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3G Complemented by WLAN Not Threateneddate: July 30, 2002 The UMTS Forum today published a new report that predicts global Wireless LAN (WLANs) solutions will add $2.8 billion to the 3G mobile data market by 2005. 'Impact & Opportunity: Public Wireless LANs and 3G Business Revenues', which explores the perceived impact the technology will have on projected UMTS/3G business revenues, finds 3G and WLAN to be complementary rather than competitive technologies that will together strengthen a total mobile data services portfolio. It shows that whilst the direct impact on forecast 3G mobile intranet revenues is likely to be less than 1% of total 3G revenues in 2005, WLAN will stimulate the overall mobile data services market and demand for 3G services - benefiting all industry players. Interest in WLAN, technology providing users with wireless un-tethered access to the Internet and corporate networks, has continued to grow throughout 2002. It appeals because it meets a specific user need and is available today at a reasonable cost. This has led to industry debate about the impact of WLAN on predicted service provider revenue for 3G. However uptake of WLAN has occurred despite the existence of competing standards, security and privacy concerns. These developments resulted in The UMTS Forum's study of public WLAN and potential impact on predicted business 3G service revenue for mobile intranet. The study highlighted that 3G, when compared to WLAN, offered more than mobile access to the Internet because of its richer portfolio of capabilities. In addition 3G is available to users travelling at high speeds whereas WLAN requires users to be essentially stationary, thus making it semi-mobile access. The study also considered how user occupation provides insight to user demand. Mobile executives travel frequently and spend time in public locations, such as airports, where public WLAN hot spots can be located. Their needs are portable as they conduct more intensive work in different locations whilst remaining stationary. In contrast field sales and engineering service workers are likely to work in their homes or vehicles outside of non-public areas and public WLAN 'hot spots'. Comparatively 3G provides extensive coverage allowing the user geographical flexibility. Users can also roam from one operator's network to that of another operator. The WLAN technology is less flexible because the dominant WLAN WiFi standard (802.11b) provides nomadic access only, depending on availability in multi-locations. Although it does allow for roaming across access points within the same Ethernet network (intra-network roaming), the standard does not define an inter-or cross-network roaming protocol. WiFi also shares spectrum with other devices, including household devices such as microwaves, and as deployment and usage increases, the spectrum will become increasingly crowded. Dr. Bernd Eylert, chairman of The UMTS Forum, commented: "Whilst WLAN services will not substitute 3G services, they could be an additional source of competitive differentiation. The WLAN service providers are fulfilling a niche and initial WLAN business users are foreseen to be early adopters of wireless Internet services. WLAN provides an opportunity to both expand market size and competitive position and could become an essential component to every global or national mobile operator's service portfolio. This actually poses a potential risk to 3G operators that choose not to participate in this market. Public WLAN will be used by almost 20% of 3G business users in 2005, and although the technology will add $2.8 billion in 2005 to the market for 3G mobile data, it is not a substitute for 3G mobile intranet nor any other 3G mobile service, as WLAN-mobility is limited. The UMTS Forum has previously forecast that total worldwide 3G expected service revenue is predicted to be $320 billion by 2010).
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