Interview: Ruckus Wireless CEO Selina Lo

Wi-Fi as a form of mobile Internet offload has gone from a threat to wireless operators' bottom line to their bandwidth-crunch savior and is just on the cusp of becoming an actively managed part of their wireless service. (See Wireless Operators Embrace Wi-Fi as Their Own and Mobile Wi-Fi Offload.)

The market may have been dominated by Cisco Systems Inc. (Nasdaq: CSCO) at its inception, but it has since opened up to a number of smaller players, including Ruckus Wireless Inc. , which is racking up customers across the globe. (See Ruckus Makes Over KDDI With Wi-Fi Offload, Chongqing Telecom Creates a Wi-Fi Ruckus, Telstra Picks Ruckus and Ruckus & the Revenge of Metro Wireless.)

Ruckus CEO Selina Lo took the helm in 2005, leading the Wi-Fi specialist to profitability and helping convince carriers of all sizes to embrace what was once thought of as an unreliable technology. At the same time, she was apparently busy slamming her fist down on tables during meetings, walking into poles, burning competitor t-shirts worn by users trying to tick her off and taking tequila shots with customers.

But this side of the Sunnyvale CEO didn't come out in Light Reading Mobile's recent phone interview with her. Maybe she's gone soft or perhaps there are fewer users trying to piss her off in today's Wi-Fi-centric world. Whichever the case may be, Lo shared with us her thoughts on why Wi-Fi usage has become the norm and how wireless operators can better take advantage of it.



Contents:

— Sarah Reedy, Senior Reporter, Light Reading Mobile

Light Reading: How would you characterize the market today for carrier-managed Wi-Fi offload?

Lo: In one word, it is hot. However, I think the depth of understanding of the market is not as deep in the industry. Most people think carriers can buy from any of the Wi-Fi suppliers out there, but in fact, the carriers' requirements are very different from enterprise requirements. It's something we started pursuing as early as 2009 when we saw the iPhone effect on traffic. We've seen quite a bit of change since then with mobile carriers being cautious and aloof to Wi-Fi to now embracing Wi-Fi in a big way.

We see that across the board, globally, but it's particularly strong in Europe. In North America, you see AT&T embracing Wi-Fi very early. That is directly connected to the fact they had exclusive iPhone distribution. The iPhone alerted everyone to the fact that no matter what you do, there isn't enough spectrum to support the appetite for bandwidth.

I think that now Verizon is starting to warm up to it. We've seen them first wholesale the service from Boingo as a response to AT&T, to now publicly saying they are interested in Wi-Fi and are looking at offloading in highly populated locations like stadiums, city centers and so on.

Light Reading: How do wireless operators' Wi-Fi offload requirements differ from enterprises?

Lo: At the most high level, I think if you look at big enterprise networks, or the biggest university campus, we're talking about a couple of thousand access points, whereas for an operator, they're looking at having to manage tens of thousands to hundreds of thousands of access points. In terms of managing them historically they've been using enterprise Wi-Fi products, so they've adopted an architecture where each Wi-Fi is an island. They'll have a particular management system for a particular hotel group or airport or particular street location and so on, but I think now they're really looking at the architecture for the Wi-Fi network instead of standalone pockets of Wi-Fi.

A key thing they look at is scalability of management of all these access points. Historically, these guys use enterprise wireless-LAN controllers, and now they're rethinking that. But, they don’t have a lot of choices. At the campus level, they have enterprise controllers designed to manage a couple thousand access points per controller to the other end of the spectrum where they use big mobile operator core type of switches, like GGSN type of switches and routers. There needs to be something in the middle. If you look at the big GG routers and controllers, they weren’t really built for Wi-Fi capabilities. Those products were built for subscriber traffic management.

Next page: Dollars and Cents

Light Reading: Do subscribers expect Wi-Fi to be free, or will they pay for it?

Lo: I think the mentality for subscribers is that Wi-Fi is all-you-can-eat, and it's included as part of their subscription service. I don’t think they refuse to pay for Wi-Fi. For me, I chose AT&T because Wi-Fi is part of that package. There are lots of hotspots. But on top of that, I pay for a T-Mobile hotspot subscription, because it's at airports. They are willing to pay for it, but not on a per use basis.

