When 3G meets Wi-Fi

If you have been reading technology news lately, you'll know it's an unusually busy summer for mobile operators. European and American operators have been launching their much-delayed 3G services. Unfortunately, all of them have decided to price the service way beyond what a lot of people are willing to pay for slow 200 kbps connections. Is this a way to get customers?

When the mobile operators paid billions for their 3G licenses, they did not foresee the rise of Wi-Fi, an alternative wireless network to carry data (and now voice) traffic. By the time they got around to launching 3G service, this is what the world has come to look like: there are thousands of hotspots and hotzones around the world, voice over IP has become very popular (whether it's Vonage or Skype) because of its convenience, ease of use and low price and handset operators are about to release Wi-Fi enabled mobile phones. This means that anyone with a Wi-Fi enabled device can do all that calling and data downloading via a cheap wireless broadband network that offers a lot more bandwidth. Although Wi-Fi isn't as ubiquitous as mobile phone connectivity (yet), it's getting to the point where it is not that hard to find and where waiting until you get within the range of a Wi-Fi signal is not inconvenient (especially considering the price difference between a 3G subscription and Wi-Fi).

In recent months I have noticed more cities deploying citywide Wi-Fi networks for public access. Hermosa Beach is set to launch their free citywide wireless network in August. Spokane has a large hotzone deployed in the downtown area. Chaska, Minnesota and Scottsburg, Indiana already deliver citywide wireless broadband service to their residents. A wireless ISP in Grand Haven, Michigan even offers mobile Wi-Fi throughout the city. Los Angeles is trialing a downtown hotzone with plans to expand it to other parts of the city. ISPs in densely populated Asian cities are testing citywide wireless mesh networks to carry voice and data traffic. Since most people make mobile phone calls within their city and to people who live in the same city, how attractive will mobile phone and 3G subscriptions be when you can make those calls over a Wi-Fi network everywhere in your community? Look for severe price cuts in voice and 3G subscriptions.

As the price of wireless broadband equipment drops and the different technologies (mesh and antenna) get getter, even more cities and regions (counties and provinces) are considering wide-area Wi-Fi networks. Houston County, Georgia has even concluded a successful trial of a county-wide network: they were able to deliver 5Mpbs over a distance of 12.5 miles (20 km). Wait until WiMAX equipment becomes available and cheap.

Unfortunately, the temptation on the part of the operators to cripple Wi-Fi enabled mobile phones is too great to resist. Imagine getting your Wi-Fi mobile phone from your operator only to discover that it does not work on Wi-Fi networks that are not affiliated with the operator. Here is where the computer industry comes in. Manufacturers such as HP are set to release Wi-Fi enabled tri-band mobile PDA devices that work on any network. Guess who's going to win?

Posted by Esme Vos, July 25, 2004 05:58 PM | | TrackBack