As the dialogue has developed, it has become clear that whatever
the answer, both will co-exist; that they may do so co-operatively
or competitively remains to be seen.
WiFi explained
WiFi is a local area high speed broadband wireless technology
that allows users within the range, or hotspot, network access at
up to 11 Megabits per second. The range of the hotspot, depending
on issues such as line of sight, is anywhere between 100-600
feet.
It is proliferating in what Starbucks' Chairman Howard Schultz
refers to as "the third place", where people are not at home and
not at the office. 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 11MbpS access speeds;
- 802.11a is the next version, which operates in the 5GHz
spectrum, and offers up to 54MbpS; and
- 802.11g will ultimately deliver up to 54MbpS in the 2.4GHz
band, and will deliver other as yet undefined benefits.
In order to access the service, a user requires an 802.11
enabled laptop or PDA, using either a WiFi card, like a network
card with an antenna, or on-board 802.11 that is beginning to
proliferate (for example, Dell recently announced that all laptops
in its Latitude range will come with 802.11 as standard).
Usually, access will be on a subscription basis, or via a
prepaid 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 100MbpS, even 10% of that is impressive on a wireless
network. There are a number of limitations, however, that isolate
and differentiate the technology from, particularly, its wide area
network competitors like UMTS (Universal Mobile Telecommunications
Service), a 3G service offering transmission of data at up to 2
MbpS.
The theoretical speeds are compromised by 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, it 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 $100
mark. Many householders now have personal live hotspots in their
homes, leading to widespread adoption and acceptance of the
technology. This helps 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.
Will WiFi 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 in particular 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.
3G
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, and fast, anywhere at any time. They
want services that make their lives better or easier.
They want to be able to communicate with home, with the office,
and with other people. However, they do not care about WiFi, or 3G,
or GPRS, or UMTS. Nor do they care about bits or bytes, but rather
they care about movies and conversations.
All of the technologies and networks have their advantages and
disadvantages. Each will contribute to the deployment and
availability of these products and services, and telecommunications
companies will sell and profit from these products and
services.
Professionals in this market all too often tend to get lost in
the jargon, and lose perspective on the bigger picture. People will
pay to make their lives better, and to make their jobs better. In
this context, we should examine the development of next generation
networks, products and services, and ensure the delivery of what
people want.
This article was contributed by Anthony Behan, Founder and
VP of Business Development, Am-Beo. See: www.am-beo.com
Am-Beo is an exhibitor at Billing Systems 2003, 13th – 16th May
2003 at Earls Court Conference & Exhibition Centre, London.
