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Ericsson CMO says Wi-Fi hotspots' days are numbered

'The telephone boxes of the broadband era'

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HSPA in the laptop

Since most broadband data applications are not used while fully mobile, but in a nomadic way – wherever the user chooses to sit down – the laptop is currently the key driver of HSPA usage, as it was for Wi-Fi and will be for WiMAX. As 3G and HSPA are increasingly embedded in the notebook, Wi-Fi becomes less relevant. Ericsson itself is working on embedded HSPA with PC makers like Lenovo, and Qualcomm threw down its most serious gauntlet yet to Intel with the launch of Gobi, an embedded product that can be configured in software to work with W-CDMA or CDMA2000 (and other networks in future) in different frequencies, and regardless of specific operator. This takes 3G a major step towards the carrier-agnostic, universal access dream that Wi-Fi was chasing.

Embedded 3G has been a key step on the way to making cellular networks a genuinely viable option for the all-important business traveller market, the one on which Wi-Fi laptops made their fortune (even if the operators found it hard to make profit on a data-only model). Unlike them, cellcos, however much pressure their traditional businesses may be under, do have the advantage of brand awareness, still-lucrative voice revenues and multiple service bundling options to cushion the blow of having to grasp the nettle of flat rate pricing and reduced roaming fees.

However, their next move will have to be to make roaming even cheaper and easier, and to introduce hotspot-style casual use mechanisms, so that 3G laptop owners are not restricted in their choice of network, or faced with exorbitant charges every time they log onto another carrier's system. There is a long way to go, but operators like T-Mobile in Germany and Carphone Warehouse in the UK have already experimented with subsidizing laptops in the same way they do phones, and AT&T is one of the cellcos talking up plans for prepaid data plans and SIM cards, and hourly access rates, for non -customers in future.

Hope for Wi-Fi

Not that we should write off public Wi-Fi too hastily. While HSPA may be coming into its own, in many regions and user groups it will remain unavailable or expensive, and Wi-Fi will fill the gap for many years to come. According to the latest twice-yearly report from enterprise broadband access firm iPass, which covers hotspot and enterprise 3G usage, the business uptake of Wi -Fi hotspots is still booming. The report found that use of hotspots among business people increased by 89 per cent in the second half of 2007, compared to the same period in 2006. IPass said that its survey is based on data gathered from over two million sessions during the six-month period.

Its findings saw European growth rapidly outpacing that in the US, with Europe expanding its worldwide share of hotspot use to 40 per cent, up from 31 per cent, as the US dropped from 59 per cent to 51 per cent. London extended its lead as the world capital of Wi-Fi with usage rising by 156 per cent over the same period, and an average session length of 72 minutes. Latin America saw hotspot usage leaping by 133 per cent year-on-year, with Brazil entering the top 10 list after trebling its Wi-Fi usage. Among cities, Singapore was second after London, followed by Tokyo and New York. Business travel locations such as airports, hotels and railway stations, predictably, continued to dominate use. Monthly usage increased steadily throughout the year, growing from an average of 152Mb per user in the first quarter of 2007 to 190Mb in the fourth quarter.

Copyright © 2008, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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