Laptop and PDA users in these "Wi-Fi hotspots" will benefit from wireless broadband internet access. The company indicated that a successful Ireland launch will be followed by a roll-out of the services in the UK – where it would compete with BT, T-mobile and independent operators such as Megabeam and Netario – and other territories.
Interest in public WLANs based on Wi-Fi technology is growing. For wireless carriers like O2, its emergence represents both opportunity and threat. According to analysts at the Yankee Group in the US, that's because, when integrated with wireless WAN (i.e., 2.5G/3G networks), Wi-Fi:
Complements carriers' service portfolios,
Provides an additional revenue source, and
Enables closer relationships with premium business customers.
The Yankee Group predicts in a report released yesterday that the North American public WLAN market will generate $1.63 billion in annual service revenues by 2007. It expects that business users will account for the vast majority (86%) of the anticipated 4.6 million regular public WLAN users.
According to report author Roberta Wiggins, Wireless/Mobile Services director:
"For most service providers, [public WLAN] does not represent a viable stand-alone business. Carriers are well positioned for this space by providing both hotspot access and WAN/WLAN integrated service to their subscriber base. They can offset deployment costs by leveraging existing investments in the core network, billing systems, customer database and network management. WLAN is complementary to 2.5G and 3G WAN technologies when used for wireless data services in local hotspot areas. But WLAN is more about portability than mobility."
The study, entitled "Public Wi-Fi LAN Threat Becomes Wireless Carrier Opportunity", concludes that these complementary and competitive scenarios are both valid reasons for market entry.
However, the Yankee Group forecasts that the revenue opportunity represents a relatively small percentage of total carrier revenues. And, while WLAN (where available) will be a faster and more reliable solution for more remote access requirements, it predicts "long-term cannibalisation of traffic from 3G to PWLAN systems will be minimal."
