Wireless Local Area Networks (WLANs)
based on the 802.11 protocol are proliferating in corporate environments
worldwide. This mobility is also fueling the desire of mobile business users to
have "anytime, anywhere" wireless Internet access. Because of this,
wireless and wireline service providers should consider adding 802.11 services
to their standard Internet or GPRS and CDMA offerings.
The growth of 802.11 services
can be attributed both to cost and convenience factors. In many corporate
enterprises, WLANs have replaced or are complementing traditional cabled
networks, enabling enterprises to create and maintain a wireless network
throughout their facilities - single or multiple buildings - without the costs
and physical limitations experienced with traditional cabling. WLANs provide
unprecedented levels of flexibility for workers, increasing their productivity
by allowing them to roam throughout corporate facilities, easily collaborating
with colleagues, without losing access to network resources.
Demand for roaming access extends outside enterprise boundaries into thepublic
space. Busy mobile business users want access to their corporate information
while on the road, which has spawned the creation of public wireless access
hotspots in a variety of venues, such as airports and hotels. While public
wireless LAN services - often called Wi-Fi - are still relatively new, user
demand for ubiquitous wireless access is growing rapidly.
As with any new market, the Wi-Fi market offers opportunities both to existing
and new players. Carriers can capitalize on their infrastructure, billing
systems and downstream customer relationships to incorporate complementary
service offerings into their portfolio of services for revenue opportunities
whether they're wireline or wireless service providers.
There are four potential roles carriers should explore if they wish to be
players in this market:
Facility Provider
As a WLAN facility provider, a carrier owns the hotspot equipment or operates it
on behalf of a venue owner. The facility provider generates revenue through
roaming agreements with other Wi-Fi service providers such as clearinghouses,
hotspot aggregators or Internet service providers.
For some carriers, it may be natural to deploy hotspots themselves. For others,
deploying their own hotspots might be contrary to capital expenditure freezes;
in any case, there are opportunities to acquire start-ups that already have a
footprint. Backhaul providers are naturally positioned to be facility providers,
as they have control over the last mile, which represents the single largest
recurring cost of operating a hotspot.
Facility providers can provide a number of services. Most will rely on strong
authentication, authorization and usage tracking and billing systems that will
allow them to leverage their resources for additional services and revenue.
Wi-Fi Service Providers
As a Wi-Fi service provider, a carrier offers 802.11 access to a base of
subscribers. The hotspots are provided directly by the carrier, or indirectly by
facility providers with whom the carrier has signed roaming agreements. Wi-Fi
service providers may provide roaming Wi-Fi access in addition to conventional
Internet services and, as such, will charge subscribers extra for the privilege
to roam.
Wireless carriers already deploying CDMA or GPRS services can combine802.11
access in order to offer their subscriber bases ubiquitous access, establishing
themselves as leaders in wireless service access.
Like facility providers, the strength of Wi-Fi service providers relies on
strong authentication, authorization and usage tracking and billing systems with
added functionality.
Clearinghouse
As a WLAN clearinghouse, a company brokers the relationships between WLAN
facility providers and Wi-Fi service providers. Clearinghouses are particularly
useful in the hotspot market because they greatly reduce the number of business
agreements needed between many small WLAN facility providers and Wi-Fi service
providers.
Carriers may choose to act as clearinghouses for other carriers operating in
different geographies. The carrier signs agreements with many local WLAN
facility providers and makes the hotspots available not only to its own
subscriber base but also to roaming subscribers belonging to other carriers.
Backhaul providers may choose to offer clearing services for the facility
providers to whom they provide Internet connectivity.
Managed WLAN Provider
Many enterprises will opt for 802.11 as a managed service, opening up
opportunities for carriers to act as the managed WLAN service provider.
Enterprise-wide WLAN deployments can be quite complex. Enterprise IT departments
may simply not have the time or expertise to deal with issues such as proper
antenna placement, channel selection and security. This creates an opportunity
for carriers to bundle WLAN managed services with their existing connectivity
services, particularly since many carriers already have customer premises
equipment (CPE) in place.
The primary issue for service providers will be in offering this service
cost-effectively, while providing solid customer service. Successful service
providers will automate the operations, administration, maintenance and
provisioning of managed WLAN services.
In
considering wireless LAN market opportunities, service providers would do well
to review a recent research report on managed 802.11 services for small and
medium size enterprises (SMEs). That report identifies three industries with
interest in deploying wireless LANs - healthcare, financial and manufacturing.
In each of these segments (particularly healthcare and manufacturing), mobility
within the organization's facilities is an essential part of job performance,
which makes them strong candidates for being "early adopters."
