News
Issue #2002 - 47 (December 2002)
(Updated Dec. 22, 2002)

INFRASTRUCTURE, PRODUCTS & SERVICES

Gartner Advises Enterprises to Deploy WLANs

Gartner recommends that enterprises can safely deploy WLAN for mobile workers; any remaining security and interoperability problems will be resolved during 2003. Enterprises should ensure that any new equipment purchased complies (or can be upgraded to comply) with emerging Wi-Fi-certified interoperability and security standards, such as WPA in 2003 and 802.11i in 2004. Enterprises should plan for continuing interoperability problems between Bluetooth devices from different manufacturers, and should educate employees about the risk posed by unsecured Bluetooth communications between phones, PDAs, and notebook and desktop computers. 

Analysis
Wireless LAN (WLAN) interface cards and access points have become commodities, and WLAN hot spots targeted at business users are proliferating in North America, Europe, and technologically advanced Asia/Pacific countries. Large, financially stable telecommunications operators (telcos) are displacing wireless startups as infrastructure owners. With simple precautions and an eye on emerging security standards, enterprises can now safely and productively adopt WLAN for mobile workers and executives. 

Millions of recent upmarket mobile phones and thousands of recently announced personal digital assistants (PDAs) include Bluetooth as standard. These devices are already present in the enterprise, but configuring and securing the connections between these devices are often in the hands of individual employees with no IT or security training. More often than not, these devices remain unconfigured (and therefore unused) or unsecured (and therefore a data security risk). 

Prediction
Wired telcos will make the wireless hot-spot business succeed in 2003. 

If 2001 was the year of startup hot-spot operators, and 2002 has seen the entrance of remote access specialists and a handful of mobile carriers, then 2003 will be the year of fixed telco operators in WLAN hot-spot deployment. 

In North America and Asia/Pacific, established telcos were slow to recognize the market opportunity for national WLAN hot-spot networks, and much of the initial activity was driven by entrepreneurial, independent wireless startups. In Europe, the telcos were the first to jump on the bandwagon. Their interest was driven by their fear of losing potential third-generation revenue, as well as by a need to generate new revenue streams. Carriers such as Telia and Sonera already provide WLAN access services in more than 300 Scandinavian locations. Despite this early enthusiasm, the business case has proved to be more complex and challenging for the telcos than they originally had foreseen. More recently, traditional telcos have started entering the hot-spot market, with BT Retail in the United Kingdom being the first to announce a service, followed recently by Telstra in Australia and SingTel in Singapore. In South Korea, state-owned Korea Telecom claims it will roll out more than 15,000 hot spots during 2003. 

Telco operators will dominate new public-access WLAN infrastructure rollout in Europe and Asia/Pacific during 2003 and, despite competition, will control 70 percent of installed hot spots in 2005 (0.7 probability). 

Impact on 2003
Mobile operators and wireline carriers benefit from a strong corporate presence, which makes the hot-spot market an obvious focus. These telcos have a few advantages over independent wireless hot-spot operators. Their knowledge of virtual private network (VPN) solutions, expertise in cost-effectively deploying the back-haul network, and the ability to combine billing for multiple services makes them better positioned to succeed in this arena. Hot-spot ownership gives the fixed-line carrier an opportunity to expand into wireless and mobile services, and the mobile operator the opportunity to offer a wider range of services, as both leverage their large customer base. Fixed-line carriers and mobile operators typically own back-haul infrastructure and billing systems, which puts them at a cost advantage compared to the independent WLAN hot-spot operator, which must buy those services from a telco. 

Reacting in 2003
Gartner believes that the key to success for telcos is for them to open up their traditional business models to include new parties in the value chain, such as landowners. Telcos, in fact, will not be in the position to locate and deploy hot spots on their own and will have to consider different options like revenue sharing with landowners, offering advertising space on a Web page that appears before the WLAN login screen, and making deals to provide back-haul access to landowners' own WLAN equipment. Independent operators should resell carriers' WLAN offering, rather than building an infrastructure of their own to limit their capital and operational expenditure. 

Enterprise customers should be aware that telcos will be able to offer WLAN as part of a bundle of fixed and mobile services, and should factor this in when negotiating contracts. Local and global roaming will remain an issue during 2003, as WLAN aggregators like GRIC, iPass, and Yellow Spot find it difficult to monetize a small but growing customer base. Telcos that are considering billing and roaming systems based on subscriber identity module (SIM) cards and dual WLAN/general packet radio service wireless cards should note that WLAN will be built into many laptops, with no ability to store or read a SIM card. Instead, all hot-spot operators should support a credit-card-based casual access model. 

Source: Gartner
For more information: http://www.gartner.com

MobileInfo Comments and Advisory: We generally agree with Gartner's advice. See our news item on WiFi prospects.

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