Is WiFi Overshadowed by 3G

30th March , 2004

Europe : Until recently, the soaring popularity and sinking cost of WiFi has overshadowed 3G cellular wireless systems, but today service providers see the two technologies as being complementary, together forming a wider, more durable broadband wireless strategy, according to Infonetics Research’s latest study, Service Provider Plans for Public Wireless LAN Hotspot Services 2004.

The study is based on interviews conducted by senior analysts at Infonetics Research in January 2004 with fixed-line operators, mobile operators, and wireless ISPs in North America, Europe, and Asia Pacific to determine the strategies, technology requirements, and network implementation plans of service providers offering public wireless LAN services.

“Despite optimism about the technology and confidence in dual-capability wireless networks supporting both 3G and WiFi, service providers are still grappling with basic business questions, such as what the sources of revenue will be, how services will be priced and bundled, and how big the potential market is,” said Infonetics Research’s Richard Webb, lead analyst of the report. “No one is quite sure what the winning model is, and such basic uncertainty makes service providers cautious.”

Geographic Trends

The North American market has been the quickest to embrace public wireless LAN, with far more startup WISP activity than any other region
With some 5,000 hotspots currently operational, the Asia Pacific market is the second largest behind North America and is growing quickly
The bulk of the hotspot rollouts in Europe have been in Scandinavia and in Central Europe; there is far more evidence of fixed and mobile service provider activity vs. wireless ISPs and it is likely that they will come to dominate the European market
Study Findings
Revenue growth is the dominating challenge for 52% of respondents, followed by profitability with 48%
In contrast to many other telecom service areas, the public WLAN space is not (yet) dominated by the traditional large carriers and service providers
Many service providers are building hotspots in conjunction with enterprises, as well as selling hotspot services directly to the enterprise segment
The average number of hotspots will grow significantly over the next year, although the average number conceals the fact that small entrepreneurial companies often have only a handful, WISPs often have hundreds, and one or two market leaders may have thousands
Aggregators such as Boingo and iPASS continue to play an important role in the development of this market, by forming strategic partnerships with hundreds of hotspot providers, enabling users to roam across numerous hotspots in North America, EMEA, and Asia Pacific

Infonetics Research is an international market research and consulting firm covering the data networking and telecommunications industries in North America, Europe, and Asia. Infonetics helps companies develop, market, and sell products and services by providing objective analysis of end-users, service providers, and product manufacturers. Infonetics has offices in Silicon Valley, the Boston Metro Area, and London.

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