STRATEGY ANALYTICS: PUBLIC WLAN MARKET CRITICAL FOR MOBILE OPERATORS - Failure to Deliver Puts US$21B Cellular Revenues at Risk

Boston, MA & London, UK -August 2, 2002 "Wireless LANs: Strategies for Mobile Operators", a new report from Strategy Analytics warns that revenues from public WLAN services will remain a relatively small percentage of the overall mobile market. However, operators risk losing their top business customers if they do not find a way of incorporating WLAN services into their product portfolio, an opportunity cost in excess of US$21 billion.

"The public WLAN industry is approaching the next stage in its evolution where there will be a consolidation of specialist Wireless LAN service providers into one or two major players or WLAN roaming blocks," said Phil Kendall a Director in the Global Wireless Practice at Strategy Analytics. He adds, "This phase of the industry's development will also be accompanied by the addition of WLAN services to the product portfolio of the majority of major cellular network operators, producing an ideal complement of wide-area connectivity and focused high-speed traffic hotspot coverage."

David Kerr, VP of the Global Wireless Practice at Strategy Analytics, noted, "The WLAN business model in many of the locations of multi-site installation deals - coffee shops, restaurant chains - is debatable due to less opportunity/time and, critically, need for the average customer to carry out a WLAN session. Transport and travel locations, rather than leisure, offering both high public foot traffic and user idle-time will become the focus of attention for WLAN hotspot installers and these, typically large and individually-owned, will take longer to set up than multi-site deals."

Strategy Analytics estimates that public WLAN revenues in W. Europe, N. America and Asia will increase from US$20 million in 2002 to US$2 billion in 2007.