Wireless networks invading 3G space?

Shamir Amanullah program leader Frost & Sullivan

When you're part of the mobile workforce, it doesn't matter whether you're sipping a Starbucks latte over breakfast, in transit at Changi airport, at work or even in the bedroom--the Internet and data services stare you in the face. At the kiosk, on the mobile phone or even using a laptop, you are easily connected to the virtual world.

The rise of public area wireless local area networks (WLANs) has provided yet another avenue for Internet ubiquity, extending its reach beyond the domains of home, office and Internet cafes. Though initially developed as an extension to wired networks, WLAN now offers exciting mobility benefits.

With such networks offering pretty much the same data access functionality as third-generation cellular (3G) services, and WLAN having a headstart in the market, mobile operators have cause to worry about losing data revenues.

The fall of 3G and rise of WLANs
Tumultuous 3G deployments, including that of exorbitantly tagged license fees, have enabled WLANs (which occupy an unlicensed frequency space) to emerge as a transient winner.

When the 11Mbps throughput of WLANs is pitched against the 3Mbps of the next-generation cellular network, victory for 3G appears faint. The contest becomes even more one-sided if one considers that next-class WLAN technology in the 5.7GHz frequency band boasts speeds of up to 54Mbps.

Additionally, 3G services are plagued by installation delays, huge costs, nebulous billing models and revenue streams, and lack of killer applications. The promise of videophones that operate on 3G networks as a killer app may not take off as expected. When compared with the current lightweight puny handsets, carrying a videophone is akin to lugging a Panasonic, NEC, or Matsushita CCTV in your pocket.

With wireless networks moving beyond the confines of brick walls, the need to use the much slower cellular data network to gain Internet access could potentially recede. Key areas like hotels, airports and other public areas are today intricately designed and equipped with WLAN facilities, providing the target market with a gateway to the Internet and virtual corporate private networks. It only takes a flip of the notebook in a hotspot for one to be able to function as a remote office with WLANs.

However, there are some factors which could possibly chain WLANs to the ground. Two foremost concerns are the issues of interference and weak security.

Firstly, there exists other radio frequency technologies, such as DSSS, FHSS, Bluetooth and HomeRF, which occupy the same 2.4GHz frequency band. When used concurrently, the commercial wireless networks--DSSS and Bluetooth--will interfere and reduce network performance. However, such small glitches will be fixed when the 5.7GHz band is introduced next year.

To address the security issue, vendors are introducing products equipped with improved 128-bit encryption models. Wireless network access points are being protected by authentication servers, which will prompt users for passwords when wireless access is required, thereby enhancing the technology's security features.

WLANs will continue to appear in the public space much more aggressively. As projected by Frost & Sullivan in its Asia Pacific Wireless LAN report, the market is likely to triple its unit shipments from the current 500,000, over the next three years.

Looking forward, it is plausible that 3G data services will be attractive when finally in motion or in the absence of WLANs. After all, the IEEE802.11b wireless LAN was not designed to be used at anything more than walking speed, ideal for in-building or, to a lesser extent, outdoors accessibility. The handphone, on the other hand, can ensure that even if you travel from pole to pole, you're still connected. But in the immediate future, WLANs will prevail in the data fore.

Shamir Amanullah is program leader at Frost & Sullivan.