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After all, no one got into the mobile phone business for the purpose of limiting demand. It should be good news that booming smartphone, tablet, and e-reader sales are causing data traffic to skyrocket. But many operators are nervous. While 4G wireless offers higher speeds, it is expensive to build and operate (requiring backhaul and core network upgrades), and operators worry that they will run out of capacity. The biggest mobile operators are imposing usage caps on their basic data plans.
Flexibility and New Uses
As subscribers continue to snap up multimedia gadgets, mobile operators are expected to offload their heaviest traffic to Wi-Fi networks. Standards (known variously as Hotspot 2.0, 802.11u, and Passpoint) have been developed to enable seamless roaming between cellular and Wi-Fi. Once the standards are widely implemented local hotspot owners will be able to serve mobile operators' subscribers, and mobile operators will be able to purchase Wi-Fi capacity as needed from hotspot owners. Adding thousands or even millions of Wi-Fi hotspots to mobile operators' networks is just one example of radio network virtualization.
Mobile phone operators also need new and more flexible ways of packaging and selling their services. The traditional one-phone-per-subscriber model will be replaced by a multiple-devices-per-subscriber model. However, subscribers with multiple devices will want more control over their spending. Virtualizing the provisioning and billing systems will lead to more choices and greater flexibility. It will also create new business opportunities. Today, you can buy a health app for your smartphone. Tomorrow, your doctor will sell you a package consisting of wearable sensors, a smartphone pre-loaded with specific mobile health apps, and services such as 24-hour per day monitoring.
Another form of virtualization is occurring with the help of wireless in the home. Believing that home entertainment systems would inevitably be connected to the Internet, entrepreneurs searched for an application that would get things moving. Now, a compelling application has presented itself. Customers have discovered that they can reduce or eliminate their monthly cable TV bills by connecting their televisions to the Internet. Devices such as the (wireless) Roku streaming player let users access the vast free, pay-per-view, and subscription-based content available on the Web. (continued...)