Saying Oui To Wi-Fi

Despite a unified currency and a European parliament, when it comes to Wi-Fi
Europe remains a patch-work market. In the case of Wi-Fi, it’s mainly because
of differences in national regulatory policy.

The Scandinavian countries were first and fastest out of the gate, followed
by the UK and Germany. Now France, which only officially removed regulatory
barriers to Wi-Fi hotspot operators in December 2002, is off and running.

France Telecom, the country’s
incumbent (and largest) telecom provider and owner of Orange cellular/PCS companies
in France and other European countries, jumped into the race earlier this year,
announcing a major deal with Accor Group to put Wi-Fi in 1,300
of Accor’s hotels around the world.

More recently, Orange announced a major deal with Air France to put Wi-Fi hotspots in the airline’s
frequent flyer lounges around the world.

"If you compare France to the U.S., we’re late, yes, certainly,"
says Yves Tyrode, director of data marketing services at Orange France. "But
if you compare us to the UK and Germany, it’s not really the case. You have
to check the number of customers and the number of sites at the end of this
year."

In other words, France Telecom intends to make up some ground on its European
rivals — er, friends. If any company in France can do it, this is the one,
says Amy Cravens, a senior analyst with In-Stat/MDR in Scottsdale AZ.

"France Telecom is really the first company in France to have a larger
strategy and initiative," Cravens says. "They’re very focused on the
business traveler. But there are also a lot of smaller players doing cafes and
other retail."

However, France Telecom’s strategy isn’t particularly unique. Most of the Wi-Fi
activity in France appears to revolve around travel venues. Passman,
a Paris-based systems integrator, announced a new turnkey Wi-Fi hotspot offering
for the hospitality industry in May.

Passman, which provides non-wireless networking and systems services, already
includes major hotel chains such as Holiday Inn, Marriott, Best Western, Kyriad,
Suitehotels, Novotel and Mercure in its customer list.

It’s not just Wi-Fi hotspots. In June, Appear Networks, a Franco-Swedish wireless
application developer and systems integrator, demonstrated an innovative application
that will allow recently landed aircraft to automatically transmit technical
data over a Wi-Fi network to technicians on the ground carrying tablet or hand-held
PCs.

France also boasts a few Wi-Fi hotspot start-ups that are surprisingly well
established given how recently the regulatory hurdles were removed. Kast
Wireless
, for example, has hotspots in more than 60 French towns and cities
and a handful of other European cities. Most are in airports, hotels and conference
facilities.

TLCMobile is going after exactly
the same target market — business travelers — and venues. It says it will
have 600 up and running by 2005. WiFiSpot,
which is focused on the hospitality industry, has seven hotels up and running
in Paris so far.

But it is clear that France Telecom intends to be the market leader. The Accor
deal alone makes it a major player by any standards. It will make Orange the
leading Wi-Fi provider in France, with the largest network of hotspots deployed
by the end of 2003, the company says.

As of early June, Orange already had 25 hotels up and running and expects to
have 400 in total by the end of this year — 100 more than it was forecasting
when the deal was first announced. The remaining 900 will be installed in 2004.
The total is also up from the 900 mentioned in the original announcement.

Orange is installing Wi-Fi in the hotels’ conference and meeting rooms, public
areas and in at least 25 percent of the guest rooms. It’s using mainly Cisco
networking gear, although the access points are made by an Asian Cisco OEM.

In the hotels that are up and running, the service is free for now, while the
company tests its market. Tyrode expects to go commercial by September.

The Air France deal will see Orange install 17 lounges this year, starting
with major airports in France. Another 54 will go live next year, including
important sites outside France such as JFK in New York and Tokyo’s Narita Airport.

In keeping with its tight focus on business travelers, the company is unlikely
to expand out of the lounges into other areas of the airports, Tyrode says.

While there is apparently still a possibility that Air France will either give
the service away to its best customers or provide it at a discount, airport
and hotel hotspots users will be Orange customers, and will be able to use all
Orange hotspots.

They’ll pay about $15 for two-hour and $50 for 10-hour prepaid packages. There
will also be monthly subscriptions and discounted bundled deals for GPRS and
Wi-Fi service. Orange eventually plans to offer seamless roaming between GPRS
and Wi-Fi.

The company will also offer bundled deals in association with ISP Wanadoo,
a 70-percent owned France Telecom subsidiary that provides high-speed residential
access using ADSL. High-speed customers will be able to buy bundled hotspot
service at a discounted rate.

Orange is involved in a new roaming initiative with other French cellular/PCS
companies that offer hotspot services. Under the deal worked out with SFR
and Bouygues Telecom, customers will be
able to use hotspots owned by any of the three providers. The three will open
the association to other hotspot operators as well, Tyrode says.

"We want French customers to have access to as many sites as possible,"
he says. "If we want [Wi-Fi] to be a success, we need to offer the best
possible coverage."

Orange meanwhile is working on its own on roaming agreements with foreign service
providers — including U.S. aggregators, Tyrode implies. Some will be signed
as early as July. The company is anxious to have deals in place for the expected
September kick-off of commercial service.

Even without roaming agreements, though, Orange will have more to offer than
most in France. The company is nothing if not ambitious. "We think that
by the end of the year, we will have a very high market share," Tyrode
says.

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