Wi-Fi is suddenly the darling of the mobile industry.

Just a few years ago, Wi-Fi was viewed skeptically by many in mobile. 3G networks were positioned as ready and waiting for what has now become the smartphone revolution. Wi-Fi was only available in a handful of devices. The predominant opinion in the industry was that Wi-Fi would only serve to erode mobile revenues.

Today, there's a newfound respect for Wi-Fi in the mobile industry that is a result of several different trends.

Steve ShawFirst, consumer acceptance of Wi-Fi is very high. Nearly two-thirds of broadband-connected homes in the U.S. already have Wi-Fi. Enterprises large and small rely on Wi-Fi to provide a flexible, mobile work environment. Public locations now advertise free Wi-Fi access to entice consumers. It's clear people have easy access to the technology.

Next, Wi-Fi has become a "must have" feature on smartphones, and consequently, nearly every new smartphone ships with Wi-Fi.

The proliferation of Wi-Fi on smartphones is driven by a combination of things, including congestion on the outdoor networks. Smartphone users consume an incredible amount of data. If they can't get access to the Internet over cellular, subscribers are turning to Wi-Fi to fill in the gaps.

Also, 3G, particularly at higher frequency bands, has introduced in-building coverage challenges. Therefore, when people are at home or in the office (indoor locations where they spend large periods of time), the 3G networks have difficulty maintaining five bars of coverage, especially on overloaded networks.

Operators Embracing Basic Wi-Fi
Rather than letting users passively evolve their Wi-Fi usage, some operators see concrete benefit in actively moving smartphone traffic to Wi-Fi. By establishing usage and pricing programs, these operators are able to accelerate Wi-Fi connectivity with their smartphone user base.

AT&T, whose challenges with the iPhone have been widely documented, actively encourages subscribers to use Wi-Fi whenever and wherever possible. For the iPhone, AT&T introduced free Wi-Fi access on any of the company's public hot spots in popular locations, such as Starbucks and McDonalds.

To further encourage Wi-Fi usage, AT&T recently introduced tiered data pricing with caps. To encourage Wi-Fi offload, any data delivered over Wi-Fi does not count against the cap.

All indications show that subscribers are embracing Wi-Fi on their smartphones. A recent survey conducted by Zoomerang (sponsored by Kineto Wireless) found that an astonishing 43 percent of smartphone users with Wi-Fi use the technology every day.

For mobile operators, however, there is a down side to encouraging the use of basic Wi-Fi. While Wi-Fi can be used to give subscribers faster access to the Internet, it doesn't aid the performance of the mobile operator's most lucrative and valuable service: voice.

Voice and SMS typically account for 70-80 percent of a mobile operator's overall revenues. Yet Wi-Fi alone does nothing to improve cellular coverage, which is fundamentally tied to the subscriber's perception of the operator's mobile service.

Coverage continues to be a key reason for subscriber churn. Indoor performance, specifically for smartphone users, is exacerbated by in-building coverage and capacity challenges.

Mobile operators are looking for smarter Wi-Fi solutions which enable them to maximize the benefits of Wi-Fi.

Smarter Wi-Fi
There is a smarter way for mobile operators to leverage Wi-Fi. A smarter solution would actually use Wi-Fi to improve indoor coverage while offloading Internet traffic from the macro network.

In effect, Wi-Fi access points in the home or office would be turned into mini-cell towers, indoor extensions to an operator's mobile network. Thus, mobile operators would improve indoor coverage while gaining additional capacity from Wi-Fi.

A smarter Wi-Fi solution would provide a secure, trusted connection to smartphones over Wi-Fi so the operator's most valuable voice and SMS services can reach subscribers over any broadband network.

As a result, the mobile operator would have far more control of how their subscribers use Wi-Fi.

For subscribers, this smart Wi-Fi solution would result in dramatically improved indoor coverage, using the Wi-Fi which already exists in the home or office.

Plus, subscribers would continue to achieve high speed access to the mobile Internet using Wi-Fi.

If it sounds too good to be true, it's not. The technology has been standardized in the 3GPP's Release 6 specifications and is known as UMA/GAN. Commercial services based on the UMA/GAN specifications are available today.

T-Mobile's Wi-Fi Calling
T-Mobile re-launched its Wi-Fi Calling service in October 2010. Wi-Fi Calling is an application on Android smartphones which establishes a secure connection to T-Mobile's core network from any Wi-Fi access point anywhere in the world.

With Wi-Fi Calling, T-Mobile is using Wi-Fi to increase network capacity while improving indoor performance and coverage.

Wi-Fi Calling gives T-Mobile subscribers the ability to have "do it yourself" coverage. Connecting their Android smartphones to Wi-Fi in the home or office provides improved coverage where they spend most of their time.

Today, Wi-Fi Calling is available on T-Mobile's most popular smartphones, including the MyTouch 4G and the G2 by HTC, as well as the LG Optimus, Motorola Defy and phones from Research In Motion (RIM) and Nokia.

In the U.K., Orange has launched its Signal Boost service that uses existing Wi-Fi in the subscriber's location to boost his or her mobile signal. With a service that's available on Android and RIM handsets, Orange is delivering a low-cost solution for improving in-building coverage.

The boom of smartphones and the demand to be "always best connected" has driven subscribers to embrace Wi-Fi technology. In turn, mobile operators have become more accepting of Wi-Fi as a complementary technology to the 3G/macro network.

Today's basic Wi-Fi is just the first step in truly maximizing the return from Wi-Fi networks. Smart Wi-Fi solutions, such as T-Mobile's Wi-Fi Calling service, let mobile operators turn ordinary Wi-Fi access points into seamless extensions of the mobile network.

With Smart Wi-Fi, mobile operators provide their subscribers with the coverage and capacity they expect, from Wi-Fi access points that already exist in their homes and offices.

Steve Shaw is vice president, corporate marketing, at Kineto Wireless.