Alepo 5 Emerging Innovations Carrier-WiFi

Summary
With mobile data usage on the upswing, wireless carriers are looking to
Wi-Fi hotspots as a viable option for the delivery of high speed internet
services on mobile devices. With the introduction of Wi-Fi hotspots to
their overall mobile data strategy, carriers can unlock new revenue
channels, drive up business value, and optimize network resources and
efficiencies.

This Alepo white paper reveals five emerging innovations surrounding
Carrier Wi-Fi offload and monetization that are advancing opportunities
for wireless carriers in making Wi-Fi hotspots a fundamental and viable
part of their mobile data strategy.

Specifications subject to change without notice.
All content is copyrighted © 2012 by Alepo.
Alepo SE and Alepo logo are trademarks of Alepo.
Others are trademark of their respective owners.

ALEPO WHITE PAPER | 5 EMERGING INNOVATIONS IN CARRIER WI-FI

Introduction
It’s no question that Wi-Fi is a mature and widespread technology,
today reaching over 700 million homes, schools, enterprises and
hotspot locations worldwide. Its reach continues to grow as more Wi-Fi-
enabled mobile devices, including smartphones, tablets, laptops, e-
readers, and music players, hit the market. As data usage on mobile
devices continues to sky rocket, wireless carriers are beginning to see
great potential in leveraging Wi-Fi in order to capitalize on new revenue
channels and to reduce congestion on cellular networks.

Whether implemented by a wireless carrier, cable or internet service
provider or through a partnership with an existing Wi-Fi provider or
aggregator such as Boingo, a Wi-Fi hotspot network can offer an
alternative or complementary means to the delivery of high-speed
internet services to customers. Cost-efficient, widely supported and
readily deployable, Wi-Fi hotspot networks are an attractive and
immediate option for carriers looking to supplement their existing data
services, offload from cellular networks, or generate additional revenue
with a paid Wi-Fi hotspot business model.

Key Drivers for Carrier Wi-Fi

→ Carrier Wi-Fi can be used to deliver high-speed internet services
to customers at a relatively low cost per byte.

→ Carrier Wi-Fi can relieve data-congested cellular networks and
optimize network resources through automatic Wi-Fi offload.

→ Carrier Wi-Fi can offer greater control over the customer
experience than unsecure, public Wi-Fi hotspots in terms of
security, accessibility, ease of use and consistency across
multiple hotspot locations.

→ Carrier Wi-Fi can be packaged as a value added service (VAS),
boosting customer loyalty and ARPU of existing customers.

→ Carrier Wi-Fi can create new revenue streams and paid Wi-Fi
hotspots business models that reach a wider range of customers.

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As carriers deliberate exactly how Wi-Fi fits in their overall mobile data
strategy, they must consider a myriad of questions and challenges that
span the network, the business opportunity and the customer
experience. From a network perspective, this includes a number of
questions on security, integration with legacy networks and support for
a wide variety of mobile devices. Business-wise, carriers have been
challenged by competition from free, public Wi-Fi hotspots and doubts
about how best to sell or package Wi-Fi hotspot services. And, in
regards to the customer experience, carriers must consider how to
ensure a consistent, simple and ubiquitous experience across networks
in order to facilitate adoption and encourage use.

Ongoing work in the development of standards, industry initiatives like
NGH and Hotspot 2.0, and vendor solutions addresses these
considerations and is driving forward the opportunities for Carrier Wi-Fi.
This work has given rise to new possibilities for service innovation, new
revenue channels, and partnerships. Advancements in technologies
that enable automatic and granular Wi-Fi offload, manageable
partnerships, and profitable hotspot networks make it possible and
viable for wireless carriers to launch Wi-Fi hotspot services and reach
customers with differentiated service offerings.

The following pages discuss five emerging innovations in Carrier Wi-Fi
and their implications for wireless carriers. These innovations, while not
an exhaustive list of the current advancements being made in Wi-Fi
technology, center on the areas of Wi-Fi offload and Wi-Fi hotspot
revenue generation, specifically:

1 Making Wi-Fi Offload Secure & Automatic
2 Making Carrier Services Available on Wi-Fi
3 Enhancing Network Discovery & Selection
4 Monetizing Wi-Fi Hotspots
5 Forging Partnerships across the Wi-Fi Ecosystem

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Making Wi-Fi Offload Secure & Automatic
Wi-Fi offload can be a win-win situation for carriers and subscribers. By
offloading mobile data traffic from a 2.5G or 3G cellular network to a
Wi-Fi hotspot network, carriers can optimize available cellular network
resources, increase overall capacity and reduce bottlenecking of
service. By alleviating congestion caused by heavy smartphone internet
usage, carriers can better allocate their cellular network resources to
other customers for voice calls and other services. In turn, offloaded
subscribers experience the advantages of high-speed Wi-Fi access
without having to manually connect or log in.

