http://www.unstrung.com/document.asp?doc_id=25077&site=unstrung
Yankee's Hot Spot
11.27.02
The Yankee Group says that service revenues from worldwide public
wireless LAN (WLAN) access services will hit $1.63 billion in 2007.
However, the research firm does not see public WLAN services as a
viable standalone business, predicting instead that it will become an
adjunct to wireless carriers' existing cellular services (see US WLAN
Hits $1.63B in 2007).
"For most service providers, PWLAN [that's public wireless LAN access,
folks!] does not represent a viable, standalone business," says the
report's author Roberta Wiggins, wireless and mobile services director
at Yankee. "Carriers are well positioned for this space by providing
both hotspot access and WAN/WLAN integrated service to their subscriber
base. They can offset deployment costs by leveraging existing
investments in the core network, billing systems, customer database,
and network management. WLAN is complementary to 2.5G and 3G WAN
technologies when used for wireless data services in local hotspot
areas."
Wiggins says that adding WLAN services to their portfolios should
provide carriers with an additional revenue source and give them
another way to service treasured business customers. However, she
thinks that what a carrier can bill for WLAN public access services
will represent a small portion of their overall revenue.
"It won't be big enough to build a standalone business on," she says.
This could be bad news for companies that are currently trying to do
just that, like Boingo Wireless Inc. and Joltage Networks.
Even some of the biggest players in the U.S. WLAN access market
couldn't operate unless they had other sources of revenue. Wayport
Inc., she says, is a big player in wirelessly enabling hotels and
airports, but they still make most of their money from their wireline
dial-up services.
Wiggins predicts there will be 5.36 million users of PWLAN services by
2007. She reckons that the pricing model will tend towards a flat-rate
monthly fee, like that offered by T-Mobile USA. In contrast, she
expects there will be per megabyte pricing plans offered in Europe.
Wiggins is expecting that more carriers will get involved in WLAN
services before 2007. "AT&T is testing out there� but they're being
very cautious," she says. AT&T Wireless Services Inc. (NYSE: AWE -
message board) has been linked in the past to "Project Rainbow" -- the
plan to put WLAN hotspots all over the U.S. (see WLAN USA?).
Verizon Communications Inc. (NYSE: VZ - message board) has also just
announced plans to help corporate customers with installing WLAN
systems in their offices. We asked the carrier if it planned to follow
this up with a hot spot service. A spokesperson for the company told us
it's looking at public access service but she says that Verizon is
worried about the security of such systems and wants to work those
issues out before it starts a public WLAN service.
Of course, even if all these systems are launched, in some ways it is
questionable how much any carrier will be able to charge for wireless
LAN access. Another recent report from Frost & Sullivan says there will
be so much competition in the WLAN equipment market that it will worth
less in 2009 than it is now (see WLAN Will Eat Itself).
There are already plenty of volunteer groups working to wirelessly
enable public spaces for free; for instance NYC Wireless is working to
make Bryant Park a node on its free network. As equipment prices fall,
more and more cafes and stores are likely to buy WLAN kit to offer
access as a perk, not a privilege.
So perhaps a big question for carriers is how to enter this market with
services that offer significant additional extras over the "freenets"
that will allow them to charge more. The trouble is, the kind of
infrastructure that would support such services -- the ability to offer
one-stop billing, additional security, and the ability to roam onto
wide area networks -- is probably a few years away from being
commonplace. And as we have seen with the Internet, people get used to
accessing stuff for free, even if it does have its flaws.
� Dan Jones, Senior Editor, Unstrung
--
NYCwireless - http://www.nycwireless.net/
Un/Subscribe: http://lists.nycwireless.net/mailman/listinfo/nycwireless/
Archives: http://lists.nycwireless.net/pipermail/nycwireless/
