SUBSCRIPTION WI-FI SERVICES

ONE-TIME OR CASUAL USE

WI-FI DATA PASS

Unlimited Everywhere

Unlimited Wi-Fi Access at All Hotspot

Locations $39.99 / month

Single Session, Single Location Up to 2GB Wi-Fi Access at Single

Hotspot Location $6.99 / session

Wi-Fi Roaming Pass One Week

Unlimited Wi-Fi Access at All

Hotspot & Global Partners for $24.99

5GB Everywhere Wi-Fi Access Up to 5GB at All Hotspot

Locations $19.99/ month

Wi-Fi by the Hour Unlimited (volume)

Wi-Fi at Single Hotspot Location

$2.50 / hour

One Week Pass One Week

Unlimited Wi-Fi Access at All

Hotspot Locations - $14.99

Alepo’s Wi-Fi Hotspot Management Platform enables operators to effectively deploy and manage an expansive Wi-Fi hotspot business. It features:

• Intelligent Hotspot Location Controls

• Centralized Policy + Real-time Charging

• Carrier-Grade AAA Infrastructure

• Easily Customized, Branded Web Portal

• Full Partner & Reseller Management

• Real-Time Revenue Reporting Engine

• Wi-Fi Voucher Management System

The platform integrates seamlessly with an existing IN-based core network to allow for convergent services, including unified balance management, across all legacy and NGN technologies.


Alepo Wi-Fi Hotspot Management Platform

Solution In Brief

Session Interaction Access Controller

Router Session

Controller

SMSc E-Mail Server

Internet

Alepo Wi-Fi Platform

Existing Mobile Core Network / IN

Alepo Hotspot Location Server

Alepo Web Portal

Subscribers

AAA

Data Path

Fetch Location Information

Subscriber Info / Password

DHCP Requests

Send OTP Send E-mail

Send OTP

HTTPS

SNMP

Batch Balance Refill

HLR Subscriber

Data Charging

Mobile Vouchers

Wi-Fi to Mobile Auth.

GW

Policy & Charging

Business Management

(BSS)

Subscriber Data / AAA

IN to IP Charging GW

SS7 / SIGTRAN

Access Network & AP

AAA (RADIUS)

Existing Web Portal

Payment Gateways


COMPONENT OR FUNCTION DESCRIPTION DATA (INTERNET) OFFLOAD MONETIZATION

WI-FI TO MOBILE AUTHENTICATION GW

Enables automatic authentication of SIM / EAP-enabled mobile devices to Wi-Fi network.

Required X Not Required

AAA INFRASTRUCTURE

Performs authentication, authorization & accounting; Provides quota-based session management & subscriber identity management.

X Not Required, Included in Wi-Fi to Mobile Auth. GW

Required

REAL-TIME POLICY & CHARGING Handles per volume / time rating and leakage-free disconnect or redirect upon credit expiration

X Not Required Recommended

HOTSPOT SERVER (LOCATION)

Facilitates location-specific portal pages, content, charging and commissioning; Monitors APs; Assigns IP addresses at session start

X Not Required Recommended

HOTSPOT PORTAL

Provides a convenient store front to purchase & register for services, access hotspot network & free content; May be branded and integrated with existing customer website

X Not Required Required

BSS / BUSINESS MANAGEMENT May include voucher management, real-time reporting, customer care and partner / reseller management

Optional, if offload is done via partnership with WISP

Recommended

INTEGRATION TOWARDS MOBILE CHARGING CORE

Allows for convergent Wi-Fi + mobile services, unified account & balance management

Optional, if Wi-Fi data usage is counted towards an overall data limit or cap

Optional, allows subscribers to use mobile account as a payment method for Wi-Fi

INTEGRATION TOWARDS MOBILE VOUCHER SYSTEM

Extends functionality of existing prepaid mobile vouchers to purchase convergent Wi-Fi services.

X Not Required Optional, contributes to a

ubiquitous user experience

MOBILE DEVICE MANAGEMENT Remotely manages customer devices and Wi-Fi access points, including provisioning operator’s Wi-Fi SSID

Recommended Recommended

Alepo’s Wi-Fi Hotspot Server enables location mapping and identification, used to render uniquely branded reseller portals at each hotspot, including location-specific content and offers, and used to perform rating and charging based on location. This level of location-based granularity gives mobile operators an advantage over other competing free and paid hotspots.

Allowing for partners and resellers of all types and sizes, the server can consider a hotspot location to be a switch with multiple access points (hotel), a single access point or even a single CPE / MAC address. This affords operators granular control over each access point while maintaining a centralized access network / enforcement point.

The Alepo Wi-Fi Hotspot Server includes a Network Monitoring Server (NMS) to track the performance of hotspot locations and access points using SNMP-based management interfaces. It provides a dashboard to monitor the distributed network, including such information as AP uptime, throughput and more. With built-in DHCP functionality, it also maintains and assigns IP addresses at the start of each user session.


Alepo Wi-Fi Hotspot Server

The Alepo Wi-Fi Hotspot Portal works to facilitate customer adoption and encourage repeat use of Wi-Fi hotspot services by enabling a fast and intuitive registration and purchase process for all customers.

Via Alepo’s Hotspot Portal, any customer can select a Wi-Fi option (Wi-Fi data pass or subscription) and prepay for services using a credit card or prepaid voucher. With mobile core integration, operators can allow mobile subscribers accessing Wi-Fi services on secondary devices to charge Wi-Fi services to their existing mobile account, using SMS to verify account ownership.

