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Chris Gilbert, CEO of IPWireless, is loath to admit that service providers using his company's 3G-based wireless broadband data technology might actually be in competition with Wi-Fi hotspot operators. He'd rather dwell on how the two wireless technologies can complement each other -- which they certainly can. Gilbert is a good-news kind of guy.

He finally caves, though, when we ask what happens to Wi-Fi hotspot providers in an area where an IPWireless operator is offering service with ubiquitous, cellular-like coverage? This is exactly what AtlasONE, a start-up and relatively new IPWireless customer in Malaysia, is planning to do. It's one of several around the world.

"At that point," Gilbert admits, "you're dead. If you're a [Wi-Fi hotspot operator] and an AtlasONE comes along, you're going to feel very sorry for yourself."

Could IPWireless and other vendors with broadband wireless equipment based on mobile technology drive Wi-Fi out of the public access market? That's a definite possibility, but not this year and probably not next.

The IPWireless TD-CDMA (Time Division - Code Division Multiple Access) technology is based on UMTS (Universal Mobile Telecommunications System), the 3G mobile telephony technology to be rolled out in Europe and other parts of the world. According to IPWireless, it can deliver up to 25 Mbps to each cell.

The IPWireless radios operate on various sub-3-GHz spectra depending on jurisdiction -- 1.9 in Europe, 2 in New Zealand, 2.5 in Malaysia and the U.S. The client devices, which have a range of up to 18 miles, are available now in PC card format or as a USB external device, and will be available next year in PDA-friendly formats, Gilbert says. They work in buildings and are customer installable -- so no truck rolls.

Service providers can offer different tiers of service -- 128 or 512 Kbps, 1, 1.5, 2 Mbps. Dallas-based Clearwire Technologies, one of six IPWireless-based operators currently offering commercial service, charges $50 a month for a residential service it says is "up to 18 times faster than a 28K modem" -- 476 Kbps by our calculation -- and $80 for a service it says is 27 times faster, or 756 Kbps.

The advantages over Wi-Fi (for public access) are, if you're a Wi-Fi operator, a little disturbing. Ubiquitous coverage is number one. Second, an IPWireless network uses the same SIM card-based authentication system as GSM mobile networks for strong but -- unlike Wi-Fi -- transparent security. (Plus, easy integration for global roaming.)

Add to that the fact that Wi-Fi-based public access providers must pay for backhaul -- at the least they need DSL service from each hotspot -- while the IPWireless operator does not because the wireless network itself provides most of the backhaul.

Of course, much depends on ubiquitous coverage, and that doesn't come cheap. Gilbert estimates that to cover Germany, for example, would cost $300 to $400 million. Malaysia would cost $225 million. To cover the U.S. (leaving out sparsely populated rural areas) would cost somewhere between $1 and $2 billion.

In a down economy, that should give even the heaviest hitters pause for thought, but IPWireless claims the technology provides even smaller, local and regional players unbeatable economics.

"We think the business case for operators doing residential service where they could also offer voice service [using the same bandwidth for backhaul or mobile telephony] as well as the data service is that they'll end up being cash flow positive in two years," Gilbert says.

This is not just theory, he insists. Some of the existing commercial service providers have been up for almost that long and are getting close to break even. The club includes Walker Wireless in New Zealand, Maui Sky Fiber in Hawaii, OneWest.net in Jackson, Wyo. -- and now AtlasONE in Malaysia.

Gilbert hints that IPWireless may now be talking to heavy hitters in North America capable of ponying up the cash to do something on a larger scale, but won't say anything definite. In the meantime, AtlasONE is the one to watch.

The company is well funded -- most recently with a $100 million loan announced from the Islamic Development Bank (IDB) of Saudi Arabia. That will pay much of the estimated $225 million project costs. AtlasONE aims to have 500,000 paying subscribers by 2005, Gilbert says.

If that sounds pie-in-the-sky, consider that the Malaysian government, like others in the region, is intent on keeping the country ahead of the technology curve. The government's plan calls for 7.5 million of Malaysia's total population of 22 million to be hooked into broadband data networks by 2005. In light of that, AtlasONE's aspirations are reasonably modest.

Right now, the company is concentrating on the Klang Valley region, the most industrialized part of Malaysia, which takes in the capital city, Kuala Lumpur. AtlasONE has already deployed 60 cell sites and has on order equipment to build 500. That's what it will take to cover the Klang.

"We're talking about a big cellular network here," Gilbert says. "The Klang Valley will give them a third of the number of users they're aiming for. And then they'll go ahead and do Penang [Province], then move into Johor in the south. It's the beginning of a nation wide roll-out."

Subscribers will be able to access the Internet, or their corporate networks, at broadband speeds -- virtually anywhere they go in the country. They won't need Wi-Fi hotspots.

Gilbert still insists that Wi-Fi and IPWireless are complementary technologies, though. Wi-Fi will still have a place in building, where it would be cheaper for users than using an IPWireless wide area service. He predicts there will be dual-mode Wi-Fi/IPWireless PC cards by next year.

Wi-Fi will also still have a place in the home. Gilbert talks about a company currently building a Wi-Fi wireless gateway with a slot for an IPWireless PC card. A home or business could set up one of these devices virtually anywhere in a building, pull in Internet access from the IPWireless wide area network and distribute it inside over a Wi-Fi WLAN.

The next step for IPWireless, he says, is getting the client device into chip form for integration into laptops -- a la Centrino -- and other devices, including high-end digital cameras.

Why digicams? The camera could automatically transmit pictures over the air to a mass storage site anywhere in the world. "That way," Gilbert says, "you'd have infinite memory."

Of course, you could also do this with Wi-Fi, which is here today.