Wireless 'hotspots' may outpace 3G

Ever dreamed of being able to log on to the Net at the airport? You will be able to soon, writes Jamie Smyth.

Ever dreamed of being able to log on to the Net at the airport? You will be able to soon, writes Jamie Smyth.

Hooking up to the Web or corporate networks from remote locations such as hotel lobbies, coffee shops or airports is big business in the US and Britain.

And finally it is set to become big news in the Republic, following the introduction this week of public Wireless Local Area Networks (WLAN) by telecoms companies.

WLAN, commonly called "wireless hotspots" in Europe, use radio technologies called 802.11b or 802.11a to provide secure, reliable wireless connectivity. The networks can be used to connect PCs to the internet, to each other, or to wired corporate networks.

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Each "hotspot" has a limited range of only about 100 metres, but on the plus side it provides extremely fast internet connectivity, currently up to 30 times faster than a fixed dial-up modem.

Unlike standard mobile phone technologies, WLANs operate in the unlicensed 2.4 and 5 GHz radio bands.

Therefore firms do not have to pay for the right to use the spectrum to offer services and, in theory, should be able to offer cheap services to consumers.

In the US, where a far larger percentage of the population owns laptops, big coffee chains such as Starbucks have teamed up with wireless firms to offer customers Web access at low cost.

The trend has also taken off in Britain where British Telecom has already set up more than 80 wireless hotspots. At last, Irish firms are jumping on the bandwagon.

O2, which is anxious to create additional revenue streams for its mobile business, launched its service this week. And the fixed- line firms, Eircom and Esat BT, which view WLAN as an opportunity to build a mobile presence, are gearing up to provide services.

But while all the telecoms companies may have slightly different motivations for pushing WLANs, they all agree on who they want to sell their services to: the affluent mobile business user.

"The typical hotspot target for us is a sizeable hotel or a public access point for travel such as a seaport or airport," says Mr Gerry McQuaid, commercial director with mobile phone operator O2.

Business users will be able to use O2's WLAN service, which has been branded "wireless zone", to help them stay connected when they are on the move, says Mr McQuaid. This could be in a train station or in a hotel room, he says.

O2 is the first big Irish firm to unveil its WLAN strategy. It has signed exclusive deals with 11 hotels and Heuston train station which will enable people, with WLAN compatible laptops, to log into the Net at these locations.

O2 is also talking with developers about installing WLAN nodes in certain exclusive apartments, says Mr McQuaid, who negotiates revenue share deals with the locations.

Right now, in Ireland, WLAN compatibility is not widespread. This year, about 50 per cent of laptops sold in the US will be compatible but it will probably take some time for Ireland to match that.

However, you can buy a data card to use as a modem, enabling existing laptops to work with the new system.

O2 is recommending Nokia D211 Data Card, which also is interoperable with general packet radio service (GPRS) technology. This would enable users to stay connected using O2's mobile phone network when they leave a WLAN area.

Users can either subscribe to O2's "wireless zone" service using a pay monthly option or buy once-off vouchers that will be available at the WLAN locations. It will cost €2 to €3 for each 20-minute session on the internet.

In comparison, Esat BT's pay-as-you-go Wi-Fi service, which is branded "BT Openzone", costs €10 per hour for its new service at Dún Laoghaire ferry terminal.

So will it take off? The US consultancy Gartner certainly seems to think so. It describes WLAN as the "story of the decade" and is predicting that there will be 89,000 public network access points and more than 99 million WLAN users worldwide by 2006.

Undoubtedly the big advantage of WLAN is the very fast connection speed and capacity for downloading large files. The most common WLAN networks uses the 802.11b standard which has an impressive throughout speed of 11 megabytes per second. This is much faster than the current standard mobility technology-general packet radio system "GPRS" - which runs at a measly 56 kilobytes per second, and is still much faster than the third-generation mobile phone technology, which will be launched late this year.

Strong promotion by the giants of the technology industry, which believe WLAN could provide a vital ingredient towards recovery, may also help adoption. Last October, Intel presented plans to invest $150 million (€138.5 million) in firms developing WLAN technology. It said the investment was an effort to accelerate wireless network deployment globally, and other big names such as Cisco, Dell and 3Com are also pushing WLAN.

Perhaps the one initial drawback with WLAN will be the high cost of public services. "I don't think at this price point it will drive mass consumer adoption," says Mr Donagh Healy, partner in communications at Accenture. "I think you will see WLANs first being set up and used by firms."

But the cost of using public WLAN will fall as more competitors enter the market, he says.

"It was the same of DSL when it was launched and now the prices have fallen," said Mr Healy, who believes some firms may offer WLAN access to drive loyalty.

This week the Chester Beatty library in Dublin began offering public visitors free WLAN internet access. Other innovative schemes are sure to follow in the public and private sectors.

One question taking up a lot of management time at Europe's mobile firms is WLAN's effect on third-generation mobile technology.

Fixed-line companies including British Telecom, Eircom and Esat BT have seized on WLAN as a way to get back into the mobile space. And many believe the technology will undermine the uptake of 3G.

"WLAN offers us a way back into mobile and we can use our fixed infrastructure such as DSL or leased lines to link with it," says Mr Seán Loughman, head of innovation at Eircom. "And WLAN will absolutely hit 3G.

"I think people want to be wireless but stationary. They want to be able to sit down and work or download large files," says Mr Loughman, who believes this can be done using WLAN rather than 3G. "I think O2 has realised this and is pursuing WLAN as a complementary strategy but other European firms are running scared."

Vodafone, which spent tens of billions of euro acquiring mobile phone licences across Europe, not surprisingly disagrees with this.

"We believe the business model for public WLAN has yet to be established, particularly in relation to multiple providers and unregulated frequencies," says a Vodafone spokeswoman. "We view it \ as a complementary technology to mobile services and will continue to assess its viability and value."

Either way WLAN will provide more choice for users and may put pressure on 3G pricing. Within years it is likely that many consumers will be able to hook up to the internet free of charge.