In order to realize the full potential of Wi-Fi offload, the process of
moving from a cellular network to a Wi-Fi network must be automatic
and transparent to the end user. If it is not, the offload has to be
initiated by the end user himself, which often requires the user to
To realize the full potential of manually select the network and enter a security key or login
Wi-Fi offload, it must be:
credentials to connect. This can cause a significant drop-off in adoption
→ Automatic & Hands-Free and undermine the goals of the offload solution.
→ Transparent to End Users
→ Secure across the Network Yet, achieving an automatic and transparent offload process is not
→ Available for a Myriad of child’s play. To protect the integrity of the network as well as subscriber
Mobile Devices data, the mobile subscriber must be securely authenticated to the Wi-Fi
hotspot network during the offload process. This means that the
subscriber’s identity (e.g., IMSI) and login credentials are sent over the
Wi-Fi hotspot network, which is, by definition, a non-secure, non-
trusted network. If not addressed properly, this can pose security risks,
such as exposing login credentials to possible interception or corruption
during the authentication process, making it possible for unauthorized
users to access the network.

Another challenge in realizing automatic and transparent offload is the
considerable variation in mobile handsets and operating systems. Most
Wi-Fi offload solutions available today require a SIM card to perform
secure authentication, which overlooks a large number of popular
mobile devices on the market today that do not support SIM cards.
Carriers require an offload solution that works for their customers
across multiple types of devices.

Page | 4


There are a number of innovative approaches to realizing Wi-Fi offload
that provide secure authentication while maintaining an automatic and
transparent process. These approaches create transparent methods for
offload that accommodate the diversity of mobile devices in use today.

Wi-Fi Offload via EAP SIM, AKA Authentication

One such approach to Wi-Fi offload is the use of a mobile device’s SIM
card to securely authenticate the subscriber to the Wi-Fi network via
EAP SIM or EAP AKA authentication methods. This method of
authentication utilizes encrypted data from a mobile device’s SIM card
to authenticate and optionally authorize a user via an authentication
gateway. The gateway commonly sits between the AAA server in Wi-Fi
core network and the HLR or HSS in the mobile core network to fetch
authentication vectors over a standard Diameter or SS7 interface. The
process is highly secure, since it utilizes the same proven and secure
authentication methods already used in mobile networks. When
combined with IEEE 802.1x authentication standards, EAP SIM and EAP
AKA can provide a secure, encrypted connection to WLAN equivalent to
3G or LTE levels of security.

Alepo Wi-Fi to Mobile Authentication Gateway High Level Architecture

This approach to Wi-Fi offload requires no installations or changes to
the end user device, and it works with any WPA Enterprise or WPA2
Enterprise-enabled access point, making it a readily available solution

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on the market today. In addition, this method minimizes dependency on
other network components, needing light integration with the mobile
core network over a standard SS7 interface to function fully.

This type of Wi-Fi offload limits its support to devices that natively
utilize SIM cards. Some devices that do not natively support EAP SIM or
EAP AKA authentication methods may be patched to do so. However,
since a number of mobile devices used to access Wi-Fi networks today
do not support this offload approach, carriers may consider a multi-
pronged approach in order to realize a robust and comprehensive
offload solution.

Wi-Fi Offload via Mobile App

Another approach to Wi-Fi offload is the use of a mobile app to securely
authenticate the subscriber to the Wi-Fi network. Installed on the end
user’s mobile device, the app works in the background to authenticate
the subscriber to the Wi-Fi hotspot network without requiring the end
user to manually enter login credentials. Automatic and transparent,
this solution bypasses the need for a SIM card to perform secure
authentication, making it a highly available option for a wide range of
mobile devices.

In order for the mobile app to perform secure and automatic offload,
two processes must occur. First and foremost, the app must be installed
on subscribers’ mobile devices, either through factory installation,
customer download (a good option for an opt-in model), or over the air
provisioning. Second, the mobile app must obtain and store the login
credentials from the network, known as an enrollment process.
Enrollment can be handled in multiple ways, including certificate
sharing using EAP TLS / TTLS authentication methods or sending a one-
time password over SMS. These options ensure the best fit for each
carrier’s network topology and security requirements.

