Hotspots fodder for telcos says expert

By PETER GRIFFIN

The major telco providers will inherit the emerging market for wireless "hotspots" as wireless web surfers demand the level of coverage and service cellular networks have delivered.

This is according to Dr Mario Davoli, a Melbourne-based electrical engineer working as a technology strategist for Ericsson.

Governments, he says, will also have to impose controls on the unregulated 2.4GHz spectrum as more hotspot services compete for the same airspace.

Davoli said wireless local area networks (WLANs) allowing people to access the internet at high-speeds from laptops and handheld computers had sprung up relatively cheaply, but their operators were going bust or becoming the acquisition targets of the major telcos.

Alone, the enthusiastic start-ups that had developed the wireless hotspots market would struggle to develop national roaming and billing agreements - two ingredients essential to the success of WLANs.

"So far the hotspots that have popped up have been fragmented. If there is no cohesive roaming agreements between them, they will fizz out," said Davoli, who is working with the Australian Government's Foresight working group identifying emerging technologies.

Hotspot subscribers would have to be able to access the web in an airport lounge in one city and jump onto another hotspot operator's network at a cafe in a city elsewhere for the services to take off.

Telcos were becoming interested in WLAN as a revenue spinner complementing their mobile data networks and looking at technology that would allow subscribers to use both with the one access device.

Ericsson was making dual-mode mobile infrastructure that handled billing as customers switched between mobile and WLAN. Norwegian operator Telenor was an early customer, said Davoli.

Auckland hotspot operator RoamAD says it needs the marketing muscle and distribution of a major telco to make its business plan work.

Neither TelstraClear nor Telecom would comment on their discussions with RoamAD.

Vodafone's director of business, Russell Stanners, was unaware of any discussions with RoamAD, but the Vodafone group worldwide was already eyeing up the hotspots market.

Stanners pointed to a trial in Italy with Vodafone-owned operator Omnitel, where dual-mode Nokia wireless cards allowed users to switch between the GPRS network and WLANs.

The Nokia D211 wireless card, already selling in some regions for around US$330 ($708), allowed connections over 802.11b networks as well as GPRS and GSM mobile networks. The D211 came with a SIM card slot built in so that all the billing could be handled on one account.

"Many of the GPRS cards now support WLAN, so we can offer the potential to do billing, security and authentication," said Stanners.

The differing strengths of cellular networks and WLANs meant Vodafone would not undermine its mobile data business by moving into WLAN services, he said.

In Australia, struggling hotspot operator SkyNet Global has been acquired by Telstra. As a SkyNet Global client, Davoli said, he could connect to the internet wirelessly in Qantas lounges at the casual rate of A20c a minute.

But that involved paying yet another internet provider and coverage was limited.

"One thing we've learned is that wireless networks need widespread coverage. Without it you just can't get that critical mass."

Ericsson

Nokia D211