News

Study touts WLAN as key to 3G mobile

• By John K. Waters
• August 5, 2002

The proliferation of Wireless LANs (WLANs) will add $2.8 billion to the so-called third generation (3G) mobile data market by 2005, complementing rather than threatening the future of that market, concluded UMTS Forum in a report dubbed ''Impact & Opportunity: Public Wireless LANs and 3G Business Revenues.''

The UMTS report, released last week, concluded that the two technologies are evolving as ''complementary technologies that will together strengthen a total mobile data services portfolio.'' The report shows that, although the direct impact on forecast 3G mobile intranet revenues is likely to be less than one percent of total 3G revenues in 2005, new implementations of WLANs will stimulate the overall mobile data services market, including demand for 3G services.

UMTS (Universal Mobile Telecommunications System) is one of the major new 3G mobile communications systems being developed within the framework defined by the International Telecommunications Union. The UMTS Forum is an open, international body that promotes the ''global uptake'' of 3G mobile systems and services.

Interest in WLAN technology spiked this year, as several firms, including Hewlett Packard, disclosed plans to make big investments in the concept of WLAN ''hot spots.'' HP's initiative aims to provide high-speed wireless access points in large, public areas, such as airports, hotels and restaurants. The company plans to sell customized bundles that include wireless access points and back-end services for subscriptions and billing, company representatives said.

Such moves prompted the UMTS Forum study of public WLAN and its potential impact on predicted business 3G service revenue for mobile intranet. The resulting report concluded 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 traveling at high speeds, whereas WLAN requires users to be essentially stationary, thus making it semi-mobile access, the report concluded.

Bernd Eylert, chairman of the UMTS Forum, predicted that Public WLAN will be used by almost 20% of 3G business users in 2005 and add $2.8 billion in 2005 to the market for 3G mobile data, but will not replace 3G services. It could, however, become an additional source of ''competitive differentiation.''

''The WLAN service providers are fulfilling a niche,'' Eylert wrote in the report, ''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.''

He also warned that the WLAN ''actually poses a potential risk to 3G operators that choose not to participate in this market.''

The UMTS Forum has previously forecast that total worldwide 3G services revenue will reach $320 billion by 2010.