Wi-Fi was on a roll. The IEEE with its 802.11b standard managed to leap ahead of the likes of HyperLAN and Bluetooth to establish itself as the wireless technology of choice. Suddenly we found ourselves in Starbucks sipping cappuccinos and surfing the Net. It seemed as if nothing could stop the relentless charge of Wi-Fi, as airports, hotels, coffee bars and even home-users grasped the no-wires concept.
But following the initial burst of hype and furious marketing, Wi-Fi's momentum seems to have plateaued, particularly with public-domain hot spots. Costs are high and, when weighed against the limited coverage, monthly and annual subscriptions (£85 a month for unlimited BT Openzone account) are difficult for businesses -- let alone general consumers -- to justify. It's no surprise that the business community is sitting back and trying to weigh options, which later this year will also include 3G services, and who can blame them?
Dismal adoption rates
There are a number of issues with Wi-Fi in the public domain that need addressing before corporates start to take the technology seriously for a roaming field force, says Richard Dineen, research director for UK analyst Ovum. "Costs, coverage, inflexible price plans and lack of national roaming have all lead to the dismal adoption rates of WiFi among corporate businesses," he comments, adding that the promises of 3G are also confuse the issue.
"3G pricing will be at or below existing Wi-Fi public hotspot subscriptions but at launch the operators claim they will have a 30 per cent coverage, therefore there is immediately, in theory at least, more value for money, and users are not restricted to hotels and airports," adds Dineen.
Wi-Fi roaming company Boingo acknowledges that cost is still major inhibitor. Tracy Allard, Boingo’s director of European Carrier sales believes that while there is "excitement surrounding Wi-Fi in Europe," and that the company is "optimistic about the market's development," the cost of service "is a significant factor in holding up increased usage of Wi-Fi," she says. "The cost in Europe is roughly five times the cost in the US and this high price may be slowing mass adoption."
It's not as if businesses are not interested. Research by Toshiba and the Institute of Directors (IoD) last month found that 50 per cent of UK businesses surveyed are planning to invest in wireless technology during the next 12 months, although just 21 per cent have a formal wireless strategy. So while the will is there, the commitment is stalling and the expected execution would appear to be haphazard to say the least. This is being bred by confusion due in part to a number of mixed messages being dished out about Wi-Fi and the potential overlap with 3G-enabled mobile networks.
The statistics indicate that the total number of public Wi-Fi users is expected to grow significantly by 2005, from 2.4 million in 2003 to 10.4 million in 2005, according to analyst IDC. Vendors too are talking up the technology to try and spur it on but it could be a case of trying to run before you can walk. It's not surprising given the fact that 3G is now breathing down the neck of Wi-Fi hot spots.
Proxim has been a major force in the wireless world since the late 90s and is understandably sensitive to the idea that Wi-Fi is going through a tough time at the moment, at least in the public space. Anthony Fulgoni, Proxim's UK & Ireland regional sales manager is ebullient, saying "Wi-Fi is still growing apace." He adds that from Proxim's point of view, there is more and more interest and even more deployments as end-users start to realise the benefits of the technology.
Bars and pubs?
"They're looking out for Wi-Fi hotels and hot spots," he says. "Continued investment in hot spots from major players such as Starbucks/T-Mobile and The Cloud reflects this steady growth." That's true, but from a business point of view we can probably discount The Cloud, at least in terms of its public hot spots, given its tendency to locate in bars and pubs (although a happy worker is a good worker, this could be pushing it a bit).
Proxim's response is typical and completely understandable, as Wi-Fi is still a fantastic technology. The Wi-Fi industry is having none of this talk about demise and 3G competition and is instead going on the offensive. Last year five major telcos set up the Wireless Broadband Alliance (WBA) to drive broadband wireless technologies through cooperation and joint marketing initiatives. This year, IBM, T-Mobile and BT are among the companies that have added their names to the membership list, and it is here that much of the work in enabling the first stage of hot spot roaming (where users can have one common interface regardless of their initial hot spot supplier) will be done.
There is a degree of fragmentation in the Wi-Fi infrastructure," says Dinnen at Ovum, "and this is where the WBA are trying to resolve some issues. The work is progressing steadily but it needs to happen quickly if Wi-Fi is to establish itself before the onset of greater 3G services next year."
Technical roaming trials by the WBA have just been completed and results are expected to be announced in a few weeks. It's making the right noises but the Wi-Fi industry is growing increasingly impatient and it could in fact take a proprietary solution, such as Boingo, to solve the roaming problems.
The fractured networks that exist at the moment force the user to subscribe to multiple services or pay for redundant per-location fees. This is not only frustrating but also further increases the costs, because Wi-Fi customers cannot take advantage of an "economy of scale" pricing model -- for example, a monthly subscription price for countrywide or pan-European Wi-Fi roaming.
"3G and Wi-Fi will co-exist, and in fact, the combo software from companies like Vodafone or Boingo and others may help drive the usage on both networks," comments Allard at Boingo. "Many carriers are taking a user-centric philosophy to the subject of Wi-Fi versus 3G, providing the customer what they need to always have the best connection."
Boingo believes the promise of Wi-Fi, especially to the business traveller, is so strong and represents such a great market for service providers that these issues will be resolved, allowing the market to grow.
Market growth is something that everyone seems to agree on although the extent of that growth is still open to question. While Wi-Fi has managed to hurdle many of its early technical issues such as speed, security and interoperability, the commercial issue it is now facing is in many ways a stiffer challenge.
Users drunk on hype
Marc Patterson, VP Mobile Workplace Solutions at Infonet, talks about the current phase in hot spot deployment as "a real-estate game" and he's right. Service providers are vying for hotels, cafes, burgers bars and pubs to try and establish market share. Users are becoming "drunk" on the hype of it, he says, and enterprises are sitting back and waiting. Patterson adds that what is needed is a common Wi-Fi interface; a front end for users that can work regardless of the supplier and back-office mechanics.
It seems the honeymoon period for Wi-Fi is over. Businesses are demanding more of the technology before they will bite. While vendors and service providers are making the right noises, 3G waits to chance its arm at offering a more complete service.