90% of Global Broadband Households to Have Service Provider Wi-Fi by 2019

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The percentage of global households with Wi-Fi home gateways or routers supplied by their service providers will rise from 66 percent in 2014 to nearly 90 percent in 2019. Wi-Fi has become an increasingly important strategic element for Internet service providers (ISPs) and many of their customers rely on their home wireless network for everything from email and social networking to streaming high-quality over-the-top (OTT) video.

“Wi-Fi and Internet have come to mean the same thing to most consumers,” said John Kendall, senior analyst, IHS Technology. “In the past, a home network was a relatively simple proposition: connect your PC, your laptop, and maybe a printer to a wired modem or a retail router, with the PC as the main control point. However, today many households have multiple smartphones, TVs, tablets, streaming OTT boxes, and even pay-TV set-top boxes. All of them depend on home Wi-Fi networks to access media content, which places a serious burden on the broadband gateway.”

The number of connected devices per household continues to rise, driving the need for more connectivity. In North America alone, there will be nearly 13 connected devices per broadband household in 2019, compared to just 10 devices in 2014. The proliferation of connected devices runs parallel to heavy ISP infrastructure investments designed to provide higher bandwidth speed and the budget to market it to subscribers and prospects.

The rising number of devices can cause significant bandwidth congestion and quality-of-service issues with streaming video. Additionally, Wi-Fi has had to compete on wireless spectrum with other home wireless devices, including cordless phones and microwave ovens, which have caused signal degradation. “In the past the bandwidth bottleneck has occurred in the last mile, but more recently it has shifted to the home Wi-Fi network, as these devices primarily consume content over Wi-Fi,” Kendall said.

“The sheer number of devices using Wi-Fi is forcing ISPs to take ownership of the home network,” Kendall said. “It does a service provider little good to provide gigabit or even a 100 megabit-per-second service tier, if the home Wi-Fi network cannot accommodate that higher level of service. Since most devices in the home are connected wirelessly, consumers increasingly judge their ISP’s performance, and the value of their subscription, according to the quality of Wi-Fi throughput.”

Operators are turning to the Institute of Electrical and Electronics Engineers Standards Association’s (IEEE-SA’s) 802.11ac standard to solve these problems. Dual band 802.11ac allows for Wi-Fi operation on the 5 gigahertz (GHz) band, which does not face interference from other household appliances. Additionally, the specification will incorporate multi-user, multi-input and multi-output technology in the second half of 2015, allowing for concurrent Wi-Fi streams to multiple devices, which again doubles the theoretical Wi-Fi throughput. “The 802.11ac specification, along with ISP requirements to embrace advanced Wi-Fi solutions, presents a very strong industry opportunity—from chipset vendors to suppliers of broadband customer premises equipment (CPE),” Kendall said.

Broadband CPE with 802.11ac Wi-Fi, including gateways, routers, and multimedia home gateways with integrated modems, will be installed in more than 70 percent of global broadband households by 2019. While 2014 was the first year 802.11ac was widely adopted, there will be more than 88 million 802.11ac unit shipments this year—nearly doubling again in 2016. Revenue from 802.11ac equipment is expected to grow from $1.5 billion in 2014 to greater than $10 billion in 2017.

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