Depending on the type of enrollment process as well as the carrier’s
existing network topology, this approach to Wi-Fi offload may be
completely self-contained, requiring little to no integration with the
existing mobile core network infrastructure. This allows for a more rapid
deployment that does not impact or interrupt existing services.

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Making Carrier Services Available on Wi-Fi
In the pursuit of creating an experience on Wi-Fi that is comparable to
3G or 4G mobile data networks, carriers are seeking out ways to
providing secure, uninterrupted access to carrier IP services, such as
voice, video and other multimedia services. Connections to hotspots
outside of a carrier’s own network pose a particular challenge, since the
delivery of carrier services requires interworking with the carrier’s core
network. Because Wi-Fi is considered a non-trusted, non-3GPP access
technology that has traditionally lacked sufficient methods for
encryption and secure transport of data traffic, it can expose the core
network to security risks.

Multiple industry organizations, including the 3GPP and Wi-Fi Alliance,
have had stakes in the development of a standard architecture to
enable Wi-Fi interworking and roaming with access to voice, video and
multimedia services in the carrier’s 3G or 4G core network. The iWLAN
architecture, standardized by the 3GPP, promotes secure connections
between the packet core network and Wi-Fi networks. The iWLAN
architecture designates a secure connection to the carrier’s core
network via an IPSec tunnel, which extends from the UE, through the
wireless access gateway (WAG), the GGSN, and from there to the core
network or the internet. It utilizes security keys (IKEv2) for
authentication, and interacts with a AAA / AAA proxy framework to
retrieve subscription information and authorize the connection.

3GPP iWLAN Architecture
Page | 7


Along with carrier voice, video and data services, iWLAN could enable
carriers to extend a breadth of 3G services and functionality to the Wi-Fi
environment. Carriers may provision, authenticate and authorize traffic
for their carrier services on Wi-Fi networks, just as they do for their 3G
networks, and they can enforce policy on these services. Additional
capabilities include lawful intercept and unified charging and billing.

Yet a number of challenges of this infant architecture remain. Upon
connection to a Wi-Fi network, a new session must be established, with
subsequent interruption in services. In addition, this architecture
requires a special UE client that may not be available in all devices, as
well as some investment in additional infrastructure for the core
network, including a WLAN access gateway (WAG) to handle policy
enforcement and accounting functions, and additional packet data
gateway functionality to handle session management, IPSec tunnel
termination, and routing and charging events.

Session continuity is particularly sought after for creating a thoroughly
seamless interworking experience, and it is currently driving efforts to
develop new standards. The 3GPP has developed an alternative proxy
MIP offload architecture, allowing mobility and session continuity
between Wi-Fi and mobile data.

Page | 8


Enhancing Network Discovery & Selection
Going above and beyond automatic and transparent offload, automatic
network discovery and selection can enable carriers to more
discerningly offload mobile data traffic according to a number of
parameters, including network type, location, time, subscription type
and more. This can help carriers to overcome an “everybody on,
everybody off” situation that can paradoxically leave Wi-Fi hotspot
networks congested and cellular networks underutilized. With the
Automatic Network Discovery and Selection Function (ANDSF), a 3GPP-
deliniated evolved packet core (EPC) network element, carriers can
define granular rules for offload that best align with their network
resources and customer usage patterns.

The ability for carriers to set fixed network discovery and selection rules
engenders a plethora of new opportunities for more intelligent Wi-Fi
offload. Carriers can apply policies to their offload decisions to ensure
quality of service and a consistent customer experience for offloaded
customers. More so, carriers can offload less valuable mobile data
traffic while keeping revenue generating traffic on their mobile network,
thereby minimizing the risk of weakened revenues. Rules can be
configured for specific locations, hours and days of week, to relieve
network congestion and promote optimized network performance.
Through strategic offload decisions, carriers can also prioritize offload to
Wi-Fi hotspot networks for their roaming customers, in order to
alleviate the costs of roaming. Furthermore, carriers can utilize Wi-Fi
hotspot networks to minimize dead spots for their mobile subscribers,
to expand coverage and access to Wi-Fi for their customers and to
promote optimal customer experience by prioritizing the highest quality
connection at every geographic location.

