GSMA White Paper: Smart connectivity and why it matters
Intelligent mobile networks will be fundamental to delivering the Connected Life
Ultimately, everyone and everything that can benefit from a wireless connection will have one. Today, there are around 9 billion connected devices – of which 6 billion (mostly handsets) are connected by mobile networks. The total figure is set to rise to between 24 billion and 50 billion connections by 2020 as a wide range of new devices, machines and vehicles connect to networks.
By the end of this decade, seamless and intelligent connectivity between people, processes and products could enable a wealth of personalised and relevant services to be delivered whenever and wherever they are required. We call this concept “the Connected Life”. At the heart of it all will be smartphones and other personal devices, allowing us to sense, and interact with, the connected digital devices around us.
If mobile operators and their partners can deliver the Connected Life, it will enrich individuals’ personal lives with compelling new services that can anticipate their every need. At work, the continuous availability of relevant information will enable both employees and business leaders to make better-informed decisions and become far more efficient and effective. By 2020, the Connected Life could have a positive global business impact of approximately US$4.5 trillion, through the creation of new revenues, cost reductions and service improvements, according to research by the GSMA and Machina Research.
But delivering the Connected Life will depend on the widespread availability of intelligent mobile broadband networks and that, in turn, will depend on the availability of more spectrum, supported by a sufficiently flexible regulatory environment in the telecoms sector and in other industries. In many countries, the regulatory frameworks in healthcare and financial services, for example, will need to be adapted to facilitate much greater use of connectivity.
More spectrum is needed because the traffic on mobile networks is growing exponentially. Leading mobile equipment supplier Ericsson forecasts (Traffic & Market Data Report) that mobile data traffic will grow tenfold between 2011 and 2016. Even with new spectrum, mobile operators will need to be able to manage the fast rising tide of traffic on their networks, both to deal with congestion, and to tailor delivery to specific service requirements.
Mobile networks’ contribution to the Connected Life could go far beyond simply providing connectivity. With the appropriate privacy safeguards in place, mobile networks could also provide real-time information about the quality of a device’s connection, its capabilities and whether it is moving and in what direction. For example, a connected vehicle could travel more efficiently through a congested city avoiding traffic jams, whilst also providing real time movement information to help city authorities manage traffic incidents, deliver efficient road pricing and provide better route management.
Mobile networks also have many other important capabilities – they can, for example, provision devices remotely and they can identify, authenticate and, if necessary, bill people and companies. Crucially, they are also secure and reliable.
This paper explores how and why intelligent mobile networks can deliver the Connected Life.
Extensive and expanding coverage
If sufficient spectrum becomes available, mobile broadband could become almost ubiquitous within a decade. In the next four years alone (2012 through to 2015), the mobile industry will invest US$793 billion in expanding the coverage and capabilities of mobile networks, according to research by A.T. Kearney, GSMA Wireless Intelligence and Machina Research.
Much of that money will be invested in mobile broadband networks that use either High Speed Packet Access (HSPA) or Long-Term Evolution (LTE) technologies. Today, more than 390 HSPA networks, offering throughput speeds of up to 14.4 Mbps are live in more than 150 countries, according to Wireless Intelligence. Many mobile operators are upgrading their HSPA networks using a technology known as HSPA+. There are now more than 170 HSPA+ networks, offering speeds of up to 42.2Mbps, providing commercial services in more than 90 countries.
Where new spectrum is available, HSPA networks are increasingly being complemented by LTE networks, offering downlink speeds of up to 100Mbps and uplink speeds of up to 50Mbps – better than the performance of most fixed-line broadband connections. There are now 68 LTE networks live in more than 30 countries. Based entirely on Internet Protocol (IP) technology, LTE networks are also highly responsive, with a latency of just 20 milliseconds, enabling an array of applications that depend upon precise timing.
The widespread deployment of LTE at low frequencies could also bring other important benefits. In the 700MHz and 800MHz spectrum bands, radio signals travel long distances and easily penetrate walls and buildings. The use of this spectrum enables mobile operators to expand coverage cost effectively and enable a host of new applications, such as in-home security monitoring and smart metering.
Leading equipment supplier Ericsson estimates that more than 45% of people worldwide were covered by mobile broadband (WCDMA/HSPA) networks at the end of 2011. That represents an increase of 10 percentage points in just one year, up from 35% population coverage at the end of 2010. If sufficient low frequency spectrum becomes available, mobile broadband networks are likely to become as widespread as GSM networks, which now cover more than 85% of the world’s population. Moreover, like GSM networks, most HSPA and LTE networks are set to enjoy a long life, spanning at least two decades.
