WiFi: Building New Services

Wireless hotspots are on the rise throughout Europe, the US and now the Middle East. However, the full impact of wireless LANs on the service provider has yet to be seen.

  • E-Mail
By  Greg Wilson Published  March 9, 2003

|~||~||~|Wireless local area networks (WLAN), or WiFi technologies has received a lot of hype in the past twelve months, as hotspots have rollout across the marketplace. Concurrently, arguments have sprung up on the question of interoperability with existing and planned networks, and whether or not public access WiFi as a business proposition challenges or complements existing and planned networks. As the dialogue has developed, it has become clear that whatever the answer, both will co-exist. But whether they do so co-operatively or competitively remains to be seen. WiFi is a local area high speed broadband wireless technology that allows users within the range, or hotspot, network access at up to 11 M/bits/s. The range of the hotspot depends on issues such as line of sight, is anywhere between 100-600 feet, or 30-180 metres. Hotspots are proliferating in what Starbucks’ chairman Howard Schultz refers to as ‘the third place’ where people are not at home or at the office. In practice this means coffee shops, airports, hotels, railway stations, convention centres, and so forth. WiFi is based on the 802.11 standard, which has various versions identified by the trailing letter. The most commonly referenced are:

· 802.11b is the current predominant standard, operating in the 2.4GHz range, and offering up to 11 M/bits/s access speeds.
· 802.11a is the next version, which operates in the 5 GHz spectrum, and offers up to 54M/bits/s.
· 802.11g will ultimately deliver up to 54MbpS in the 2.4 GHz band, and will deliver other as yet undefined benefits.

In order to access the service, the user requires an 802.11 enabled laptop, using either a WiFi card, like a network card with an antenna, or on-board 802.11, which are increasingly be integrated into next generation notebooks, particularly with the introduction of Intel’s Centrino product set. Dell also recently announced it would make 802.11 standard in its range of Latitude notebooks.

Usually, access will be on a subscription basis, or via a pre-paid scratch card, or credit card account. Authentication is most often based on the RADIUS (Remote Authentication Dial-In User Service) standard, using a username and password. There are at present thousands of hotspots around the world, and these are increasing at a rate of knots. Aside from the often referenced hotels, cafes and convention centres, 802.11 is facilitating broadband access in many other locations, such as around phone booths in the UK and even an outdoor public plaza in Australia.
||**|||~||~||~|

The bandwidth deliverable is indeed impressive — with wired LAN speeds at 100M/bits/s even 10% of that is impressive on a wireless network. There are a number of limitations, however, that isolate and differentiate the technology from its wide area network competitors like UMTS — the European 3G system.

First of all, the theoretical speeds are compromised by the volume of users, and therefore do not represent a true picture of the product. It is likely, however, that WiFi will in general be significantly faster than UMTS. Second is static — most wide area mobile network standards are designed to function adequately on bullet trains, and therefore allow for in-motion operation. Third, it is a non-phone experience, and there is a requirement for significant user hardware that exceeds the requirements associated with UMTS. It is also, significantly, a very different experience. Fourth, WiFi operates in a noisy space that is less secure than the ‘conventional’ networks. Amongst other things, garage door controls and baby monitors in the US use the same frequencies. Fifth, the operational area of WiFi is very small, and does not represent a realistic proposition for wide area coverage.

It is important to note that WiFi is a widely available technology, with access points at this time well under the US$100 mark. Some households have personal live hotspots in their homes, leading to widespread adoption and acceptance of the technology. This will help to promulgate the public access network.

WiFi has the advantage of being first to market in terms of wireless broadband public access. In addition, its potential as a driver for the coming PC (or more specifically laptop) upgrade cycle has seen the aggressive entry of industry giants such as Intel and Dell in driving the technology forward. This impetus guarantees that WiFi will have a momentum that will not go quietly into the night. The innovators have come, and the early adopters are already on board. WiFi is crossing the proverbial chasm in early 2003, and will succeed or fail this year. So will it be successful?

Every major telecommunications company in the world has a WiFi strategy. At the extremes, some are monitoring its progress carefully, and some —like T-Mobile in the US — are rolling out so fast that they’re barely pausing for breath. In every major economy, hotspots are rolling out, site rights are being negotiated well in advance, and entrepreneurs are taking advantage of this early stage. In many cases, it’s a hedging of bets rather than a core long-term strategy. Whatever the motivation, the involvement of the carriers, both wireline and wireless, is hugely significant.

Almost every new laptop in 2003 will have 802.11 on board. Nokia and other switch vendors are preparing integrated solutions where WiFi can collaborate with and augment data networks. The infrastructure is getting cheaper and cheaper, driven to the lowest possible price point by larger companies (such as Intel and Cisco) with broader agendas. Hotspots will be concentrated in high volume, easy access locations, without the regulatory percentage coverage requirement. All of these factors will contribute to an availability and core user base that pre-equip WiFi for success as new wide area networks battle for the hearts and minds of consumers.

Having said that, integrated WiFi networks offer the best of both worlds. Users can access WiFi at the hotspot, UMTS (or another wide area 3G technology) outside the hotspot, have an always available data connection, with the benefits of hotspot access and the wide area network in one.
||**|||~||~||~|

Indeed, the early adoption of WiFi bodes well for the potential success of 3G, as these users will be presented with that technology as an upgrade rather than as a replacement. Similarly, efforts are underway throughout the world to upgrade GPRS offerings, using emerging technologies like SIM-based authentication, presenting an upgrade on GPRS, as opposed to the projection of 3G as an upgrade on WiFi. The interoperability of these two businesses as opposed to technologies presents an interesting challenge, one that will inevitably be shaped by consumers.

One of the most significant threats to the WiFi market is the stability of the entrepreneur group. With international markets suffering what can best be described as volatile fortunes, the availability of venture funding is limited, and the palatability for risk is low. Investors burned by the ISP sector are looking at the same problems again, and with potential exits limited, growth in the independent sector is restricted. That appears to have been circumvented as a potential barrier by the involvement of the wide area network operators, although larger companies, being more risk conscious and implicitly, therefore, less innovative. The widespread adoption of technology, while not yet inevitable, will drive this forward.

A significant point to make is that 3G networks are about much more than high speed broadband access on the laptop, which is, essentially, where WiFi takes a bow. 3G networks allow for significantly more voice traffic than existing networks, and in their mobility deliver opportunities for in-motion services with which WiFi cannot compete. This means that there will always be a massive market for wide area networks that WiFi does not compete with – voice is still king, and won’t be going anywhere soon.

Ultimately, however, users want services, not technologies, or networks. Users want to be able to access the internet seamlessly, transparently, wirelessly, quickly and anywhere at any time. They do not care whether it is WiFi, 3G, GPRS or UMTS.
||**|||~||~||~|
||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code