The wireless industry swallows the Wi-Fi pill

At this year’s Mobile World Congress, you would expect LTE to hog the spotlight, but LTE might find itself overshadowed by a far less sexy technology: Wi-Fi. As telecom vendors prep their new portfolios for the big Barcelona showcase in two weeks, there is a preponderance of Wi-Fi products in the mix. That could mean the world’s largest cellular network event will be dominated by a distinctly noncellular technology.

Alcatel-Lucent’s one-two punch

Alcatel-Lucent (s alu) is adding Wi-Fi to its new lightRadio small cell architecture, acknowledging that the small cell networks of the future won’t just be composed of miniature versions of the big macro cells looming from towers. They will also make use of cheap Wi-Fi access points using free unlicensed spectrum.

Rather than come out with its own line of dedicated access points, Alcatel-Lucent is incorporating Wi-Fi radios directly into lightRadio’s unique Cube design. The idea is for operators to deploy hybrid Wi-Fi and cellular networks as part of the same network, leaning on Wi-Fi to offload heavy volumes of Internet-bound traffic while using traditional 2G, 3G and 4G radios to provide the operator’s core voice and data connectivity. Alcatel-Lucent is incorporating the tech, which it simply calls lightRadio Wi-Fi, into the femtocell and metrocell configurations of lightRadio’s modular Cube architecture.

LightRadio is still a year or two away from commercial deployments, but in the interim Alcatel-Lucent is working with outside Wi-Fi vendors — so far unnamed — to incorporate their access points into its existing 3G and 4G networks. The Franco-American vendor’s service gateway will be the glue holding those components together, managing the disparate Wi-Fi and cellular connections as part of a single network. As customers pass between its Wi-Fi and cellular pools, the gateway recognizes and tracks them, eliminating the need for their devices to constantly log back into either data network.

Ericsson tying the knot with BelAir

Ericsson,(s eric) the world’s largest wireless infrastructure supplier, aims to break into Wi-Fi through acquisition. Last month, I reported that Ericsson is in the process of buying metro-Wi-Fi vendor BelAir Networks, and at MWC we may witness the official announcement.

BelAir will give Ericsson instant access to not only an outdoor high-performance Wi-Fi product line that can scale to hundreds of thousands of hotspots but also a hybrid small cell technology similar to lightRadio Wi-Fi.

While waiting for the final acquisition details to emerge, BelAir is continuing to build on its technology. Ahead of MWC, it announced enhancements to its GigXone platform to optimize it for its new role in the mobile data network. In particular, it is building buffering technologies to cut down on jitter and latency and video streams, filters that block out interference from nearby cellular radios, and beamforming techniques designed to boost its access points range and capacity.

Smaller vendors get in on the action

Cellular technology pioneer InterDigital (s idcc) has turned its attention to the next generation of Wi-Fi, exploring how the technology can be expanded into emerging unlicensed bands like the white spaces between TV broadcasts (that is, if Congress actually allows white spaces for unlicensed use). InterDigital is debuting a technology at MWC called Integrated Dynamic Spectrum Management (pdf), which detects and harvests unused spectrum in the white space bands and bonds them to regular Wi-Fi signals, creating an ultra-high-capacity connection between the device and the hotspot.

This week Stoke introduced a new “clientless” network gateway, which allows Wi-Fi network to identify subscribers by their operators and automatically connect authorized users, without requiring any specialized software on the device. That may sound like a small thing, but one of the biggest obstacles carriers face in embracing Wi-Fi is that there is no easy way to sort out which devices have permission to access their access points and which don’t.

Today operators get around that obstacle by requiring customers to log into their access points — which many subscribers aren’t willing to do — or by installing clients on their customers’ handsets that automatically recognize authorized hotspots and seamlessly link to them. The holy grail for carrier-grade Wi-Fi, though, is for hotspots to recognize devices by their SIM cards, just like cellular networks.

Are we on the verge of a mobile Wi-Fi revolution?

It depends on whom you ask. Cisco Systems (s csco) is very bullish on overall mobile data growth, but in the latest Visual Networking Index report, released on Tuesday, it heavily downplays the role of Wi-Fi in future networks. Cisco estimated that 11 percent of all mobile data traffic was offloaded onto Wi-Fi networks and private femtocells in 2011, which is significant, considering only a handful of global operators embraced Wi-Fi. But what is shocking is Cisco’s projecting that only 22 percent of that traffic will traverse Wi-Fi connections in 2016.

Cisco tends to be conservative with its numbers — for the past several years it has had to retroactively revise its data traffic estimates upward — but it seems to be particularly cautious on its Wi-Fi projections, assuming only lackluster support from operators for Wi-Fi. It is easy to get that impression today here in the U.S., since carriers like Verizon Wireless (s vz)(s vod) tend to dismiss Wi-Fi and even the operators that back the technology like AT&T (s T) haven’t exactly gone gangbusters with deployments.

But in other regions of the world operators are diving in whole hog. Japan’s KDDI is building a network of 100,000 access points, while French mobile upstart Free Mobile is churning up the competitive market in France with a cheap wireless service built on a 5 million residential hotspot backbone.

A lot of vendor activity around a new technology doesn’t necessarily reflect a strong operator demand (look at WiMAX), but in this case infrastructure suppliers probably aren’t generating meaningless buzz: They have little incentive to. If operators weren’t interested in Wi-Fi, vendors like Ericsson and Alcatel-Lucent wouldn’t get anywhere near the technology, because they stand to make little money from it. When it comes to selling network capacity, cellular technologies are a far more profitable enterprise.

My guess is that operators are applying enormous pressure on their vendors to integrate Wi-Fi in their networks and to do it quick. That is why MWC this year may look more like a Wi-Fi networking event than a cellular networking one.