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Monetizing Wi-Fi Hotspots
The ability to capitalize on Wi-Fi hotspot services can constitute a major
incentive for wireless carriers and service providers to incorporate Wi-Fi
services into their service portfolio and to grow their Wi-Fi hotspot
footprint. By monetizing Wi-Fi hotspots, carriers can offset the costs of
the Wi-Fi infrastructure and open new revenue channels for existing
and new customers. Even if the carrier’s main driver for a Wi-Fi hotspot
network is to increase cellular network capacity by offloading existing
mobile subscribers, the Wi-Fi hotspot network can be extended to new
and non-mobile subscribers as well. This affords wireless carriers an
opportunity to expand their reach to new customer segments, including
new and casual users, roaming users, as well as their existing mobile
subscribers using secondary, Wi-Fi-only devices.

Mobile Data Services Convergence (3G + Wi-Fi)
For existing mobile subscribers, there are boundless opportunities to
cross sell, upsell and bundle Wi-Fi hotspot services alongside mobile
data plans. Wi-Fi hotspot access may be bundled as a value added
service or as a flat-fee monthly add-on package to a mobile data plan.
For unmetered Wi-Fi hotspot services such as these, integration with
the carrier’s existing core network may be limited to the subscriber
repository, such as an HSS or HLR. Whether the subscriber is
automatically offloaded to the Wi-Fi hotspot services or logs in manually
through a web portal interface, authorization (whether or not the
subscriber has access to this service) can occur in tandem with the
authentication process, as previously discussed in the context of Wi-Fi
offload. For scenarios with more closely converged services, such
offering as a shared account balance for prepaid mobile data and
metered Wi-Fi hotspot services, integration at the charging level may be
required.

The potential also exists to create differentiated and tiered services
surrounding Wi-Fi hotspots. For example, a carrier could charge a higher
rate for prepaid Wi-Fi hotspot services at hotels and airports than at
parks and museums.

Page | 10


Wi-Fi Passes & International Roaming
Carriers can extend their Wi-Fi hotspot business models to offer Wi-Fi
data passes to new and existing customers as well as for Wi-Fi roaming
options. Wi-Fi data passes afford 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. For example, a carrier could offer an international Wi-Fi
roaming pass with up to one week of unlimited access to their own
hotspot network and international partner networks for a flat fee.

Examples of Different Wi-Fi Hotspot Business Plans

Page | 11


When exploring potential Wi-Fi hotspot business models and revenue
opportunities, carriers must consider their target audiences and how
those potential customers use the Wi-Fi hotspot network. At any given
Wi-Fi hotspot, a diverse mix of customers may have widely different
needs, expectations and device or payment capabilities. This can also
vary from market to market. Overall, there is no one-size-fits-all
business model, and the network architecture and level of integration
with existing services will reflect the unique business goals of each
carrier.

Page | 12


Forging Partnerships across the Wi-Fi
Ecosystem
Wi-Fi hotspots present growing opportunities for carriers to foster
widespread partnerships among a range of partners, from wireless
internet service providers (WISPs), to aggregators like Boingo, to
location owners such as hotels, airports and shopping centers, in order
to create highly extensible, cost-efficient hotspot business models.
Through partnerships and collaboration, carriers can ease Wi-Fi roaming
and resale models and more rapidly grow their Wi-Fi hotspot footprint,
while reducing overhead and infrastructure investments.

To make partnerships work across the Wi-Fi ecosystem, carriers are
turning to their BSS / OSS or back office suppliers to provide a
comprehensive partner management solution for Wi-Fi hotspot services.
A complete, carrier-grade partner management solution for Wi-Fi
hotspots includes the following features and functionalities:

 Define and support multiple types of partners, including roaming,
interconnect, resellers and suppliers
 Track commissions, as a percentage of sale or usage
 Perform accurate reconciliation and settlement
 Monitor performance of partner networks with business
intelligence and revenue reporting tools
 CRM integration

The growth of partnerships among carriers and hotspot providers
bolsters the potential to develop Wi-Fi networks that are as consistent
and unified as other access technologies. Widespread access to quality
Wi-Fi services is likely to prove an appealing prospect for attracting new
customers and network partners.

Page | 13


Case Study: Growing a Wi-Fi Hotspot
Business Model with MTN
Alepo’s work with MTN provides a real-world example of the viable
business opportunities surrounding Carrier Wi-Fi. To read the full case
study on this project, please visit www.alepo.com.

Overview

With more than five million subscribers, MTN is the leading mobile
operator in Cameroon. In 2010, MTN decided to expand its services
portfolio by building out a nationwide network of Wi-Fi hotspots for
prepaid internet services. Integration of the Wi-Fi hotspot network with
the existing mobile network infrastructure would allow MTN mobile
subscribers to maintain a single balance for 3G and Wi-Fi services and to
top up with a single voucher, creating a consistent and simple customer
experience across services and hotspot locations.

