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Proxim, Ericsson, and Agere combine to tempt operators with WLAN. But will the new partnership be called PEA or APE?
October 24, 2002
LM Ericsson (Nasdaq: ERICD) has jumped into bed with Agere Systems (NYSE: AGR) and Proxim Corp. (Nasdaq: PROX) in a bid to sell an "end-to-end solution for WLAN" to mobile and fixed operators (see Ericsson Teams on WLAN).
Although the three vendors have not gone as far as to give their partnership a name, Unstrung reckons that using their initials and collectively calling the trio "APE" would give a big boost to the marketing potential of their partnership.
So what is APE going to do for mobile carriers? Well, the idea is to provide a combination of hardware and software that will allow mobile service providers to offer an integrated public WLAN service along with their 2G and 3G services. Customers would have a SIM card that would allow them to have a uniform log-on and authentication process, no matter which wireless data access method was being used -- WLAN, GPRS, or (in the future) W-CDMA. According to Agere, which believes it will bring its integrated SIM technology to the party in the first half of 2003, this would also allow roaming between service providers.
"Without hesitation, a lot of operators are taking a great interest in WLAN right now," says Ericsson spokesman Mats Thoren. "This is a favorable time for operators to look at such alternative technologies for a relatively quick return on investment. The infrastructure effort and investment with WLAN is much less than with other data network alternatives," he adds.
The key to APE's joint offer is that the customer will use the same procedure to log on and connect to the network, regardless of network type, says Thoren. "The WLAN market has been missing this important element up to now -- this is the next big step."
In addition to Ericsson's existing mobile operator WLAN customer, Denmark's TDC (see Danes Catch Europe's WLAN Bug), there's a long queue of operators ready for this type of "solution," says Thoren. And which operators are forming this disorderly queue? "We are talking to very many of them, but there are none we can go public with." Well knock me down with a feather!
Anyhoo, the roles the three amigos will play are "components like 802.11b modules, software, and SIM technology" from Agere, "802.11-compliant access points for 2.4GHz and 5GHz bands" from Proxim, and authentication servers compliant with IETF and 3GPP standards from Ericsson.
How many operators decide to "go APE" remains to be seen, but there's no shortage of potential customers in Europe alone. Although public WLAN is a hot topic with existing network operators, few have publicly announced any infrastructure rollout. The technology has been deployed for some years in Scandinavia by the likes of Swedish telco Telia AB and Finnish operator Sonera Corp. (Nasdaq: SNRA), but other than Norway's Telenor Mobil SA (in deployment stage), TDC, and Swisscom AG (NYSE: SCM), there is little commitment to any WLAN strategies – yet.
But Ericsson believes this is a ripe market, and so does reports company BWCS Ltd., which believes that in 2007, 55 percent of WLAN hotspots will be owned by fixed-line carriers, 30 percent by mobile operators, 10 percent by wireless ISPs, and 5 percent by others, such as airports or property owners. In addition, the Yankee Group believes public WLAN services in Western Europe alone will be worth $1.8 billion by 2007, with 7.7 million active users, so it appears that Ericsson's optimism is shared by independent analysts.
— Ray Le Maistre, European Editor, Unstrung
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