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Operators falling short of ambitious Wi-Fi roll-out plans

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Operators are in risk of failing to deliver on over-ambitious public Wi-Fi access business plans.

According to Ross Pow, Managing Director of telecoms consultancy Analysys Research, some over-ambitious Public WLAN roll-out plans could fall short by as much as 50 per cent.

"Hot spot deployment is accelerating but not as fast as operators say. Issues like divergence in pricing, brand building and doubts about where WLANs fit into the overall picture for service providers are creating problems in the market. The industry needs to meet its promises," he said.

"Wide area networking building is more complex than it appears," he added.

Such doubts have prompted Analysys to peg back projections for Wi-Fi market growth. In March, it forecast the Wi-Fi services market would be worth $5.5 billion by 2007 ($2.64 billion in Western Europe and just under $2.8 billion in the USA). Last week, Pow predicted the market would be worth only $2 billion in the US and $2 billion in Western Europe by 2007. No overall market figure was available.

Analysys previously estimated the number of hotspots would grow from 1,400 in 2002 to 30 000 in Western Europe and from 3,400 to 27,000 in the US by 2007. These figures remain largely unchanged with a Analysys prediction of between 25-30,000 hotspots in both Europe and the US by 2007. So Analysys' fear about sluggish roll-out is mainly a short-term concern.

In the US, businesses are more familiar with wireless LAN technology than in Europe. For this reason, the consumer marketplace for Wi-Fi services is expected to be more relatively important in Europe than in the US.

"There's wide variation in consumer pricing for Wi-Fi access. Overall pricing still high and this can be off-putting for consumers," said Pow. "Branding, pricing and promotion still have a long way to go."

He characterises the present market as fragmented. Like many analysts, Analysys expects to see a period of consolidation in the market over the next five years with existing service providers likely to emerge as dominant players in the market in the medium term.

Analysys' revised projection for the wireless LAN market came during a presentation at last week's Wireless LAN Event in Olympia, London. ®

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