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Swedish telco's deal with Italy's Megabeam may not be a big money-spinner, but it has symbolic importance
June 17, 2002
Swedish incumbent Telia AB has set the WLAN roaming ball rolling in Europe, striking a deal with the Italian business of pan-European 802.11b service provider Megabeam (see Telia Roams With Megabeam).
Telia Mobile's WLAN operation, called HomeRun, claims this is the "first time in Europe that two wireless broadband network operators with existing networks [have signed] a roaming agreement."
Something to be proud of, surely, and good news for corporate users seeking high-speed wireless access while on their travels. But despite what might appear to be positive news in an industry beset with issues, Telia is remarkably reluctant to elaborate.
The crux of the deal is that any HomeRun customer can gain high-speed Internet access via Megabeam's Italian sites for free until the end of August, after which they will pay a yet-to-be-disclosed fee.
But just how many users will be able to benefit from this service is not known. "We cannot say how many customers we have. We choose not to disclose our subscriber figures," says Telia Mobile spokesperson Hakan Strom.
So will this be the first of many such roaming deals? "I am not going down that route. I cannot say anything about the future," insists a tight-lipped Strom.
What we do know is that Telia claims its service is available at more than 450 locations in the Nordic region, mostly in Sweden, and in the international business lounges of Swedish airline SAS outside Scandinavia.
Less is known about Megabeam, but it has offices in at least five European countries and, according to a spokesperson, has conducted WLAN service pilot schemes with corporations in the U.K., Germany, France, and Italy. The Italian operation (according to the company's coverage map) at present appears to consist of hotspots in two airports -- Rome (but only departure gates 8-12!) and Milan (all departure gates) -- and one shopping mall and a hotel in Rome. [Ed. note: Now that's what we call a focused strategy!] However, the spokesman claimed that there were now many more live hotspots with additional access points being added each day.
Megabeam has ambitions to strike roaming agreements with other WLAN access providers around the world. Its Website states that by July its service will be available in 29 European airports and "in 67 business hotels located near those airports or downtown in Europe's prime business destinations."
So, while on one level this might appear to be an almost meaningless deal (in terms of the number of people that might make use of the roaming offering), it is still a landmark agreement in terms of non-domestic 802.11b access. This international aspect is vital for WLAN operators looking to provide corporate users with a useful service, according to Ross Pow, managing director of research at U.K.-based Analysys Consulting. "Roaming will be very important" to the service providers and the corporate customers, states Pow. And he believes the WLAN services market is tailor-made for established telecom companies. "This is an opportunity that favors the bigger players -- those with an existing customer base," he adds, in that it would be an incremental offering in addition to existing fixed and/or mobile services.
British Telecom (BT) (NYSE: BTY), which is currently building out its first WLAN hotspots, appears to agree with that assessment. It is in discussions only with "established telecoms companies" regarding roaming agreements for its WLAN customers (when it signs some), according to Keith Trevorrow, program manager at BT Retail's business mobility unit. He believes BT will be able to announce some deals later this year -- with Telia and Sonera Corp., which also has a WLAN business, obvious candidates.
According to Analysys forecasts, there will be more than 20 million users of public WLAN services in Europe by 2006, generating a not insignificant €3 billion (US$2.83 billion) in revenues for public WLAN operators. Let's see if we can remember to come back to that one in four years' time. You never know -- that might even be a conservative estimate.
— Ray Le Maistre, European Editor, Unstrung
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