Cellular Operators Embrace Wi-Fi

US : Best positioned to leverage their existing customer base, cellular operators are embracing Wi-Fi technology and are poised to grab market share away from independent hotspot service providers, asserts technology research firm Allied Business Intelligence (ABI). Cellular operators across the globe are implementing Wi-Fi technology in calculated moves to simultaneously test the Wi-Fi waters, while thwarting the mounting pressures from the independents. From Maxis in Malaysia to Swisscom in Switzerland, cellular operators or their parent companies currently control thousands of hotspots globally.

"Incumbent cellular operators are quick to recognize the complementary nature of the technology, and are willing to take this comparably low-cost gamble and install a network of hotspots," says ABI analyst Kenil Vora, referring to the deployment costs of a Wi-Fi network over that of cellular.

What may portend the future for companies in the Wi-Fi space is "location, location, location," not unlike that for many other businesses. Some of the independent hotspot providers, including Boingo, Wayport and FatPort, have secured arrangements for many key locations, including airports, hotels and other high-traffic areas-thwarting the rising pressure from cellular operators, with over 1 billion subscribers globally.

However, the disruptive nature of Wi-Fi technology is challenging the importance of location in many respects. Verizon Wireless, through parent Verizon Communications, currently offers hotspot access at roughly 150 locations in Manhattan at payphones-many within range of T-Mobile's hotspots at Starbucks locations. "What we're witnessing in Manhattan, for example, is two cellular operators simultaneously competing on multiple fronts. Verizon has shattered the previous notions of a location's value," adds Tim Shelton, ABI Director of Wireless Research. "ABI anticipates that Wi-Fi will continue to alter the landscape for wireless data and how subscribers will consume it. The exact extent, however, changes almost daily."

Research on hotspots and other operator offerings is available through ABI's Wireless Operators Subscription Service. The information service examines the approaches adopted by major global operators and provides a realistic outlook on where the industry is headed. Deployment projections for WCDMA, CDMA2000, EDGE, MMS, and Wi-Fi technologies, as adopted by the various operators, are also covered by the service.