August 08, 2003, 10:43 AM — Sensing an opportunity and a challenge, wide-area mobile broadband service providers and equipment makers are positioning their wireless data technologies as an alternative to Wi-Fi hot spots, with the promise to users of wider coverage and lower cost.
Though Wi-Fi technology has limits it has spurred general interest in wireless connectivity and spawned a growing population of multitasking laptop users who can be seen in cafes, airports, and hotels around the world, sipping coffee, having business discussions and using some downtime to catch up on e-mail. But now that Wi-Fi has piqued user interest in wireless connectivity, it may provide opportunities for alternatives.
"If consumers are given a choice between a service for which they have to find the nearest point, and a service that is everywhere, we think the everywhere service will win every time," said Chris Gilbert, chief executive officer of IPWireless Inc. in San Bruno, California. IPWireless sells equipment for mobile broadband services, built around a packet data implementation of UMTS (Universal Mobile Telecommunication System). "The best analogy I have heard is to pay phones versus cell phones."
Wi-Fi was designed as a local area technology and is not equipped to cover wide areas, support mobility, or scale as a carrier- grade network, according to Gilbert. "In urban areas Wi-Fi covers a few hundred feet, while IPWireless covers about two and a half miles," Gilbert said.
The largest cost with Wi-Fi is not upfront capital expenditure but the ongoing operating expenditure to backhaul all the access points, according to Gilbert.
Wi-Fi operators have to set up more access points to match broadband wireless coverage, and incur large backhaul costs since each access point has to be connected to T1 or DSL (digital subscriber loop) lines. To break even, then, Wi-Fi operators have to generate more revenue from each user than do operators of wide-area, mobile broadband technologies, he said.
Now, IPWireless' technology is getting a boost as service providers in New Zealand, Germany, Malaysia, and the U.S. have announced plans to deploy networks using its products. Other equipment makers for wide-area mobile broadband include New Jersey-based Flarion Technologies Inc., Navini Networks Inc. in Richardson, Texas, ArrayComm Inc. in San Jose, California, and Broadstorm Inc. in Bellevue, Washington.
"The benefit of these (wide-area mobile broadband) technologies over Wi-Fi is that you do not have to hunt for a hot spot, and you can get service where there is not a hot spot," said Tole Hart, principal analyst for mobile and wireless at Stamford, Connecticut-based research firm, Gartner Inc.