Public WLAN Services Have Role to Play in Europe, but Threat to 3G Has Been Overstated

date: July 1, 2002

Public access wireless LAN (PWLAN) services will not dramatically change the European telecommunications landscape, and the threat that this emerging "hotspot" technology poses to the 3G business case has been grossly overstated. These are among the most important conclusions from a Yankee Group Report, "Public Access WLAN in Europe: A Technology in Search of a Business Case?"

"WLAN technology is now relatively mature, and has already been widely deployed in European enterprises," said Declan Lonergan, director of European wireless research and consulting.

He added, "What is not mature, however, is the public access WLAN service environment. Some fundamental challenges remain to be resolved before we can start to see significant growth in user numbers. The key technical obstacles relate to service roaming, security, and billing. Perhaps more fundamentally, however, are the challenges emanating from the uncertainty surrounding PWLAN service models, and the service provider business case. Despite these concerns, we do see a future for PWLAN in Europe. We are projecting annual revenues of $1.8 billion from European PWLAN services by 2007, with 7.7 million active users of the technology. We do not, however, see PWLAN solutions cannibalizing 3G revenues to any significant degree. The differences that exist in the core value propositions offered by these two technologies should lead to the introduction of complementary, rather than competing, services. For this reason, we would encourage Europe's mobile operators to grasp the PWLAN opportunity immediately, and to leverage their formidable position of strength in mobile services and customer ownership, to secure a dominant role in the provision of PWLAN services."

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