802.11b Brings Good News802.11b Brings Good News

Rapid acceptance of the 802.11b standard suggests significant growth for WLAN operators and IT vendors

May 6, 2003

1 Min Read

CEDAR KNOLLS, N.J. -- There is an almost unreal sense of excitement surrounding wireless local area networks (WLANs). Rapid consumer and enterprise acceptance of the relatively new 802.11b standard (also known as Wireless Fidelity or Wi-Fi) has caused component prices to tumble, further fueling growth, according to Probe Group.

Probe analyst David Chamberlain explained that along with the sale of components comes speculation that there are significant business opportunities for companies seeking to operate public networks using Wi-Fi. "These so-called public WLAN (PWLAN) hotspots, it is hoped, will attract revenue-generating laptop users to airport lounges, coffee shops and bookstores."

However, Chamberlain suggested there are several factors that appear to be natural caps to the revenue potential of PWLAN operators, including:

  • A limited total addressable market

  • Customer resistance to paying for multiple Internet access accounts

  • The high cost of backhaul



Probe believes wireless service provider networks—operated by the Vodafones, T-Mobiles and DoCoMos of the world—will be important, and perhaps dominant providers of PWLAN services. However, these carriers have unique technological needs and a unique set of assets that do not exist anywhere else, particularly in the areas of roaming, authentication and billing that are far different than those of the more traditional Internet service providers.

Probe also has no doubt that these service provider networks will be a substantial market for Wi-Fi network equipment. However, the IT/computing companies wishing to market their PWLAN solutions to these service provider networks must address all of these carrier issues or risk being left out of what could prove to be the largest PWLAN carrier segment altogether.

Probe Research Inc.

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