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Cisco Wins Swiss WLAN Deal

Cisco Systems Inc. (Nasdaq: CSCO) is threatening to sweep up the lion's share of WLAN equipment contracts from European telco customers in the near future, having added a contract with Swisscom Mobile (see Swisscom Picks Cisco WLAN) to its deal earlier in the year with British Telecom (BT) (NYSE: BTY) (see BT Comes Out in Spots).

"We are in trials with another 10 major telcos in Europe," Gilles Nembe, product manager, EMEA, Cisco mobile office, tells Unstrung. They are a mixture of fixed line and mobile operators he adds, and there could be further announcements in the coming weeks. "We will see how things go in the next three weeks. If we can't announce any more by August then it will be in the fall."

Nembe says Cisco does not have a specific strategy to target the largest telcos, but that the operators are approaching the vendor for help, and this is how the BT and Swisscom relationships came about. "We are also getting a lot of interest from wireless ISPs, building local exchange carriers [BLECs], mobile operators, and enterprises. It's a very dynamic market," he enthuses.

Cisco also announced today it is supplying the WLAN equipment for a 67-point network in the chambers of the Austrian parliament (see Cisco Unwires Austrians).

In the service provider market, Cisco has also won deals with Telefònica in Spain, Mobilcom AG in Germany (remember the hotspots at Cebit?), and WLAN specialist Megabeam in Italy.

Naturally, Nembe believes no other company "can offer equipment from the access to the core backbone" but acknowledges that there are competitors in "single segments." A complete service to operators is provided through integrator partnerships with Motorola Inc. (NYSE: MOT), IBM Corp. (NYSE: IBM), and Hewlett-Packard Co. (NYSE: HPQ).

Indeed, competitors such as Siemens AG (NYSE: SI; Frankfurt: SIE), 3Com Corp. (Nasdaq: COMS), Nortel Networks Corp. (NYSE/Toronto: NT), Proxim Corp. (Nasdaq: PROX) (see Proxim Buys Agere WLAN Biz), and Avaya Inc. (NYSE: AV) appear to have made little headway with European service provider customers, though Finland's Nokia Corp. (NYSE: NOK) has supplied WLAN equipment to its homeland incumbent telco Sonera Corp. (Nasdaq: SNRA).

Interest in WLAN provision is growing in Europe, with most telecom analysts believing that incumbent mobile operators, especially those with 3G licenses, should include 802.11 access as part of their business. Although the public WLAN (PWLAN) market is limited in Europe at present, it is set to grow in the coming years. A recent report from the Yankee Group projects that Europe's PWLAN market will have 7.7 million users by 2007, generating US$1.8 billion in revenues (see Yankee: Euro WLAN Overhyped). Analysys has higher hopes, predicting 20 million PWLAN users in Europe by 2006.

Swisscom Mobile is one of the first of Europe's mobile players to act on WiFi's potential. It has trialed the technology in 20 hotspots and plans to have 100 access points when it launches the service commercially sometime later this year, "most likely for all post-paid customers," says spokeswoman Pia Rogers. Although pricing information is not yet available, users will be charged for use of the service on their regular mobile bills. Rogers adds that Swisscom is investing "tens of millions of Swiss francs" (10 million swiss francs = US$6.6 million) in the infrastructure and that other investments will be driven by demand.

However, Swisscom would not reveal details of which companies it is in talks with concerning overseas access, how it will hook up the access points to its core network (it is promising up to 2 Mbit/s per user), or which company or companies are providing it with triple-play (GPRS/UMTS/802.11b) network interface cards, though Rogers says "we have heard from companies that offer such cards, such as Nokia."

— Ray Le Maistre, European Editor, Unstrung
http://www.unstrung.com
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