Alepo’s open web portal can be easily customized to mimic the look and feel of the operator’s existing portal, lending itself to creating a seamless and ubiquitous customer experience across all hotspot locations, whether the customers are using mobile or Wi-Fi data services.

Left: Alepo’s Wi-Fi Hotspot Web Portal, branded and integrated with MTN Cameroon’s existing customer self care portal.


Alepo Wi-Fi Hotspot Web Portal

• Unified, real-time balance management across all services - mobile & Wi-Fi

• Single subscriber account across all services - mobile & Wi-Fi

• Customers can use one voucher to purchase mobile & Wi-Fi services

• Existing mobile subscribers can use SMS to pull credit or charge Wi-Fi services to the mobile account

Through integration, the mobile core can be extended to serve as the main balance manager for Wi-Fi services in addition to the existing mobile services. To initiate Wi-Fi services, Alepo IN to IP Charging Gateway checks for a subscriber’s real-time balance and sends rated accounting information in order to credit or debit the balance according to the real-time usage.

Voucher refills made through the Alepo Web Portal can be pushed to the corresponding mobile core subsystem, allowing operators to extend existing prepaid mobile vouchers for the purchase of Wi-Fi services, allowing subscribers to top up mobile and Wi-Fi services with a single, familiar voucher. This functionality notably helps to lower operator costs of building a new distribution chain and brand awareness for Wi-Fi vouchers.

Subscriber information, including MSISDN, can be synchronized between the Wi-Fi platform and the mobile core to allow for unified subscriber identity management. This enables IN- and IP-based services to be merged onto a single subscriber account, and makes it possible for the mobile core to handle Wi-Fi-only customer accounts as well.

Alepo has proven knowledge and expertise in integrating with mobile core network infrastructures in order to realize convergent, next generation services. Leading operators, including France Telecom and Digicel, have relied on Alepo’s professional services to realize their convergent business needs.


Core Charging Integration

Achieving Convergence - IN to IP Core Integration

HOW TO GROW A WI-FI HOTSPOT FOOTPRINT

3


Cameroon’s largest converged operator, MTN, employed Alepo’s Wi-Fi Hotspot Management Platform as a tiered model in order to quickly cultivate an expansive nationwide Wi-Fi hotspot network.

Integration with MTN’s existing mobile core infrastructure granted flexible payment options to mobile subscribers as well as unified balance management. In addition, the Alepo Wi-Fi portal was customized to mimic the look and feel of the existing portal, creating a seamless experience between mobile and Wi-Fi.

By partnering with Alepo, MTN was able to quickly forge partnerships with small businesses and academic institutions in order to realize their vision for an expansible, carrier-grade Wi-Fi hotspot network.

With a Tiered Wi-Fi Hotspot Network Model, mobile operators can quickly and cost-effectively expand their Wi-Fi hotspot footprint by leveraging & revenue sharing with partners and resellers.

Partners benefit from low-cost setup and maintenance (no expensive onsite software), branded portal pages and accurate commissions based on actual usage, rather than original point of purchase, making it an attractive microbusiness model.


A Tiered Wi-Fi Hotspot Network Model MTN CASE STUDY

Access Network

Internet Subscribers

IN

Partner C Access Point

Partner A Access Point

Partner B Access Point

Access any hotspot with a single

account

Branded Portal Pages & Location-Specific Content

Alepo Wi-Fi Hotspot Platform MTN Mobile Core

MTN Loaded Web Portal

Wi-Fi Hotspot Web Portal

Wi-Fi Hotspot Management

Wi-Fi Hotspot Server

To read the full case study, please contact your Alepo sales representative.

Corporate Headquarters & North America Sales Austin, Texas +1 (512) 879 1030 [email protected] EMEA Regional Sales Paris, France +33 3 69 61 81 92 [email protected] CALA Regional Sales Buenos Aires, Argentina +54 11 4711 8235 [email protected] APAC Regional Sales Mumbai, India +919820145547 [email protected]

www.alepo.com Twitter: @AlepoUSA

Facebook: /AlepoUSA

LinkedIn: /Company/Alepo

Founded in 1994, Alepo is a leading provider of enabling infrastructure for telecommunications service providers. Alepo provides IT systems and IT consulting services for telecommunications companies, enabling them to compete efficiently and realize next generation service opportunities. Alepo is proud to support innovative market leaders such as France Telecom, Digicel and Charter Communications as they evolve in the telecommunications marketplace.

Alepo’s comprehensive suite of Wi-Fi Solutions enables mobile operators to successfully implement, expand and capitalize on Wi-Fi services. Tailored each operator’s unique business needs, Alepo’s solutions integrate seamlessly with a mobile operator’s existing IN-based infrastructure to allow for effortless and automatic Wi-Fi authentication, as well as convergent services, including unified balance management, across all legacy and NGN technologies.

Alepo’s solutions are built according to the design principles of compliance to standards, automation, flexibility, scalability and feature-richness. The company has partnered with leading manufacturers of telecommunications equipment to ensure improved interoperability and smooth customer experience for users. Maturity, stability and innovation make Alepo a market-leading vendor of solutions for both greenfield and established service providers.


About Alepo

CONTACT ALEPO

Documents

Emerging Carrier Wi-Fi Hotspot Opportunities White Paper