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Designing a Defense for Mobile Applications

The public WLAN scene is chaotic and, so far as billing revenues concerned, teeny-weeny. But the standards are coming together globally, and network providers are rolling out hotspots across the rich planet.

The punters are keen to pay for this service, according to a recent In-Stat survey of early adopters.

"Virtually all respondents were at least somewhat interested in using WLANs in public places, with 19% already using them and 33% extremely interested in utilizing them in the future."

Which is nice. But it still leaves the big problem: how to charge for mobile Internet through WLANs. Punters want seamless billing, mobile phone-style, just like when they go travelling abroad (although without the outrageous mark-ups for international roaming). They would also prefer flat fees for access - just like with broadband. We reckon that providers will be in little hurry to move to flat fee when the market is so young. Per minute charging is so much more profitable, after all.

However, the infrastructure providers want the same outcome as their customers. Seamless billing, seamless standards means much greater take-up.

But who will do the billing? A majority of early adopters want to pay for public WLAN through their mobile phone provider, which will be a welcome boost to the wireless networks, and a kick in the teeth for the landline telcos. The latter might gain a good revenue stream from public WLAN revenues, but it doesn't get to own the customer relationships.

So the mobile networks are best place to profit from public WLAN. This should push up ARPUs (average revenues per user), as In-Stat points out. Most early adopters are business users, and their companies will be willing to pay good money to squeeze out a few more drops of productivity from their employees on the move.

The mobile phone networks are having a tough time with 3G - the cost, the roll-out, the handsets - or lack of, the applications (ditto). Public WLAN will be a nice little earner. And who knows, a successful global WLAN network may encourage people to migrate some mobile data apps to 3G, some day. There will never be enough hotspots to approach the coverage of 3G. ®

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