This project also focused heavily on the development of a micro-
business partnership model, wherein small businesses and institutions
could establish an MTN Wi-Fi hotspot at their respective locations, such
as cafes, hotels or universities, and create revenue sharing agreements
with MTN. This would allow MTN to quickly and cost-effectively expand
its nationwide Wi-Fi hotspot footprint, and would drive MTN customers
to the hotspot locations.

Solution Highlights

In collaboration with MTN, Alepo deployed an end-to-end Wi-Fi hotspot
platform that enabled the carrier to rollout prepaid Wi-Fi services
alongside their existing mobile data services on an expansible,
nationwide Wi-Fi hotspot network. The fully monetized, integrated
solution made it simple and convenient for customers to buy and
consume Wi-Fi services at any MTN partner Wi-Fi hotspot location.
Real-time policy and charging ensured zero leakage of revenue, even as
customers moved from hotspot to hotspot. What’s more, Alepo’s
centralized partner management tools made it possible to readily grow
MTN’s Wi-Fi footprint through revenue sharing partnerships in a highly
cost-effective way.

Page | 14


Solution Components

MTN High Level Network Architecture

Alepo Service Enabler for Wi-Fi (Including AAA & Prepaid Charging)

Alepo deployed its all-inclusive policy, charging and business
management platform, Service Enabler, configured for prepaid policy
and charging control, and integrated it with the existing core network.
The scalable, modular system was adapted for MTN to handle the real-
time rating, prepaid charging, accounting, reporting as well as user and
reseller management for the operator’s expansive Wi-Fi Hotspot
network.

The Alepo SE platform included the following modules and services:

 AAA Layer to handle user authentication and quota-based
accounting
 Real-Time Prepaid Rating & Charging to afford the utmost
granularity in creating viable service offerings while ensuring zero
leakage of revenue
 Partner Management to enable portal branding, usage-based
commissioning, and customer service
 Reporting Engine to provide 360° visibility of the network, including
revenue, user and network performance metrics
 Alepo SE Web Portals to manage customers and partners –
including the ability to set commissions – and to configure business
plans, manage IP pools, online sessions, revenue, reports and more.

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Alepo IN to IP Charging Gateway

Bridging the gap between the legacy GSM network and the IP-based Wi-
Fi network, the Alepo IN to IP Charging Gateway makes it possible for
MTN Cameroon to maintain a single, centralized balance manager
across all networks and services. The real-time charging gateway works
to query and manage balance information between the IN and the
Alepo charging node.

Alepo Hotspot Portal

Via Alepo’s Hotspot Portal, any customer can select a Wi-Fi pass and
prepay for services using a credit card or prepaid voucher. MTN’s
existing subscribers also have an option to charge the Wi-Fi services to
their existing mobile account as a value-added service. In addition, the
portal was customized to mimic the look and feel of the existing portal,
creating a seamless experience between mobile and Wi-Fi.

Alepo Wi-Fi Hotspot Server

Alepo’s Wi-Fi Hotspot Server is a robust solution that turns Wi-Fi
technology into a carrier-grade solution, engendering innovative and
expansible business models. The unique solution enables location
mapping and identification. It is used to perform rating and charging
based on location, whether the location is 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.

Page | 16


About 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
Contact Alepo in the telecommunications marketplace.
Corporate Headquarters
Alepo’s comprehensive suite of core network solutions enables service
& North America Sales
providers to successfully implement, expand and capitalize on 4G
Austin, Texas, USA
mobile broadband services. Tailored to each service provider’s unique
+1 (512) 879 1030
business needs, Alepo’s solutions integrate seamlessly with a mobile
sales@alepo.com
media@alepo.com operator’s existing IN-based infrastructure to allow for convergent
services, including unified balance management, across all legacy and
EMEA Regional Sales NGN technologies.
London, United Kingdom
+44 79 37 00 57 21 Alepo’s solutions are built according to the design principles of
emea.sales@alepo.com compliance to standards, automation, flexibility, scalability and feature-
richness. The company has partnered with leading manufacturers of
LATAM Regional Sales telecommunications equipment to ensure improved interoperability
Buenos Aires, Argentina and smooth customer experience for users. Maturity, stability and
+54 11 4711 8235 innovation make Alepo a market-leading vendor of solutions for both
latam.sales@alepo.com greenfield and established service providers.

APAC Regional Sales
Mumbai, India
+91 9820145547
apac.sales@alepo.com

www.alepo.com
Twitter: @AlepoUSA
Facebook: /AlepoUSA
LinkedIn: /Company/Alepo

Page | 17

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