Light Reading: How are wireless operators monetizing Wi-Fi offload?

Lo: What I'm seeing now is they are doing the AT&T model where they bundle Wi-Fi in to prevent churn on the service. Subscribers are paying for it by being willing to choose the service that offers Wi-Fi hotspot access. They're paying for it in that instead of going cheaper, they stick with an operator that offers it.

If you look at the AT&T decision to go usage-based, a lot of people accepted it because they know on Wi-Fi there's all-you-can-eat. Another example of how operators are using Wi-Fi is not looking directly at revenue, but to attract subscribers. The PCCW plan -- where one bundle is a prepaid 3G service with Wi-Fi all-you-can-eat -- that service is targeted at grooming the younger subscribers. If you are a teenager and your parents won't give you a 3G service, but what they'd do is you get your Christmas or birthday money to buy a prepaid card. Because they consume so much bandwidth, they're smart about using Wi-Fi whenever the signal is available. From a PCCW standpoint, that's how they groom the young users to use mobile data. So when they can afford to subscribe to a monthly service, they're more likely to go with PCCW than their competitors.

Light Reading: How much money can carriers save in going with Wi-Fi offload compared to other measures they use to ease congestion, such as updating their cellular infrastructure?

Lo: According to one of our customers [speaking about 18 months ago], in the high traffic locations, they see 20 percent of mobile traffic being offloaded to Wi-Fi. It's not across the board 20 percent but in key locations. In train stations and high traffic areas, it's probably more than 20 percent. It's not really how much money they're saving but looking at the cost of Wi-Fi versus more expensive cellular equipment.

It's more about the spectrum. That's the most expensive thing. Wi-Fi, because it uses unlicensed spectrum, it can free up spectrum for users on 3G services. Even when you talk about LTE, I think spectrum is never going to be unlimited as all devices are getting smarter. People are carrying more on the road. I have a laptop, iPad and iPhone, so you're seeing more and more devices. All the devices want a network connection. Three-fourths of iPads are Wi-Fi only. The carriers are looking at bundling programs. You're talking about basically lower and lower revenue on the cost per megabyte type of measurement. The carriers are getting less and less revenue. Their profit margin is dropping. Wi-Fi is no longer, how much revenue can it generate? It's more, how much money can they save with Wi-Fi?

Next page: Competition Off-net

Light Reading: Is there a battle brewing between femtocells and Wi-Fi, or are most of your customers using both?

Lo: If you look at the technologies, they are competitive in that you see both are being used by operators to address mobile data bandwidth issues. However, I think that at this point, operators are not looking at them as either/or. They are looking at them as, where can I deploy these small-cell solutions? We see Wi-Fi and femtocells converging. In the future, when operators have to install more small base stations and get more bandwidth from heterogeneous networks, we're seeing convergence in Wi-Fi and cellular technology in small cell base stations.

Outdoors in particular, the most expensive thing is not the base stations but the site acquisition, especially in outdoor municipal areas where operators need to rent light poles and get city approval. Making sure there is power and backhaul going there are the expensive items. When operators acquire a site, they'll want to put all the radios that are possible on that site. I see that certainly for them, if not for indoors, but outdoors, there's a trend of convergence.

Light Reading: Is Ruckus looking to be the sole Wi-Fi offload vendor for wireless operators, or is that not feasible in today's market?

Lo: Operators never choose a single vendor. They always at least have two for everything. They have historically just gone with the de facto wireless provider. Cisco has the market share for enterprise Wi-Fi. Operators historically choose Cisco, but they use Ruckus for some applications or Aruba for others. Cisco has an advantage, but that's changing very rapidly. Operators are now much more sophisticated at looking at what's the right architecture for Wi-Fi and for their small cell network. So, I think the operators are going to look at the best solution.

Next Page: Quality Concerns

Light Reading: Interference is typically the top concern for wireless carriers that are considering adding Wi-Fi to their service portfolio. How do you address these concerns?

