The Ovum View: WLAN - beyond simple data access

Public and private wireless local networks have made an impact, mainly because they are so versatile and simple for broadband data access. But what else can they do for us? Ovum principal analyst Jeremy Green makes you think...

Public WLAN business models vary widely but they mostly centre on the provision of straightforward, vanilla data services broadband access. However, there are one or two honourable exceptions.

One option is for the service provider to be using WLAN to deliver an application rather than leaving the choice of application to the end user. A cuter idea is ‘info fuelling’. It is not only people who can make use of hotspot access - how about machines?

Cellular manufacturers have half-heartedly chased the prospect of vehicle telematics for years, with little to show for it. Now several vehicle manufacturers, including Daimler-Benz, have embraced WLAN, acknowledging that many telematics services don’t require constant or even frequent updates. Instead, they are promising applications which would allow cars to ‘info fuel’ at prescribed locations – the most obvious being the same places where they fuel fuel. WLANs in petrol or service stations could be used to download diagnostic and fault information to repair services and at the same time to upload software profiles to the engine and onboard information to driver-oriented services – updating locally held mapping information, for example.

WLANs have also been discussed in the context of location-based services. Here too cellular operators have struggled to deploy services which combine the position of the user with interesting and useful localised information. It would be churlish to deny that there have been some limited successes. But in general the early promise that here was an inimitable USP for wireless internet over its fixed equivalent has been a disappointment. Part of the problem has been the uncertainties and complexities surrounding the various technologies which could be used to calculate the subscriber’s position.

In a WLAN context, many of these complexities disappear. Precisely because public WLAN coverage is so limited, the user’s location is already pretty much known. Since every customer accesses the WLAN service via a hotspot home page, it would be easy to put some localised content on that page. For example, users in a downtown Starbucks accessing a T-Mobile T-Zone service could be shown information about local shops, cinemas or tourist information. This might provide Starbucks with a new revenue stream, which might help to offset the costs of having its coffee bar tables cluttered up with one-latte surfers.

Finland’s Ekahau has taken this one step further, enhancing its position determination software so as to allow its triangulation algorithms to be driven by information measured by WLAN access points. This allows the company, it claims, to locate objects within WLAN coverage down to a metre in accuracy. Finnish network operator Elisa ran a trial in a Helsinki shopping mall. The service, branded as MobileMall, provided shoppers with a PDA-based guide including maps and shop information, as well as internet access.

This opens up the possibility of WLAN networks being deployed purely for indoor tagging and tracking purposes – an application area currently dominated by proprietary tagging solutions. Whether it will be possible to make WLAN devices small and cheap enough to compete with dumb tags remains to be seen.

Finally, there is voice. Within the last few months several mainstream mobile handset vendors have announced that they are working on – and in some cases conducting trials with – WLAN phones. Last month Motorola declared a partnership with Avaya and Proxim to develop devices and services for enterprise use and it has followed this up with a trial with US mobile network operator Nextel of dual-mode WLAN-cellular handsets.

At the CTIA show in late March Nokia announced that it too is planning to put WLAN in its ‘high end’ handsets. Both vendors have thus far emphasised that the WLAN capability is to be used in the private domain, in the home or in the enterprise, where the few WLAN phones that have already been developed have lived to date. According to the manufacturers, it’s the cellular capability that will be used in public spaces.

But will it be possible to keep WLAN out of the public domain? The development of the 802.11e part of the standards family, which offers QoS, will make VoIP over WLAN more like telephony. Given that many public WLAN operators’ businesses are premised on all-you-can-eat packages (rather than time-based or volume-based billing), using the hotspot coverage to make telephone calls in malls, airports and shopping centres is going to seem pretty attractive - at which point the wireless carriers may have more to worry about than the non-arrival of the data services market over which they have so long salivated.

It’s something of a curious move for the handset vendors – most of which also have valuable businesses supplying infrastructure to the wireless carriers, and for whom the latter are generally the primary route to market. Until now operators and device vendors have jostled each other for prime position in the wireless value chain but nevertheless both groups have bet their future on the same public network model.

Lately, the vendors have begun to think about other uses, and other connectivity methods, for the personal devices which they supply – including IrDA, Bluetooth and even USB cables. Perhaps public WLAN will be the place at which vendors and carriers part ways.

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