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Wireless Industry Swallows the Wi-Fi Pill

At this year’s Mobile World Congress, you would expect LTE to hog the spotlight, but LTE might find itself overshadowed by a far less-sexy technology: Wi-Fi. As telecom vendors prep their new portfolios for the big Barcelona showcase in two weeks, a preponderance of Wi-Fi products marks the mix. That could mean the world’s largest cellular network event will be dominated by a distinctly non-cellular technology.

Alcatel-Lucent (ALU:FP) is adding Wi-Fi to its new lightRadio small-cell architecture, acknowledging that the small-cell networks of the future won’t just be composed of miniature versions of the big macro cells looming from towers. They will also exploit cheap Wi-Fi access points, using free, unlicensed spectrum.

Rather than come out with its own line of dedicated access points, Alcatel-Lucent is incorporating Wi-Fi radios directly into lightRadio’s unique Cube design. The idea is for operators to deploy hybrid Wi-Fi and cellular networks, leaning on Wi-Fi to offload heavy volumes of Internet-bound traffic while using traditional 2G, 3G, and 4G radios to provide the operator’s core voice-and-data connectivity. Alcatel-Lucent is incorporating the tech, which it simply calls lightRadio Wi-Fi, into femtocell and metrocell configurations of lightRadio’s modular Cube architecture.

LightRadio is still a year or two from commercial deployment. Meanwhile, Alcatel-Lucent is working with outside Wi-Fi vendors—so far unnamed—to incorporate their access points into its existing 3G and 4G networks. The Franco-American vendor’s service gateway will be the glue holding those components together, managing disparate Wi-Fi and cellular connections as part of a single network. When customers pass between its Wi-Fi and cellular pools, the gateway recognizes and tracks them, eliminating the need for their devices to constantly log back in to either data network.

Ericsson (ERIC), the world’s largest wireless-infrastructure supplier, aims to break into Wi-Fi through acquisitions. Last month, I reported that Ericsson is in the process of buying metro-Wi-Fi vendor BelAir Networks. At MWC, we may witness the official announcement.

Ericsson’s Hybrid, Small-cell Tech

BelAir will give Ericsson instant access to not only an outdoor, high-performance Wi-Fi product line that can scale to hundreds of thousands of hotspots, but also a hybrid small-cell technology similar to lightRadio Wi-Fi.

While waiting for final acquisition details to emerge, BelAir is continuing to build on its technology. Leading up to MWC, the company announced enhancements to optimize its GigXone platform for its new role in the mobile data network. In particular, BelAir is building buffering technologies (to cut down on jitter and latency and video streams), filters that block out interference from nearby cellular radios, and beamforming techniques designed to boost its access points’ range and capacity.

Cellular technology pioneer InterDigital (IDCC) has turned its attention to the next generation of Wi-Fi, exploring how the technology can be expanded into emerging unlicensed bands like the white spaces between TV broadcasts (that is, if Congress actually allows unlicensed use of white spaces). InterDigital is launching a technology at MWC called Integrated Dynamic Spectrum Management (PDF), which detects and harvests unused spectrum in the white space bands and bonds them to regular Wi-Fi signals, creating an ultra-high-capacity connection between device and hotspot.

This week Stoke introduced a new “clientless” network gateway, which allows Wi-Fi networks to identify subscribers by their operators and automatically connect authorized users without requiring any specialized software on the device. That may sound like a small thing, but one of the biggest obstacles carriers face in embracing Wi-Fi is that there is no easy way to sort out devices that have permission to access their access points from those that don’t.

Today, operators get around that obstacle by requiring customers to log into their access points—which many subscribers aren’t willing to do—or by installing clients on their customers’ handsets that automatically recognize authorized hotspots and seamlessly link to them. The holy grail for carrier-grade Wi-Fi, though, is for hotspots to recognize devices by their SIM cards, as cellular networks do.

A Mobile Wi-Fi Revolution?

Cisco Systems (CSCO) is very bullish on overall mobile data growth, but in the latest Visual Networking Index report released on Feb. 14, the company heavily downplays the role of Wi-Fi in future networks. Cisco estimated that 11 percent of all mobile data traffic was offloaded onto Wi-Fi networks and private femtocells in 2011, which is significant when you consider that only a handful of global operators embraced Wi-Fi. What is shocking is Cisco’s projection that only 22 percent of that traffic will traverse Wi-Fi connections in 2016.

Cisco tends to be conservative with its numbers—for the past several years it has had to retroactively revise its data-traffic estimates upward—but the company seems to be particularly cautious on its Wi-Fi projections, assuming only lackluster support from operators for Wi-Fi. It is easy to get that impression today in the U.S. because carriers such as Verizon Wireless tend to dismiss Wi-Fi. Even operators that back the technology, such as AT&T (T), haven’t exactly gone gangbusters with deployments.

But in other regions of the world, operators are diving in. Japan’s KDDI (9433:JP) is building a network of 100,000 access points, while mobile upstart Free Mobile is stirring the market in France with a cheap wireless service built on a hotspot backbone of five million residences.

Activity by a lot of vendors around a new technology doesn’t necessarily reflect strong operator demand (look at WiMAX). In this case, infrastructure suppliers probably aren’t generating meaningless buzz: They have little incentive to do so. If operators weren’t interested in Wi-Fi, vendors such as Ericsson and Alcatel-Lucent wouldn’t go anywhere near the technology because they stand to make little money from it. When it comes to selling network capacity, cellular technologies are a far more profitable enterprise.

My guess is that operators are applying enormous pressure on vendors to integrate Wi-Fi in their networks—and quickly. That is why MWC this year may look more like a Wi-Fi networking event than a cellular-networking one.

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Fitchard is a writer for the GigaOM Network.

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