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Surviving in a tough market: recommendations for profitable WLAN carrier services.

Article Excerpt
The last two years have been filled with considerable excitement over the potential of wireless LANs (WLANs) and the enthusiasm continues into 2004. The debate as to whether WLANs will complement or cannibalize 3G networks hasn't let up. Several prominent analysts have labeled 802.11 as a disruptive technology, even though it has been around for a while, and forecasted negative revenue implications for planned 3G business models.

Clearly WLAN technology is at a turning point in its adoption and a number of factors are conspiring to bring this about. The increasing penetration of DSL, cable, and fiber into the home is providing sufficient fixed-line bandwidth to take advantage of the theoretical 11 Mbps maximum Wi-Fi can offer. At this point, 802.11 has emerged as the clearly dominant standard. Major OEMs are incorporating embedded Wi-Fi into their product lines. Intel's WLAN marketing chest is clearly helping to create consumer awareness and interest. The low marginal costs and high marginal benefits of the technology are stimulating vital growth. And there is a very real and explicit consumer demand for 802.11. It's a value proposition that offers the consumer 20 times more than anything promised by a 3G network, and it can bridge the last 100' gap to the nearest fiber ring or switching exchange. QUALCOMM, Nokia, Motorola, Symbol, and others have announced plans for cellular/WLAN-integrated chipsets.

In spite of all the benefits and potential, telecom executives are not much closer to nailing down a business case for Wi-Fi, but they are beginning to understand that they must start making their moves now. Almost all carriers are involved in offering some sort of Wi-Fi service--doing either their own implementations of hotspots or selective hotspot implementations. Still, the majority of their coverage is through partners like Wayport or Boingo, and we are finding similar trends in Europe and Asia as well.

Carriers who are focusing on survival in a tough market or are looking for ways to improve falling average revenue per unit (ARPU) need to evaluate and integrate a Wi-Fi strategy that complements their wireless WAN (WWAN) offering. The focus here is on the business side. Where does WLAN fit into the market strategy of commercial carriers? How should carriers focus on improving the profitability of Wi-Fi services? This article sifts through the pros and cons of short-term and long-term WLAN strategy and examines some options that carriers may want to consider to prevent customer turnover and gain a competitive edge to generate new sources of revenue, especially in the lucrative enterprise market. Whether you are a carrier, a wireless Internet service provider (WISP), or an enterprise providing or using wireless data services, an in-depth perspective on WLAN trends will help you determine the option that best fits your company.

This article includes several recommendations for carriers that could be useful for planning WLAN strategy. But first, why should a carrier consider WLAN as part of their service strategy?

Why WLAN?

What should...

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