Wireless LANs stand to gain from 3G delays

By Darren Rea and Sara Sowah
EE Times UK
(05/07/02, 03:49:23 PM EDT)

Wireless LAN technology could become an unexpected beneficiary of the delayed rollout of 3G wireless services, such as the decision by J-Phone Communications in Japan to wait six months before starting its wideband-CDMA service, analysts said.

With telecommunications carriers increasingly desperate to recuperate the huge startup costs they spent at spectrum auctions, some industry observers believe wireless LANs could capitalize on the delayed rollout of 3G.

The introduction of the 802.11b wireless networking standard, or Wi-Fi, could make a sizable dent in the number of potential 3G subscribers.

Katrina Bond, industry analyst at Analysys, said: "Initially network coverage for 3G will be fairly limited; the devices will be in very short supply and will be quite costly. So we don't see significant numbers of 3G customers until 2004 and it will be predominantly business customers to begin with."

While the market holds its breath waiting for 3G to get its act together, the rollout of Wi-Fi access points alongside an established GPRS infrastructure could see customers utilize download speeds that put 3G to shame. This has led a number of industry watchers to predict that once 3G services are rolled out, they will be mainly used where there is no Wi-Fi coverage.

Roman Polz, head of the EMEA client systems group at Agere Systems, said: "In the short-term operators will probably use Wi-Fi before they introduce 3G, as it is a cheap enhancement and there are already about 20 000 Wi-Fi equipment owners out in the field."

Polz said he believes operators will roll out Wi-Fi to augment their 2.5G networks, and to gain experience with large data traffic. "The backbone is more than adequate to handle the amount of data that is expected," he said. "So it will increase the revenue per subscriber, increase profitability because the return on investment on Wi-Fi augmentation is pretty short around two years."

While there are currently a number of Wi-Fi hot spots or access points, these are in isolated areas such as inner cities and airports. In the future, mobile operators with a nationwide 2.5G infrastructure will probably add Wi-Fi services to their basestations in inner cities, Polz said.

Polz foresees the coexistence of 2.5/3G and Wi-Fi, and believes future portable devices will switch between services depending on which provides the strongest signal at a given moment.

"When I leave the office, my notebook, palm top or other portable device will recognize this and will automatically hand over to a packet service based on GPRS or 3G mobile phone connection," he said. "As I reach a hot spot I will be able to benefit from higher data rates thanks to the Wi-Fi service.

"Wi-Fi transmission rate is around 11 Mbit/second, whereas the 5-GHz [802.11a] systems are around 54 Mbit/second; but at 500 meters from the Wi-Fi point you are down to 1 Mbit/second."

Polz pointed out that there are lower data rates but better range with 3G. By using both together, a complete system will be available to ensure that users will always be connected. In that case, a 3G services will be used only when a Wi-Fi connection is not available.

"As the fundamental backbone is the one that is already there in the 2.5G network, the only infrastructure that is required is local access points, and field trials are already being undertaken around the globe," said Polz.

"There are already 20 million pieces of Wi-Fi equipment out in the field which means we are in a unique situation where operators can roll out the service without having to also roll out the client infrastructure."

To ensure the take up of future mobile technologies, analyst Bond said: "European operators need to communicate better what can actually be done with these new, faster networks. It is not necessary for them to communicate the network technology, more what that technology can do."