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WiFi hotspots pose threat to US 3G – US Bancorp

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ComputerWire: IT Industry Intelligence

The success in the US of public wireless local area network (PWLAN) "hotspot" services is causing a rethink among wireless network operators, which are beginning to see hotspot growth as another reason to delay the roll-out of 3G services.

According to "The Wireless LAN Report, 802.11 - Disruptive Technology", a new report from US Bancorp Piper Jaffray, the unforeseen popularity of PWLAN services could further dilute already weak latent demand for 3G.

Samuel May, US Bancorp's senior wireless equipment analyst, believes that a number of trends have emerged that lend credence to the view that PWLAN, despite being an "on-the-pause" rather than "on-the-move" technology, has the potential to derail established plans for 3G. In particular, he noted, PC manufacturers are now beginning to offer 802.11b WiFi support as standard in some business class laptops, and have even bundled service agreements with hotspot operators such as Wayport Inc, with some models.

The hotspot operators themselves are also sharpening their marketing focus, paying closer attention to the needs of corporate subscribers, and users from specific vertical markets. Faced with these trends, wireless network operators are being forced to reassess the relative merits of WiFi and 3G technology, and some are drawing the inevitable conclusion that WiFi hotspot services offer lower start-up costs, while also appearing to offer a better prospect of an immediate return on this lower investment.

According to May, with most US operators' 3G plans already pushed to the back burner because of the state of the telecoms industry in general, there is a real opportunity for PWLAN to flourish and establish a toehold in the market that 3G may find hard to break.

"A fast rise in hotspots, networks serving specific vertical markets ranging from the consumer to the corporate side of the business, represents and inflection point, the second phase of WLAN adoption," May said.

© ComputerWire

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