Such organizations may also be receptive to managed 802.11 services, according
to the report, because WLAN deployments can be quite complex. SME IT departments
may simply not have the time or expertise to deal with issues such as proper
antenna placement, channel selection and security. This creates an opportunity
for carriers to bundle WLAN managed services with their existing connectivity
services, particularly since many carriers already have customer premises
equipment (CPE) in place.
As may be expected, within each of the three vertical industry groups surveyed
there were some divergent opinions and trends observed.
Healthcare SMEs
While healthcare SMEs surveyed tended to be least likely of any group to have
(or know of) managed services, they were the most likely to already have a
wireless LAN in place (by a small margin) - perhaps because of the mobile nature
of workers within many healthcare facilities. For example, healthcare providers
must move from room to room, or across a campus environment in the course of
their duties. Network security appeared to be one primary motivating factor for
healthcare SMEs - combined with a perceived lack of internal expertise. This may
provide an opportunity for service providers to provide integrated LAN/WLAN and
VPN security services. Because of this group's relatively low awareness of
managed services, however, a service provider may find it worthwhile to conduct
some market education and awareness activities before launching a service. Given
the concern for security but interest in the mobility of a wireless solution, a
managed service that can solve those joint issues may fare quite well in this
segment.
Finance SMEs
Of the three groups surveyed, finance SMEs were the least likely to have or plan
wireless LANs, or to show interest in a managed WLAN service. This group,
however, still showed a significant propensity towards wireless LANs - a total
of 72% of surveyed finance customers either have or plan a wireless LAN
deployment. And these customers tended to be among the most likely to adopt
managed services in general. So while finance SMEs may not be a good initial
primary market, they did show enough interest in managed WLANs and wireless LANs
in general to be a good secondary target - particularly with service packages
that reflect the security concerns and regulatory requirements of these
companies.
Manufacturing SMEs
Like finance SMEs, manufacturers were more highly aware of and using managed
telecommunications services. In fact, their results in these categories were
identical to those of financial SMEs. And like finance SMEs, 75% of surveyed
manufacturers without any managed services today stated that they were
"likely" to adopt such services in the future.
This segment was the most likely - at 55% - of all groups to be interested in a
managed WLAN service. Given their high propensity towards managed services in
general, and the likelihood of adopting a managed WLAN, manufacturers appear to
be a significant first market for such a service. Service providers may,
however, need to spend some time educating segments of this market regarding the
benefits of wireless LAN in the manufacturing environment, in order to gain
traction with those companies that don't see the need for a wireless LAN.
Any interest shown by survey respondents in managed WLAN services will remain
unfulfilled without a corresponding service that meets the actual requirements
of these potential users. Survey results point towards several features and
characteristics that a service provider should consider when developing a
managed WLAN service.
· Consider bundling a managed WLAN service with a broadband access service.
Obviously, wireless LANs will typically use broadband access services, but
survey respondents indicated a definite preference for obtaining WLAN services
from the providers most likely to be providers of broadband services to SMEs (ILECs/RBOCs
and ISPs).
· The integration of wireless LANs with existing (managed or unmanaged) wired
LAN functionality is another feature that service providers should consider
adding to their managed WLAN service. Survey respondents expressed a strong
interest in this aspect of a service; additionally they are likely to already be
customers of managed LAN services.
· Service providers should adopt solutions that can ensure WLAN security and
integration into the customer's existing firewall and security systems. More
importantly, service providers should focus their marketing and market education
efforts around the security benefits of the managed WLAN solution. Of all the
WLAN "issues" discussed with survey respondents, security was the
issue that surveyed SMEs were most likely to look for help outside of their
internal staff.
· Technical support is another essential element of a managed WLAN service.
Nearly half of respondents with current wireless LANs use some external support
for their customer-owned LANs. This support is mainly for functions like network
integration, security, and general administration.
· Those SMEs without wireless LANs have not implemented them primarily because
of security and performance concerns.
· With only limited exposure to the concept, 45% of SMEs surveyed expressed
interest in managed wireless LAN services.
The best opportunity for providers, particularly for ISPs and RBOCs already
offering managed access and LAN services, lie for those that can provide managed
wireless LAN services that offer customers peace-of-mind regarding wireless LAN
security. This remains the biggest single impediment to adoption of the
technology among respondents who have not adopted WLAN technologies. Because of
this, the managed services market requires robust managed WLAN service
offerings.
ALL
CONTENTS COPYRIGHT © 2003 GRL COMMUNICATIONS INC.
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