At least one major research firm finally noticed that wireless local area networks should not be ignored. Well, market research does take time to be compiled.

by ISP-Planet Staff [September 17, 2001]

According to research by Frost & Sullivan, MobileStar is one of the principal forces driving demand in the U.S. market. Due in large part to its relationship with Starbucks coffee houses, MobileStar aims to implement around 8,000 sites by the end of 2003.

In Europe, Telia and Sonera are at the forefront of introducing business travelers to the next generation of wireless mobile productivity, having already installed a couple of hundred hotspots across Scandinavia between them.

Frost & Sullivan issued an upbeat forecast this week detailing wireless access point installations in Europe. Although the market is only just coming out of its infancy and expected to constitute a business service, hotspots will also deliver an enhanced consumer experience as cost for high-speed Wireless LAN (often referred to as Wi-Fi) and Bluetooth-enabled devices plummet and the technology becomes readily available.

Wi-Fi big-time
Wide-scale deployment of wireless-enabled devices and the continued proliferation of 802.11b, the wireless Ethernet standard, in offices and homes, will help the market soar to new heights. Frost & Sullivan points to the rising productivity of the mobile workforce, and the massive potential of public access sites (including airports, transport hubs, hotels and high street outlets) as further contributory growth factors.

The study pegs revenues for public wireless access in Europe at $4.12 million in 2001, forecast to leap to $3.06 billion in 2006. However, these encouraging growth expectations are not deemed spectacular amongst the mobile network operator community, which is currently crippled by the exorbitant 3G network costs and license fees.

The study warns that the fast rollout of wireless LAN access points, which allow the user to connect wireless-enabled laptops or PDAs to the Internet at speeds of up to 11Mbps, will detract from 3G operators' mobile data revenues in the future.

Game plan
According to Jan ten Sythoff, Frost & Sullivan program manager, many of the mobile network operators in Europe are in a current state of evaluation.

"They are contemplating their next strategic move in this climate of uncertainty, limited resources and the ongoing struggle to boost wireless data services. Some players are taking an early lead, while others may choose to concentrate on the cellular business, and perhaps embark on an acquisition or partnership drive," he reports.

"Enabling cellular service subscribers to have access to voice and data while on the move is the key to competitive advantage. Consequently, competition between mobile operators and other service providers is hotting up. Mobile operators who do not implement these public access services risk losing highly profitable subscribers, either to other rival operators or other service providers," ten Sythoff continues.

However, it is not only the revenue opportunity—or threat—which makes the technology interesting. Public wireless access will be integrated into cellular services, offering high-speed wireless data services today. This provides mobile operators with the savvy required to reposition themselves successfully in an effort to recoup their investment in 3G.

Frost & Sullivan's research also found that commercial property owners (for example in the hospitality industry) can gain an edge in the market by differentiating their product offerings, generating stronger profit streams, foster stronger customer intimacy and capitalize on highly localized advertising and commerce revenues.

"Although the market is, overall, very promising, it also faces a number of challenges, first and foremost the varying degrees of regulatory forces currently covering the 2.4 GHz and/or 5 GHz band across Western European countries. These regulations will hamper development of public access services in nations with tight regulations, while countries with no regulations at all clearly offer a more open playing field," ten Sythoff says.

When in roam?
Additionally, ten Sythoff points out that the issue of roaming is also of extreme importance in the wireless public access marketplace. "As increasing numbers of agreements are reached between different service providers, the service becomes exponentially more attractive to users seeking to access the network across a broader spread of geographical locations. However, there is no agreed international roaming standard, and for roaming to work, billing systems must be interoperable and service providers must be sure of their partners' ability to offer a similar quality of service as their subscriber is used to," he concludes.

Frost & Sullivan's study also discusses the implications of the development of wireless public network access on mobile network operators. It specifically looks at the advantages and disadvantages of offering these services as well as analyzing the situation of different mobile operator types, such as Greenfield, cellular-only and fixed and mobile operators.

—End