Wireless LANs will complete with 3G - report

date: March 21, 2002

The deployment of WLANs, and more specifically 802.11 networks, is becoming widespread and could threaten 3G in the near future. The benefits of increased productivity through mobility is encouraging many SMEs, corporations and institutions to install wireless access to their existing fixed Ethernet network. Public WLANs are emerging into the mainstream, offering wireless internet access in airports, coffee shops and hotels at speed of 11Mbps, more than 10 times that promised by 3G networks which have yet to come online.

3G by Stealth - 802.11 Wireless LANs, a report by ARCchart sets out the competitive landscape and analyses the direction the 802.11 standard and its applications will take, as well as demonstrating the implications for competitive technologies such as 3G.

Matt Lewis, a Senior Analyst at ARCchart stated despite what the mobile operators are saying, WLANs are not a complementary technology to 3G. They are competitive and this effect will be augmented as the rapid deployment of public WLANs continues.

By 2006, usage of WLANs instead of 3G networks for wireless data will erode 12 percent of forecast 3G revenue. This represents a best case scenario for the mobile operators. If 802.11 support appears in handsets, ARCchart estimates erosion will be as high as 64 percent.

The cost of public wireless LAN access will tend to zero as the penetration of WLAN-enabled devices rises. As more customers enter commercial businesses (hotels, airports, cafés, shopping malls etc.) carrying 802.11-enabled devices, proprietors will be incentivised to offer free WLAN access for use as a marketing and customer relations tool. WLAN "black spots" will be penalised. ARCchart estimates that proprietors can turn their premises into a WLAN hotspot for as little as $185 per month per 2Mbps.

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