mmO2 Gears Up For WLAN

Pan-European operator mmO2 plc is planning to announce wireless LAN services through its wireless carrier businesses in Ireland, Germany, the Netherlands and the U.K. in 2003. O2 Ireland has already undergone some trials and is sourcing its equipment and software exclusively from Nokia Corp. (NYSE: NOK) (see Nokia Does Irish WLAN). However, this does not mean the Finnish vendor will automatically win business from the rest of the O2 operator stable. Although mmO2 has "a central strategy to do things as efficiently as possible," says data PR manager Kate Mant, "each O2 operator will make a decision based on market conditions. Solutions will vary across the group." Ireland is leading the way within the group, says Mant, and the other operators will "be communicating their strategies early in 2003, though that will be to explain what they are doing rather than saying they have rolled out services." When asked whether O2 U.K. would partner with its former parent British Telecommunications plc (BT) (NYSE: BTY; London: BTA), which is rolling out WiFi hotspots (see BT Adds Coffee Hotspots), Mant says "nothing has been finalized, but we'll be talking about the U.K. plans some time around next February." We were keen to find out more about O2's specific plans in Ireland, but the phones went unanswered before we published this story. What we do know is that Nokia's "solution" includes access points, access controller, authentication servers, and end-user cards. The system, which is compliant with the Institute of Electrical and Electronics Engineers Inc. (IEEE)'s 802.11 standards, offers authentication using a mobile SIM card, and allows the operator to combine WLAN access with regular mobile services on the same subscriber account and to provide a single bill. The Irish telecom watchdog, Office of the Director of Telecommunications Regulation (ODTR), cleared the public use of 802.11 and Bluetooth equipment in the 2.4GHz and 5GHZ bands in September 2001. mmO2 follows in the footsteps of Swisscom Mobile, which is launching its service on Monday (see Swisscom Launches WLAN), and T-Mobile International AG, which has hotspot trials ongoing in Berlin and London Starbucks coffee shops. Telecom analysts believe mobile operators are ideally positioned to offer WLAN services to their customers. In-Stat/MDR believes wireless carriers should enter the WLAN market as soon as possible (see In-Stat: Don't Miss WLAN Boat), while the Yankee Group analyst Declan Lonergan believes WiFi services are a perfect complement to mobile wide area network data services. Yankee believes there will be nearly 8 million public WLAN (PWLAN) users in western Europe in 2007 (more than 6 million of which will be business users) creating revenues of about $1.7 billion. "I believe the fixed and mobile operators will carve up most of the PWLAN market between them, but that the mobile operators have more to bring to the sector," says Lonergan. Naturally, the equipment vendors are very keen to see the operators plan access point rollouts, and are jostling to be in the best position to win carrier contracts. Apart from Nokia, Cisco Systems Inc. (Nasdaq: CSCO) is actively targeting the carrier sector with its WLAN products, while LM Ericsson (Nasdaq: ERICY), Agere Systems (NYSE: AGR/A), and Proxim Corp. (Nasdaq: PROX) recently teamed up to woo wireless operators (see Trio Takes WLAN to Carriers). — Ray Le Maistre, European Editor, Unstrung
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