As network coverage expands, global mobile broadband connections will leap from 1.3 billion at the end of 2011 to 3.2 billion at the end of 2015, encompassing a rise in LTE connections from 10 million to 353 million, according to A.T. Kearney, Wireless Intelligence and Machina Research.
This dramatic expansion in the uptake of mobile broadband is being driven by demand for continuous and ubiquitous connectivity. Most people don’t want to wait until they are at home or in the office to get online – connectivity has become essential to both personal and professional lives. Some 92 per cent of the 1,900 mobile broadband business users surveyed by Ericsson’s Consumer Lab in 2011 agreed that “it is important to be able to use mobile broadband everywhere, regardless if it is via laptops or smartphones.”
A single global approach
HSPA and LTE, like GSM, are truly global standards, in use across every continent. Crucially, LTE and HSPA technology have also been designed to be fully compatible with each other and GSM. That means that a mobile device can easily connect to the best network available – if there is no LTE coverage, it can use HSPA or GSM.
That has a number of important benefits. Equipment makers can produce devices that will work on many different mobile networks across the world, enabling roaming across international borders and generating economies of scale. Roaming agreements between operators, combined with the use of a subscriber identity module or SIM, enables a device, machine or vehicle to quickly and easily connect to a new mobile network, without the need to key in passwords or other authentication details.
The ability of mobile devices to roam freely across international borders enables a wide range of innovative and valuable applications. For example, Microwave Telemetry Inc. uses mobile connectivity (supplied by Telenor Connexion) in its electronic devices to track avian and marine species across six continents and thousands of kilometres, covering entire migration routes.
The advent of “Embedded SIM” technology will provide even greater flexibility, enabling the remote provisioning of a connected device or its transfer from one network to another. For example, Telefónica and China Unicom have tested an Embedded SIM solution that enables subscriptions to be transferred between Telefónica Spain, Telefónica UK, Telefónica Germany and China Unicom over the air. This Embedded SIM technology can be added to devices, machines and vehicles during the manufacturing process before their ultimate destination or mobile network provider is known. It will also allow a subscription to be swapped from one mobile operator to another during the lifetime of the device or the machine.
The inherent capacity constraints on mobile networks mean that operators need to be able to manage the traffic on their networks, both to alleviate congestion, and provide the optimum level of bandwidth for a specific application. For example, an operator may need to prioritise the data packets involved in a live video call over those in an email with a large attachment. To justify continued investment to support new Internet-based services, networks and infrastructure, mobile operators also need the flexibility to negotiate commercial arrangements with service and content providers regarding network operation and content distribution.
Mobile networks use gateways that enable operators to provide managed connectivity, rather than the best-efforts approach that prevails on the traditional internet. In this way, an operator could provide a specific higher quality of service and reliability to customers who are prepared to pay for more bandwidth.
Mobile operators’ ability to manage traffic is enhanced by a real-time view of what connected devices are doing. Sophisticated technologies, such as deep packet inspection and pattern recognition functionality, enable operators to identify the kind of traffic travelling over their networks. Where necessary, operators could then reallocate bandwidth to interactive or delay-sensitive applications or those which are associated with a specific quality of service. Vodafone Netherlands, for example, said in April that it will offer enterprise customers, on a premium data plan used with laptops or tablets, extra bandwidth during peak hours.
This kind of network management will ultimately be vital to deliver the Connected Life. Without it, demanding multimedia applications may soak up most of the network capacity, leaving little bandwidth for others. Or put another way, vital services, such as the monitoring of chronic diseases, may be swamped by trivial entertainment apps. Therefore offering improved quality of service for customers across a range of services.
It is also crucial that mobile operators and software developers work closely together to make apps more sensitive to the ways in which mobile networks operate. For example, in a mobile environment, apps need to keep signalling traffic to a minimum to avoid soaking up limited network resources.
Customer relationship management
With the appropriate privacy and security safeguards in place, the ubiquity and long life-span of mobile networks opens up new opportunities for product companies to build lasting relationships with their customers. For example, manufacturers of connected cars are beginning to use mobile connections to provide the buyer, more choice, with an array of value-added services from remote diagnostics to pay-as-you-drive insurance to stolen-vehicle tracking. An on-board unit in new Renault cars uses a dedicated mobile connectivity solution from Telenor Connexion to connect to the Renault Global Data Center in a private network environment. In Europe, Renault uses this connection to provide drivers of its electric vehicles with appropriate services and information, such as the location of charging stations and advice on how to optimise the performance of their car batteries.
