RealTime IT News

Wi-Fi an evolutionary step to 3G?

Travellers passing through both the international and domestic terminals at Brisbane Airport can now access the Internet through 802.11b following the launch of this new service by Optus last week. The first of many new hotspots to be launched this year, it signifies an important location in the enduring land grab for prominent sites around the country.
Overall, Optus has pledged up to $10 million to rolling out 500 hotspots nationwide within 18 months, targeting airports, main-street cafes, convention centres, hotel rooms and other locations demanded by their corporate customers.

"We think that once it gets traction in the business community it will start to flow on to the public"
says Mr Allen Lew, Managing Director of Optus Mobile whose division is driving Optus' Wi-Fi initiative.

In what can be been seen as a natural fit, Optus Mobile has picked up Wi-Fi instead of the company's ISP divisions. Although having synergies with Optus' GSM mobile service, Telco industry insiders claim that this was a win for the mobile division as they were best positioned to pay for the necessary investment.

Wether the mobile division is going to launch last mile services (potentially in competition with its Internet services) or go beyond key strategic locations is still doubtful.

According to Mr Lew,

"Obviously the Wi-Fi technology opens up a lot of other areas for us. Whether we can do this in a regional or suburban area remains to be seen"

A Test Ground For Mobility Services

Wi-Fi is a much simpler mobile enabling technology to roll out compared to 2G and 3G mobile networks, and for Optus, Wi-Fi has been a relatively low cost entry point into high-speed wireless data services. According to Optus, Wi-Fi is playing an important role in determining the demand for these services and consequentially determining if it's worth investing further in pervasive high-speed mobile data services such as 3G.

"It's an evolutionary process toward 3G" says Mr Lew,

"Optus Wireless connect gives us a feel for really how much demand there is out there for mobile data services"

Optus is taking the cautious approach when it comes to 3G. A further example of this is the recent launch of Video MMS, which is also being used to test demand for mobile video applications, believed to be an important driver for 3G phones.

Mr Lew believes it's not just the demand side but also the supply side factors hindering the roll out of 3G. He believes the industry will finally come together by mid 2004, where he expects attitudes will change and more resources will be dedicated to next generation networks.

"If you look at the manufacturers of mobile equipment, both infrastructure and devices, 95% of their R&D effort is still going into 2G networks" according to Mr Lew.

He further adds,"Its doesn't make sense for operators like us to invest in 3G technology, the handsets will be very primitive, the applications wont have the support of the developers and hence we would be ahead of the technology curve and that would be a waste of resources."

In some ways this was a predictable conservative response from Optus who have demonstrated in the past that they are happy to be a quick market follower.

Optus expects the 3G momentum to increase by mid-2004 and sees itself launching a service late 2004, early 2005. A trial service running in Sydney is planned from July to December of this year.

Growth expectations

Optus has high expectations for increased market share in the business mobility market over the next 12 months, sighting the gap between its overall market share and its share in business mobility. Despite being in negotiations with numerous hotspot start-up players, Optus is expecting Wi-Fi growth to come organically, at least for the time being.

According to Mr Lew, Optus is talking to Azure and a whole range of other providers about hotpot roaming arrangements. However Mr Lew indicated that currently there was no need for Optus to make any acquisitions in the same way Telstra did last year with Skynetglobal.

Reprinted from