Subject: [NEXTEL-1] Wi-Fi taking off in Europe with 500,000 users expected by 2004

From: Marcel <[email-masked]>
Date: Wed, 22 Jan 2003 16:27:03 -0500

Wi-Fi taking off in Europe with 500,000 users expected by 2004

Wi-Fi is quickly taking off in Europe, where there are hot spots in roughly 1,000
locations. The European Wi-Fi
market is still small, especially when compared to the U.S. Europe currently claims about
4,000 hot spot
subscribers compared with 65,000 in the U.S. and 20,000 in Asia. But regulators in the EU
are warming to WLAN
technology. The U.K. this week approved 802.11a use for hot spots. European telecoms are
also jumping on the
Wi-Fi bandwagon, looking for a cheaper mobile data solution to 3G. For instance,
TeliaSonera, the
Swedish-Finnish carrier, has rolled out 500 hot spots around Scandinavia, giving it the
largest Wi-Fi footprint in Europe. Also, France and Italy are expected to relax their
regulations on Wi-Fi hot spots later this year, opening those markets. Some experts expect

European Wi-Fi growth to explode over the next few years, with the Yankee Group predicting
500,000 European
Wi-Fi users by 2004.

JANUARY 27, 2003

INTERNATIONAL -- EUROPEAN BUSINESS

Wi-Fi: Here Come the Big Guns
Deep-pocketed players may rev its already sizzling growth

Ahmet Aykaç used to have a devil of a time getting
online from the road. The director of Theseus
International Management Institute near Nice, Aykaç
wasted hours fiddling with modems and balky
dial-up connections to check his e-mail. "It was a
pain in the neck," says the peripatetic 57-year-old
Turk. Now, Aykaç's laptop is fitted with a wireless
modem that gives him Net access at blistering
speeds from airport lounges and hotel conference
rooms, so he can work as efficiently in Zurich or
Miami as he does in his own office. "For the first
time in my life, I've actually started to enjoy
layovers," he jokes.

Stories such as Aykaç's are popping up all over Europe as a hardy band of
pioneers latches onto the world's hottest new communications craze. These
folks aren't surfing the Web over next-generation mobile-phone networks.
They're using a crude and inexpensive technology called Wi-Fi--short for
wireless fidelity--that's as fast as many office networks and already available in
more than 1,000 locales around Europe, from train stations to coffee shops. A
road warrior carrying a computer equipped with Wi-Fi needs only to come
within 100 meters of a wireless access point, or "hot spot," to hop on the Net
and happily surf.

To be sure, the market is still tiny. Analysts figure that only about 16,000
Europeans now pay to use Wi-Fi. And of those, only 4,000 are regular
subscribers to services that charge up to $150 a month for unlimited
downloads. By comparison, the U.S. has about 65,000 paying users and Asia
20,000. But 2003 is being billed as a year of gonzo growth--a rare bright spot
in the otherwise gloomy tech landscape. European sales of Wi-Fi interface
cards for PCs are expected to soar 66%, to 4.6 million units, says technology
market researcher In-Stat/MDR in Scottsdale, Ariz., and the number of hot
spots should quadruple (chart). At that rate, Europe could have a half-million
Wi-Fi users by 2004, according to telecom consultant Yankee Group.

These numbers are drawing the attention of the Continent's big telecoms. Until
six months ago, most "were completely freaked out by Wi-Fi," says analyst
Richard Dineen of telecom researcher Ovum Ltd. in London. They worried
that the upstart technology would steal away customers from the 3G mobile
services they're spending billions to develop. Now, carriers realize that the two
technologies are more complementary than competitive. Want to access your
e-mail or corporate network from your laptop while sipping an espresso?
Wi-Fi is the way to go. But if you want to quickly check a stock quote or flight
schedule while riding in a cab, your mobile phone is the better option.

So now, the telecoms are jumping into the Wi-Fi game rather than ceding the
field to others. TeliaSonera, the Swedish-Finnish carrier, has deployed 500 hot
spots around Scandinavia, giving it the largest Wi-Fi footprint in Europe. "We
want to encourage people to use wireless data of any kind," says TeliaSonera
Director Carlo Cassisa. Swisscom and Germany's T-Mobile also are hopping
on the Wi-Fi bandwagon, as is British fixed-line telecom BT Group PLC.

True, the market the telecoms are chasing is only just taking off. In-Stat/MDR
figures revenues collected by hot-spot owners and wireless ISPs in 2002 were
just $8.3 million and will hit $31 million this year. Some countries, such as
France and Italy, don't even let providers charge for Wi-Fi service, though
restrictions are on track to be lifted this year.

The math is hard to resist. It typically costs less than $1,000 to deploy a hot
spot that can accommodate about 10 users at once. That's only about
one-tenth the cost of providing equivalent capacity on a 3G network. End
users save, too. Downloading a 20-megabyte PowerPoint presentation over
3G could take nearly 20 minutes and cost $16, while over Wi-Fi it would take
about three minutes and cost just $2.50, figures telecom researcher Analysys in
Cambridge, England.

Besides the big telecoms, two dozen independent operators are elbowing their
way into the nascent business. Behind them are hundreds of airport authorities,
hotel chains, and even individual entrepreneurs, each running their own hot
spots. All this fragmentation can cause headaches for users, who often can't
roam from one hot spot to another and must confront widely different prices,
policies, and security protections if they do.

Yet with Europe's big telecoms now bearing down on Wi-Fi, the scrappy
business is likely to grow up fast. Just look at a pact struck recently between
TeliaSonera and Europe-wide Wi-Fi provider Megabeam, based in London.
The veteran and the startup have a roaming agreement that lets users from
either network log on to the other. Expect more such cooperation in 2003.
When the dust has settled, Europe could find itself once again at the cutting
edge of wireless technology. It's not quite the original 3G dream, but for
customers, it's likely to be a far better deal.

By Andy Reinhardt in Paris

http://www.businessweek.com/magazine/content/03_04/b3817166.htm

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