Furthermore, mobile operators have traffic analysis tools that can monitor subscribers’ behaviour and the type of applications being used. This valuable information could help companies from many different sectors of the economy build a better understanding of their customers and potential customers. For example, mobile operators could see how many people in a shopping mall are using their mobile handsets to browse retail websites and which demographics they belong to. In the navigation sector, Vodafone has supplied TomTom’s live traffic services with anonymous cell phone data, showing the speed and direction of movement of vehicles containing devices connected to Vodafone’s network. Therefore enabling Tom Tom’s customers to navigate more efficiently and reach their destinations more quickly.
Of course, such services need to respect individuals’ privacy and safeguard their personal data. To that end, existing practices and regulations governing privacy, data security and Internet safety, which typically originate from before the rise of smartphones and social networking, now need to be reviewed by both the mobile Internet ecosystem and policy makers. Today, many people are increasingly enmeshed in an international web of online relationships, but online privacy and safety is still mostly governed by a patchwork of national and local laws.
At the same time, in many countries, the regulations governing an array of industries, such as healthcare, financial services and utilities, will need to be adapted to enable the greater use of digital and mobile technologies.
Crucial contextual information
Mobile operators are increasingly exposing application programming interfaces (APIs) to enable third-parties to access key contextual information, such as location and connection speed, captured by their networks. These APIs are being standardised through the GSMA’s OneAPI programme so that apps can use the API across many different mobile networks. There are APIs that enable an app (with the user’s permission) to accept payments through mobile operators’ billing systems, send an SMS or MMS, establish the gender of a mobile customer or determine their location, verify that the customer is above a certain age, check connection speed and initiate a voice call.
A growing number of mobile operators are also adding IMS (IP Multimedia Subsystem) technology to their networks, which makes it straightforward for one device to query the capabilities and status of another. IMS technology will underpin the rollout of “Rich Communications Services” that will “know and show” what services another device can receive at any given time. For example, a smartphone’s address book could indicate whether a contact’s device has a sufficiently good connection to receive a video call and so improving the customer experience for video calling.
Security, authentication and billing
The connection between a mobile device and the mobile network is authenticated and secured using encryption algorithms. When a device connects to a new network, the operator’s Authentication Centre challenges the SIM application inside the device. The SIM uses its unique security credentials to generate responses to these challenges, which are then compared with those expected by the Authentication Centre.
Operators’ billing systems identify specific events for which charges are levied against the customer’s account. With the appropriate privacy safeguards, these systems could be used by a wide range of businesses to understand a great deal about their customers’ behaviour patterns.
New business models
Mobile operators can bill for usage of their networks in many different ways, including flat-rate pricing, tiered pricing (depending on the volume of the data used) and service-specific pricing. They can also bundle the cost of connectivity in with the price of the device (in such cases, an operator can take a percentage of the selling price and, perhaps, follow-on purchases). Moreover, operators can use their service authorization and real-time charging capabilities to develop many other business models, incorporating partners and other service providers. For example, using deep packet inspection and other network technologies, mobile operators can charge different rates for different kinds of data traffic, so real-time applications, such as video streaming, could be provided as a premium service. Mobile operators can also offer dynamic pricing, offering customers a discount, for example, when there is spare capacity on the network. This flexibility is valuable to consumers in order to appropriately support their increasingly personalized, diverse and dynamic behaviour.
Redundancy and reliability
In general, mobile radio networks are highly reliable: Downtimes of more than a few minutes are rare. To guard against equipment failure, mobile operators build redundancy into their networks. For example, nodes within the network are often connected by pairs of connections, while the nodes themselves are generally equipped with spare components that can take over if an active component fails.
More fundamental failures, such as power outages, can be addressed by the use of batteries, diesel generators or some other form of site-based power supply. The result is a network that is highly resilient to the failure of equipment and connections, and hence offers a high availability service to its customers. In the rare instances where radio networks fail, an operator may have arranged to supply connectivity through a ‘back-up’ roaming partner.
Conclusion – curating the Connected Life
In summary, with sufficient spectrum, supported by the right regulatory environment, mobile broadband networks will underpin the Connected Life
Mobile networks can offer far more than basic connectivity. They can provide curated connectivity, in which the bandwidth on offer is managed according to the service in use. Moreover, mobile networks can provide the support capabilities, such as authentication, security and billing, needed to create the business models that will sustain online apps and services.
Finally and, perhaps most importantly, mobile networks can capture an enormous amount of real-time contextual data that can be used to make services and applications smarter, personalised and more responsive. With robust privacy safeguards in place, this constant stream of high-quality data will greatly enrich our connected lives.