Wireless VOIP expected to inject life into slow-growing WiFi market; WiMax, 3G Hot in 2006, according to Infonetics Research

January 24, 2005

3 Min Read

LONDON -- Although not large now, the Wi-Fi market will show healthy growth in the medium- to long-term from 2006 on, according to a new study by Infonetics Research, "Service Provider Plans for Wi-Fi and Wireless Broadband: North America, Europe, and Asia Pacific 2005."

The study, which examines the strategies, technology requirements, and network implementation plans of 24 fixed line and mobile service providers and wireless ISPs, says future growth will come as multiple wireless broadband technologies co-evolve and service providers learn how to exploit them to generate rich, near-ubiquitous, and affordable broadband services delivered over an underlying patchwork of wireless technologies.

For now though, service providers are grappling with basic business questions, such as how services will be priced and bundled and how big the potential market is. Deriving revenue from Wi-Fi will continue to be a challenge to providers until the business model takes shape.

"Despite slow growth in Wi-Fi revenue, there remains optimism about the technology and confidence in wireless broadband services," said Infonetics Research’s Richard Webb, directing analyst for wireless LANs and lead author of the report. "Many service providers seem to view Wi-Fi as the thin end of the wireless data wedge, driving demand and adoption of wireless broadband services. To accommodate this, wireless networks in the future will be more of a patchwork of different technologies supporting 3G, Wi-Fi, WiMAX, and others."

Voice over IP over wireless LANs is likely to be the application that drives widespread adoption of wireless LANs throughout the enterprise, and then later in the Wi-Fi market as well. In Infonetics’ study, 50% of the service providers interviewed said they will offer packetized voice services in 2006.

Sample Study Findings
- Wi-Fi usage levels are growing, but driving subscriber growth is a vexing challenge

- Cost is the top criterion when respondents judge whether to deploy a wireless technology, followed by reach and interoperability

- Many carriers view hotspots as part of a wireless broadband strategy rather than a unique service, so the public Wi-Fi market is likely to receive extra stimulus as other wireless technologies such as WiMAX and 3G gain market momentum and converge with Wi-Fi

- Authenticating users and controlling network access is the top network management challenge, and one that vendors must resolve

- 33% of the service providers interviewed expect to offer services over WiMAX next year to fulfill several roles: backhaul for Wi-Fi hotspots, replacement for broadband fixed wireless connections, portable wireless Internet access (once Intel embeds WiMAX chips in laptops), or even a DSL/cable broadband replacement technology for consumers

Regional Trends
- The North American market has been the quickest to embrace Wi-Fi, with far more startup WISP activity than any other region

- With some 7,000+ hotspots currently operational, the Asia Pacific market is the second largest and is growing quickly, with most of the activity in Japan, Singapore, and South Korea (Malaysia, Australia, and China are beginning to see increased service availability)

- The bulk of the hotspot rollouts in Europe have been in Scandinavia and in Central Europe, particularly Germany, Switzerland, and Austria with the UK beginning to catch up

Infonetics Research Inc.

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