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Visiongain: 'Is WLAN a threat to 3G?' asks visiongain's newly published
PWLAN Report
October 30, 2002
visiongain's latest report Public WLAN Forecasts 2003 - 2008, examines
key issues related to the latest developments in the WLAN area with
3G.
In general, WLANs are an inexpensive way to cover small areas with
high data rates. This contrasts with 3G, which has a greater range,
making it more effective at covering larger areas.
For example, a cell station that a wireless carrier installs in
an airport, for instance, could run about $50,000 for hardware and
connections, not including the cost of the license for airwave space.
In a public WLAN network, though it covers only a fraction of the
area of a cell tower (approximately 100m radius), installation can
be as cheap as $1,000 and WLAN modems for laptops are already selling
for less than $100. Thus, WLANs are able to provide inexpensive
coverage for high data rates in urban hot spots. In contrast, 3G
is better for providing a nationwide network, where the predominant
need is for voice and low-rate data.
PWLAN has a timely availabilty compared to 3G. As most estimates
do not put 3G commercial availability until late 2003 or 2004 at
the earliest.
Even when 3G becomes widely available, it is questionable that
they will be of any real use to business travellers, as data rates
of these systems will remain significantly lower than those that
business users have become accustomed to in their place of work.
Additionally, public WLAN provides the user with something approaching
familiar desktop experience, and the ability to connect up and download
files and information directly onto a machine with the capability
to process the information.
Some analysts have highlighted that public WLAN, coupled with 2.5G
solutions, could provide a convincing alternative to 3G, since such
a roll-out would cost much less than 3G and provide end users with
data rates at least 10 times higher. It would also simplify integration
with the WLAN systems that are being deployed in the office and
the home. 'If this were to happen it would have massive implications
for the whole telecoms industry, not least the operators, some of
which have paid billions of Euros to acquire 3G licenses.' says
Nic Byrne report analyst.
There are warnings that public WLANs could severely damage 3G revenues
if service providers succeed in finding a solution for users to
move from one hotspot to another. Roaming, which has made GSM so
popular around the world, is a technically challenging yet crucial
link, that is still missing in WLAN.
"The dynamic, chaotic growth that we experienced with the Internet
is happening in the public WLAN space," said Maximilian Ardelt,
the former CEO of Munich mobile operator O2. "If I were a mobile
operator sitting on a pile of debt because of 3G, I would be very
concerned about this development."
The UMTS Forum forecasts that revenue from non-voice 3G services
will reach $70 billion by 2006. However, industry analysts question
this prediction, and estimates that by 2006, many consumers will
be using WLAN data networks instead - resulting in a 12% erosion
of forecast 3G data revenue. Other industry experts provide similar
figures of revenue erosion lying between 7% and 10%. However, industry
analysts see these relatively conservative estimates as the best-case
scenario: they believe that the worst-case scenario could result
in revenue erosion of up to 64%.US$ billions)
There is a growing business need to access existing business applications
seamlessly.
With the increasing availability in public spaces, wireless LAN
equipment and service markets are poised for significant growth,
but by how much.
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3G Motorola A920
