Wi-Fi still a winner

Wi-Fi is a technology that came to prominence some five or six years ago just as a consumer application for wireless connectivity to the internet. Today the focus has shifted to newer, more robust technologies such as 3G and WiMAX, raising questions for the continued need for Wi-Fi as a connectivity solution.

The business case for Wi-Fi technology in the face of WiMAX needs justifying, not least because of Wi-Fi's reliance on ADSL backhaul, and the enhanced reach of WiMAX networks.

The UAE's incumbent telacommunications company Etisalat is clearly an advocate for the long-term relevance of Wi-Fi having launched over 230 i-Zone Wi-Fi hotspots in the country since July 2005. Etisalat claims that the number of hotspots is rising on a daily basis across the region, and not just in the UAE.

"The hospitality sector and major coffee shops have driven this service since its introduction, and we are endeavouring to expand our network further to cover all public places in UAE," Omar Al Muzakki, director of product marketing at Etisalat, told CommsMEA.

Al Muzakki states that retail establishments have been a major driver of Wi-Fi hotspots across the globe, and that Etisalat is looking to emulate this trend in the UAE by deploying access points in the outlets of various power-retailers in the country.

"A Wi-Fi hotspot service can help enhance visitor footfall and convenience for a company's own staff teams," Al Muzakki explains.

Despite some predictions of head-to-head competition between Wi-Fi and WiMAX many industry players see the two technologies as complementing each other, particularly in emerging markets such as those found in Middle East and Africa.

Al Muzakki suggests WiMAX and Wi-Fi will coexist in the near future and that the two technologies will become increasingly complementary in their use and application.

"WiMAX, typically, is not a replacement for Wi-Fi, rather it complements it by extending its reach and providing a ‘Wi-Fi like' user experience across a larger geographical area," he said.

"Wi-Fi technology was designed and optimised for Local Area Networks (LAN), whereas WiMAX was designed and optimised for Metropolitan Area Networks (MAN)," he added.

Al Muzakki cites a 2005 study from research company Pyramid Research that predicts the number of Wi-Fi users in the Middle East and Africa would grow from 1.1 million in 2006 to approximately 2.8 million in 2009.

Gilles Delente, chief operating officer of Wificom, a global supplier to the wireless services industry, claims that vendors are the chief protagonists in the global push for wireless technologies, and that Wi-Fi remains one of the technologies that continues to be marketed.

"Vendors have driven the wireless market, as they are often looking to increase sales revenues by bringing new products to the market with enhanced features. This is playing a significant role in the development of both Wi-Fi and WiMAX technologies," he says.

Delente highlights Intel's WiMAX-compatible Intel Centrino (Wi-Fi) chipset as a prime example of the trend, and claims the chipset will reach mass-market penetration within three years.

"End-users expect multimedia services on the go, and both the IT and consumer electronics industries have responded accordingly by bringing the products to market that can facilitate this," stated Delente.

"There is a clear demand in the region but the wireless market is somewhat stunted by network operators mulling over whether or not investing in Wi-Fi is a sound move," he asserted.

The hesitation on the part of operators does not necessarily signal the demise of Wi-Fi, Delente suggested. "Some people say that it is a little bit late in the day for WiMAX technology to have a major impact on the market, and this leads me to believe that Wi-Fi connectivity will be a viable option for operators for at least another three years."

Regulation, as always, is likely to have a role to play in the further development of the of Wi-Fi and other similar technologies. "There are a number of problems facing companies looking to use WiMAX technology. First of all there is the high level of market regulation in this region, which is delaying the deployment of wireless technology," explained Delente.

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Opportunities do clearly exist for Wi-Fi hotspot deployments in the region. In Kuwait, Delente's Wificom has been partnering with wireless service provider Smartlink to supply Wataniya Telecom subscribers with Wi-Fi hotspot solutions in the enterprise and government sector since April 2006.Delente believes Kuwait has one of the most advanced Wi-Fi infrastructures in the region.

Etisalat's Al Muzakki believes the main drivers behind the growth in the number of Wi-Fi hotspot in the region has been the growing emphasis placed on internet access in the corporate sector, as well as the falling prices for portable Wi-Fi enabled devices.

"The restrictions imposed by the international standards organisations means the maximum output by a Wi-Fi device is 100 milliwatts, resulting in the range being very limited. This means that Wi-Fi is absolutely restricted to the last 100 metres for connectivity," states Steve Higgins, CEO of Purple Patch Wireless, a Wi-Fi deployment specialist.

Federico Membrillera, a partner at business consulting firm Delta Partners, states: "Wi-Fi is a technology that works well in its current usage. But it would take a huge amount of hotspots to offer connectivity over a large area - literally thousands - and WiMAX has that extra reach," he said.

"Although WiMAX has a farther reach, Wi-Fi does have the advantage of having a greater number of compatible CPEs on the market at present and it allows for a faster deployment of connectivity within a very small area," he added.

Purple Patch Wireless' Higgins believes that market forces are set to ramp up demand for public wireless hotspots in the Mean's the hospitality and business sectors continue to perform strongly.

"In 2004/2005 there was massive growth in the UK for Wi-Fi hotspots, as hoteliers and coffee shop owners realised that they were losing business to those venues that were offering such services," Higgins recalled.

The comparatively low entry costs for businesses looking to turn their venues into Wi-Fi hotspots helped drive the proliferation of hotspots in the UK, with the average coffee shop being able to offer wireless broadband access to customers with an investment as small as US$300. The costs of deploying a wireless network in larger scale venues such as hotels, however, can see cost rising to as much as US$40,000.

Intriguingly Higgins and Delta Partner's Membrillera disagree on Wi-Fi's business case. "The only (short-range) wireless technology that is profitable at this point in time is Wi-Fi," claimed Higgins. "Although its growth was initially slow, all Wi-Fi hotspot operators are generally in a good position across the global market at present."

Membrillera, on the other hand, maintains that there are very few successful Wi-Fi operators in the region and across the globe. He further highlighted that Wi-Fi technology will always require an access point to link backwards to the backhaul, which limits its reach. And although both Wi-Fi and WiMAX are touted as being interoperable technologies, Membrillera asserts that future developments could see one usurp the other.

"I do not think that WiMAX will kill off Wi-Fi in the market, it is too early to predict. I do think that with the proliferation of PCMCIA cards, end-users will be able to connect to the internet without the use of Wi-Fi in the near future," he claims.

Membrillera also points out that most players offering Wi-Fi access are fixed-line operators with an interest in the hotspot business as a means of shoring up revenues from customers who do not require mobility.

"In Bahrain, Batelco is offering hotspot services using Wi-Fi in areas such as airports on a prepaid basis and there are often small but dedicated business units within the overall operations of a telco to oversee the Wi-Fi business," Membrillera said.

"However, it is difficult to say how much hotspot revenues contribute to the overall revenue of operators in the MEA region," he added. Membrillera also pointed out that many hotspot users are now using cellular networks such as EDGE and 3G for their connectivity needs.