Cisco Encourages UAE and KSA Mobile Operators to Offload Mobile Data to Wi-Fi to Save Millions
Cisco unveiled the findings of the Cisco Consulting Services (CSC) study of four business models that will help mobile operators in the UAE and Saudi Arabia provide Wi-Fi to achieve maximum results.
The world is going mobile, and the Middle East is no exception. In both the UAE and Saudi Arabia, there are more mobile subscriptions than people — the Saudi Arabian mobile subscription rate reached 181 percent of the population in 2012, while the mobile subscription rate in the UAE surpassed 159 percent. Mobile data is a big part of this growth, accounting for nearly half of UAE mobile subscriptions. In Saudi Arabia, wireless broadband subscriptions reached 11.7 million in the third quarter of 2012 — more than five times the number of landline broadband subscriptions. The fast-growing number of smartphone and tablet broadband connections is projected to consume more than 1.1 exabytes of data in in Saudi Arabia, and 677 petabytes in the UAE, by 2017. Demand for Wi-Fi has also grown substantially in the region since the early 2000s. The Cisco Visual Networking Index (VNI) projects that global IP traffic transmitted over Wi-Fi will represent 46 percent of all IP traffic by 2015 and the Middle East is no exception.
According to the CCS Wi-Fi study, this growth threatens to overload the capacity of regional mobile operators, who may be struggling to ensure availability of high-speed packet access (HSPA) and long-term evolution (LTE) spectrum. Wi-Fi could hold the solution, transforming wireless Internet access by offering higher speeds, improved security, and more availability on almost any connected device.
Globally, mobile operators are expected to drive Wi-Fi growth through accelerated technology adoption. Because of this, service providers must consider Wi-Fi a key pillar of their broadband strategies to increase revenues and decrease costs. In a recently published white paper, Cisco CCS outlines the four business models that will help operators in the UAE and Saudi Arabia provide Wi-Fi to achieve maximum results:
The CCS Study outlines that ‘Mobile data offload’ will enable mobile operators to maximize the benefits of Wi-Fi through cost savings, revenue generation and improved services. It is a viable alternative for serving mobile broadband users in crowded locations such as shopping malls, where spectrum availability for HSPA and LTE mobile access networks is limited. In addition, mobile data offload will give operators the opportunity to reduce data costs, allowing them to accelerate adoption and increase market share.
Cisco Consulting Services calculated cost reductions operators can expect between 2013 and 2017 under four offloading schemes. It demonstrated significantly greater savings as the percentage of mobile data offload increased. This model can help mobile operators in the Middle East reduce HSPA and LTE infrastructure costs by roughly 27 percent or USD $901 million in Saudi Arabia and $316 million in the UAE.
Cisco cautions that offloading data traffic to Wi-Fi requires significant investment. Based on its analysis, Cisco Consulting Services determined that UAE mobile operators would have to invest $51.6 million between 2013 and 2017 to provide Wi-Fi coverage to 916 buildings with total indoor space of 5,600 square kilometres and total outdoor space of 26,000 square kilometres for busy locations across Abu Dhabi, Dubai, Sharjah, and Al Ain. Saudi mobile operators will have to invest around $94.6 million to provide Wi-Fi coverage to 725 buildings with total indoor space of 7,000 square kilometres and total outdoor space of 69,000 square kilometres for busy locations across Riyadh, Jeddah, Dammam and Khobar. Costs will be less if mobile data traffic offload rates are reduced. Subsequently, to optimize the benefits of their Wi-Fi investments, operators should take a strategic approach, with user experience and long-term efficiency in mind involving creating a detailed business model, conducting a network assessment as well as selecting the right indoor and outdoor Wi-Fi locations.
Mobile Data Offload will have a great impact on the following:
1. Massively growing demand: Mobile operators are challenged to provide coverage for 677 petabytes of mobile data traffic in UAE and 1.1 Exabyte in Saudi by 2017. Mobile operators must invest in HSPA and LTE networks to address this growth. Offloading mobile data from HSPA and LTE to Wi-Fi networks is an attractive concept to mobile operators, but realizing it depends highly on their technical and strategic abilities.
2. Counteract the heavy investment required to build HSPA and LTE infrastructures: Without offloading mobile data traffic, UAE mobile operators will need to invest $1.225 million, and 3.318 million by Saudi mobile operators to expand HSPA and LTE networks by 2017.
3. Additional investment required to provide Wi-Fi coverage: Careful selection of indoor and outdoor Wi-Fi locations will help operators maximize the use of mobile data traffic offload. Costs will be lower if mobile data traffic offload rates are reduced.
4. Mobile data offload presents significant cost savings: Offloading 30 percent of the overall traffic will enable mobile operators to reduce costs by 26 percent in UAE and 27 percent in Saudi to obtain savings of up to $316 million in UAE and $ 901 in Saudi in five years. Savings will be less if the offload rate is reduced. For example in UAE, with offload rates of 20 percent and 10 percent, savings will be $203 million and $89 million, respectively. An offload rate of 5 percent will result in savings of $32 million.
Bader Al-Mubarak, Senior Manager Cisco Consulting Services and Author of the Wi-Fi White Papers
“We have invested considerable time and resources identifying what the implications will be for regional mobile operators in both the UAE and Saudi Arabia, if they do not offer Wi-Fi to complement and take the strain off high-speed packet access (HSPA) and long-term evolution (LTE) spectrum. Our Study clearly proves that ‘Mobile data offload’ will enable mobile operators to maximize the benefits of Wi-Fi through cost savings, revenue generation and improved services for their customers.”
Stuart Taylor, Director, Cisco Consulting Services, Service Provider Practice
“As demand for mobile devices and network connectivity continues to grow, cost effective Wi-Fi access will be critical for meeting the needs of mobility-enabled consumers in the UAE and Saudi Arabia. Service Providers are in an enviable position of being able to successfully provide an enhanced experience for their customers through transforming wireless Internet access and offering higher speeds, robust security, and more availability on almost any connected device.”
Rabih Dabboussi, Managing Director, Strategic Service Provider Business and UAE, Cisco
“One of the mandates of the governments of both Saudi Arabia and the UAE is to provide its citizens with universal access and connectivity. The significant increase of mobile devices coupled with the seemingly insatiable demand for bandwidth creates an opportunity for Service Providers in the regions to help deliver greater anytime, anywhere accessibility. With more and more people, things, processes and data being connected in the Internet of Everything, the intelligent network and the Service Providers who adapt and enhance their offerings them are more relevant than ever.”