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Danes Catch Europe's WLAN Bug

Another day, another European service provider preparing to add 802.11b to its public access portfolio. TDC Mobil, the mobile business of Denmark's incumbent telco, is the latest operator preparing a marketing campaign for WLAN services. It will officially launch its service, albeit with a single hotspot, on August 1.

TDC's announcement follows on the heels of news from Swisscom Mobile (see Cisco Wins Swiss WLAN Deal) and British Telecom (BT) (NYSE: BTY) (see Crazy Prices for BT's WLAN) that they are to launch commercial WLAN services this year. Scandinavian operators Sonera Corp. (Nasdaq: SNRA) and Telia AB are old hands at WiFi, while Mobilcom AG in Germany built and managed a WiFi network at the CeBit trade show in Hannover last March. Late last year, Austrian mobile operator One (in which TDC holds a 15 percent stake) acquired WiFi service provider eWave. More announcements seem set to follow if 802.11 vendors such as Cisco Systems Inc. (Nasdaq: CSCO) live up to their promises.

But not all of Europe's mobile operators are heaving themselves onto the 802.11b bandwagon, says Declan Lonergan, director of wireless for Europe at Yankee Group. "We spoke to a number of European mobile operators about their wireless LAN plans -- or their lack of them -- and heard a number of different messages," Lonergan tells Unstrung (see Yankee: Euro WLAN Overhyped). "The Nordics have already deployed, and talk about the convergence opportunities with their WAN mobile networks. But in other areas, such as Spain and Italy, and France to some extent, it is less certain what will happen. The mobile firms there are looking at the viability of WLANs and hedging their bets."

Is it inevitable that mobile operators will incorporate WLAN into their access strategies at some point? "There is a certain amount of pressure on the mobile operators, and there will certainly be more deployments in the next 12 months. Some will strike partnerships [rather than build their own hotspots]. Some will deploy WLANs purely as part of a defensive strategy. Some are concerned that hotspots will eat into their 3G or GPRS revenues," adds Lonergan.

TDC Mobil's strategy is to be the leading provider of WLAN access in Denmark, and it has been deploying systems and hardware since last December. While Cisco and Symbol Technologies Inc. supplied the 802.11b hotspot access point technology to the Danish operator, Ericsson AB (Nasdaq: ERICY) provided the system that will allow TDC to integrate the WLAN setup with its mobile network. Specialist vendor Service Factory supplied the service creation and provisioning software. Financial details are, as per usual, unavailable.

Ericsson has made the most noise about this deal, and is in fact the only company involved to issue a press release (see Danes Choose Ericsson), mentioning its role as the supplier of a "Mobile Operator WLAN system." This basically involves delivery of "server software that integrates [the WLAN system] with the cellular network, including a security package. It is a mobile operator solution," as Ericsson spokesman Mats Thorén tells Unstrung. This sets it apart from a "standalone WLAN solution, which is what you see so much in the U.S. It has to be integrated into the total mobile solution," if WiFi is to make any money, he adds.

The system supplied to TDC will ultimately allow customers to use the same mobile number and password to access the operator's network whether using a GPRS, UMTS, or WLAN connection. "There are a lot of benefits to mobile operators from this sort of integration," says Thorén, adding that the same backoffice systems can be used for customer care, billing, and subscriber authentication.

Thorén says Ericsson is currently in trials with a number of other mobile operators in Europe and elsewhere and expects to be publicly announcing further deals "in the near future."

TDC Mobil, which has about 1.9 million subscribers, has already installed the "core system" in its network, and has just installed the equipment at the first hotspot, the Hotel Comwell in the town of Roskilde (home also to one of the oldest rock music festivals, apparently). Although the total number of hotspots planned was not revealed, the deal with Ericsson "commits us to 50 hotspots," Morten Stryhn, market consultant at TDC, tells Unstrung. "I can't give you an exact number, but we are going for the role as market leader," he adds.

TDC is adding WLAN to its services "to give our customers a more flexible and effective workday," says Stryhn, "and to complement UMTS," which will not be available in 2002. The WLAN service, which will provide speeds of up to 2 Mbit/s, will be available "to anyone," though information regarding the sourcing, provision, and distribution of network cards for PCs was not available. TDC Mobil is linking the access hardware to the TDC backbone via ADSL connections.

WiFi access will be available as a prepaid service at launch, but "we plan both flat-fee and volume-based subscriptions in the future," says Stryhn, who would not comment on planned revenues.

As for any arrangements for WLAN access overseas for its users, TDC Mobil is "open for discussions regarding roaming agreements with other WLAN service providers and other interesting partners, but no contracts have been signed," says Stryhn.

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