Lo: Clearly, when operators implement small cells, they can no longer do RF planning for every single base station. On the femto side, you hear about self-organizing networks. That's the automatic interference management. On the Wi-Fi side, it's the same. Automatic interference management will become critical.

Beamforming is one technology, but it's the ability to do everything smarter, the ability to have your base station not cause interference for other base stations around you. That's oftentimes not talked about. They just talk about how your base station gets affected by others, but it's important when operators put them all over the place, they don’t want interference. They want to make sure users get a consistent experience. With so many smartphones around, you have devices interfering with one another. It's really much more complex than beamforming. It's the ability to support more users.

The way we do beamforming, we steer the signal to each user or transmitting client. We don’t generate signals and broadcast the signals all over the place. It's small things like that. Other traffic management includes the ability to steer users across different bands. If you support 2.4 and 5 Gigahertz, you don't want all devices on 2.4. Newer ones that support 5, you want the base station to automatically steer to use 5, which is more open. Things like load-balancing clients across multiple base stations. Those are all part of management traffic.

Light Reading: How do you optimize crowded RF spectrum for Wi-Fi offload?

Lo: One thing about unlicensed spectrum is anyone can put an AP [access point] on it. It's important for operators to do this traffic or interference management not just from a controller that issues commands to access points, but they need the access points themselves to deal with interference actively. That's where things like beamforming and smart antennas come in to play.

Light Reading: In the UK, there have been concerns raised that rainstorms and heatwaves will shrink Wi-Fi coverage and hurt the quality of service. Is this a big problem?

Lo: Rainstorms, heatwaves, all these things. In the UK, there's much more network planning, but you see in some other less-developed communities, people just hang whatever they want to hang outside. You have really horrible services; those devices are interfering with the rest of the network. Having automatic interference management is critical.

Next Page: Authenticating the Future Light Reading: How important is authentication and policy management for wireless operators using Wi-Fi offload?

Lo: Today, if you ask people the biggest reason they don’t use Wi-Fi, I doubt it’s a security concern. It's more of a pain because you have type in a password. I think that operators are all aware of that issue. Some of the things being worked out by Hotspot 2.0 and 802.11u is to allow automatic authentication and for operators to be able to advertise service to their subscribers only. We think that the industry is going to make authentication easier.

But in the end, I think there's one more step they need to take. If you look at the standpoint of a mobile operator, what they want is to use the same subscriber management system in the back to manage their Wi-Fi and cellular subscribers. Today, if you look at how Wi-Fi offload is being triggered, it is really all controlled by the user, not the operator. If I turn on Wi-Fi on my phone, a lot of phones will automatically go to Wi-Fi instead of cellular.

We saw Cablevision announcing TV on iPhones. You'll see more operators offering their own content on mobile phones. They would want their own video content to be routed through more either secure paths or paths where they can meter usage and offer better service and potentially other video traffic like YouTube and P2P. They'd rather that traffic get sent off-net as fast as possible. That kind of control requires the operator to control how to route traffic. Today, the user is the one that sets up their phones and decides on the network.

Today on Wi-Fi, if my traffic goes to Wi-Fi, the AT&T guys don’t see the traffic. It goes on to their fixed line network. It gets routed off-net or wherever it goes. I think eventually mobile operators want to see the traffic. Even though some of the traffic they want off-net as fast as possible or others they want to send to their own backbone, in the end they want to control that.

The reason they haven't gone out to every mobile operator to build out massive Wi-Fi networks, is they don’t know the right architecture yet. AT&T could easily have a million Wi-Fi locations. Even with their scale of 50,000 APs, they are not very quick installing Wi-Fi. At the end, there are a lot of architecture decisions to be made. We are today just seeing the beginning to see Wi-Fi offload.

Light Reading: What do you envision the market looking like in five years? 10 years?

Lo: Over the next five years, LTE will be widely deployed, Wi-Fi will be widely deployed, small cells like femtocells for 3G or 4G will be used as operators need to create more capacity. The key thing is, how do they use a single backend architecture -- their 3GPP packet core? How do they use the same core services -- QoS, subscriber management, DPI – to manage Wi-Fi and cellular and femto networks? That's where the operators are going.