Given China’s importance to the overall Service Provider WiFi (SP WiFi) market growth rate, we are revisiting the thesis that for leading SPs, the deployment of LTE delays the rollout of SP WiFi.  We studied China Mobile’s radio infrastructure deployment evolution, its wireless data and user trends to confirm this thesis that we have observed to be true at operators in Japan, USA and Korea.  We conclude that China Mobile, too, has de-emphasized the SP WiFi build-out around the time it began deploying LTE radio networks.

The reason we have studied this relationship between SP WiFi and LTE is because our SP WiFi projection shows an expected delay in deployment at mobile operators of around two years to account for the period during which each operator is deploying LTE.  Thereafter, we are assuming the operator then resumes SP WiFi building.  This resumption in SP WiFi building at mobile operators has yet to be proven, Figure 1as in Japan, Korea, and in the USA, we still haven’t seen a significant uptick in capital spending on WLAN infrastructure by mobile operators as of yet.  We do see evidence that mobile operators are currently in the early stages of deploying small cells with integrated WiFi.  However, we expect that standalone SP WiFi will be deployed in the future because it is a relatively affordable capital investment compared to cellular.  This capital investment delivers a relatively poor quality of user experience – the quality of service of WiFi is not as good as cellular – but we think it makes sense to continue deploying because nearly every mobile device will support WiFi and all operators can roam to WiFi networks.

Turning to the China Mobile case, specifically, we find that around the time when LTE base stations (mid 2013) were first deployed that the growth rate of SP WiFi access points slowed dramatically (Figure 1).   We also find that around that time (mid 2013), the fraction of wireless data served by WLAN networks reaches a peak (at 75% of traffic), suggesting a change in course for delivering wireless data to its users (Figure 2).Figure 2

For more information on this topic, you can refer to an earlier blog entry we posted about the experience in Japan and USA SP WiFi.


Chris DePuy

Posted by Chris DePuy on August 20, 2014

About Chris

Chris DePuy is responsible for Dell’Oro Group’s Carrier IP Telephony, Wireless LAN, Wireless Packet Core And Storage Systems market research programs. He has more than 20 years of financial and business analysis, and engineering experience.