The massive hype surrounding Wi-Fi has forced the rest of the nation’s wireless carriers to follow T-Mobile USA Inc.’s lead or risk being left behind. But in the dust cloud blown up by such haste, it’s hard to distinguish one player from the next.
“I bet you’re going to see the wireless carriers providing (Wi-Fi) for you,” said Ron Gerber, chief executive officer of Angelbeat. “I think that’s a major trend.”
“You certainly can’t use it as a way to separate yourself from your competition,” said Jeff Rickard, a senior analyst of wireless services for advisory firm Current Analysis.
Indeed, last week Verizon Wireless joined AT&T Wireless Services Inc. and Sprint PCS in reselling the same 650 hot spots provided by the same company-Wayport Inc. The wireless local area network provider seems to be one of the few companies that has managed to come out on top in the WLAN craze.
Under Verizon Wireless’ deal with Wayport, the carrier will offer a daily unlimited access plan for $7 and a monthly unlimited access plan for $35 with charges billed directly to a customer’s existing wireless bill. Verizon Wireless earlier this year announced its intent to work with Wayport. Verizon Wireless also said it would sell software from Smith Micro Software Inc. that will allow laptop users to connect to either Verizon’s CDMA 1xRTT network or its hot-spot network.
Interestingly, Verizon Wireless’ parent, Verizon Communications Inc., recently announced plans to build out a Wi-Fi network in New York, but the offer does not extend out to Verizon Wireless’ customers. A Verizon Wireless spokeswoman said the carrier plans to sign additional WLAN roaming deals beyond its agreement with Wayport.
An almost identical situation played out between Wayport and one of Cingular Wireless’ parents, SBC Communications Inc., last week. SBC announced a roaming agreement with Wayport, as well as plans to deploy more than 20,000 of its own Wi-Fi hot spots in 6,000 venues during the next three years. Although SBC’s roaming agreement with Wayport does not extend to Cingular Wireless customers, Cingular will enter the Wi-Fi race soon. SBC said it will offer wireless services that “allow roaming between home and office LANs, Wi-Fi hot spots and the Cingular GPRS/EDGE network,” which will be available late next year or in early 2005.
Verizon Wireless, AT&T Wireless and Sprint PCS have largely relied on reselling Wayport hot spots as a way to counteract T-Mobile USA Inc. However, both AT&T Wireless and Sprint PCS are also building their own hot spots in addition to their roaming agreements. Indeed, Sprint plans to offer a total of 2,100 hot spots by the end of the year through its roaming deals with Wi-Fi providers Wayport and Airpath Wireless Inc. and its own Wi-Fi network.
T-Mobile, which purchased Wi-Fi company MobileStar in 2001, remains the leader, however. The carrier has managed to build out 2,700 of its own locations. T-Mobile has so far not opened its Wi-Fi network up to roaming, but a company spokesman said T-Mobile was considering such a move.
“The wireless carriers have recognized that they have to patch this gap,” said Current Analysis’ Rickard. “If they have Wi-Fi to bundle with their 3G network, then it’s a stronger play.”
Rickard said the easiest way to patch the Wi-Fi gap is through roaming agreements with the likes of Wayport. However, such agreements add nothing to the carriers’ offering and only serve to keep customers from seeking Wi-Fi services elsewhere, he said.
“I don’t think it will reduce churn, it will just block churn,” Rickard said.
Verizon Wireless joining the Wi-Fi race comes as little surprise; the market continues to see massive activity. Just last week, NEC America Inc. and Motorola Inc. said they will team to combine WLAN with voice over Internet Protocol and cellular technologies. Specifically, Motorola said it will integrate its mobility components with NEC’s WLAN infrastructure and NEAX line of enterprise communications platforms. Separately, the Federal Communications Commission announced it will go wireless, adding hot spots to the 12th Street level, the courtyard level and the 8th floor level.
“When you come to the FCC, leave the cords at home. We’re embracing the power of Wi-Fi and the freedom and convenience of wireless Internet access it gives to consumers,” said FCC Chairman Michael Powell.
Indeed, market researchers continue to predict the importance of the market. The Dell’Oro Group forecast the WLAN market will grow from $1.5 billion in 2002 to $3.1 billion in 2007. The group expects most WLAN products to transition from 802.11b to 802.11g and then to 802.11 a/g, except for enterprise-class access points, which likely will skip the transition to 802.11g.
The group said WLAN product categories are in transition too, moving from standalone products to embedded features in mainstream devices. Greg Collins, director at Dell’Oro Group, said enterprise WLAN networks also are transitioning, from being standalone networks and applications to becoming integrated with existing voice and data networks.
