WiFi: More relevant than ever

I was reflecting on the happenings in the wireless industry in 2008 and realized that WiFi has become more relevant than ever. Remember how irrelevant it was predicted to become? Earlier this year an Ericsson executive said WiFi hotspots like the kind in Starbucks and hotels could become the telephone booths of the broadband era--very out of place, if not completely extinct. And then there were the failed muni-WiFi businesses of Earthlink and MetroFi earlier this year.

But fast-forward to today, and it's a completely different story. WiFi embedded in popular devices such as the iPhone 3G and the BlackBerry Bold, are increasing its popularity. A plethora of dual-mode WiFi/cellular devices are expected to come to market in 2009, especially as AT&T, which recently acquired Wayport, uses WiFi as the cornerstone of its wireless data strategy.

In fact, AT&T and T-Mobile, the other operator that has embraced WiFi, are poised to capitalize on new revenue opportunities that come from embedding WiFi in more consumer devices such as cameras, gaming and PC tablets. That is the vision for 3G and 4G networks but companies like AT&T will get there faster with WiFi, which still offers faster data speeds and is available in a sizable number of locations. This year at the Consumer Electronics Show, the Wi-Fi Alliance is expected to announce a WiFi chipset milestone, which includes penetration into the consumer electronics market. Third-generation technology has yet to penetrate the consumer electronics market.

A WiFi strategy may also be key for significant penetration into the enterprise market. The all-WiFi campus is emerging, and being able to offer one device so that the enterprise user can access the same applications across campus on the WLAN and on the 3G network outside the enterprise campus is a compelling proposition. Voice services could also be in the mix. All of this will happen well before femtocells get off the ground. Moreover, using WiFi overseas is cheaper than roaming on 3G, hence iPass' recent introduction of the iPassConnect offering for the iPhone and iPod Touch. iPassConnect allows customers to access iPass' 100,000 hotspots around the world via one log-in.

Muni-WiFi isn't dead either. It has just evolved into more reasonable business models that include local government anchor tenants and/or a few other high-user tenants such as colleges and medical campuses. And Cablevision's answer to WiMAX is WiFi. Rather than spending billions on a mobile broadband initiative, cable operator Cablevision is spending $300 million to roll out WiFi in New York and Long Island during the next two years as it looks for ways to compete with Verizon for control of one of the largest markets in the U.S. Cablevision is using the service as a value-add that can't be matched by Verizon.

The future is extremely bright for WiFi, and operators without a WiFi strategy should be rethinking that one. No matter how pervasive they think their 3G networks are, WiFi offers advantages 3G just can't match. --Lynnette

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