WI-FI: Wi-Fi(re) Flares Up

One of the most significant events in the context of wireless was the launch
of Intel Centrino in March 2003. An intelligent bundling of the Pentium M
microprocessor and the wireless network connection that really helped untether
the laptop from shackles of the desk. Estimates suggest that nearly 30 percent
of the laptops selling in the country are Centrino powered; globally the number
is higher at about 50 percent. Developed for use in homes, Wi-Fi-or the
wireless standard 802.11-has in the last year grown in popularity among the
corporate users. According to a study by AT Kearney, the global Wi-Fi equipment
revenues are expected to grow at a CAGR of 20 percent between 2003 and 2007.

A survey conducted by Morgan Stanley in February 2004, among 225 Fortune 1000
CIOs, places WLANs only behind security as far as spending priority in network
equipment is concerned. WLANs ranked a notch lower among the CIOs in a similar
survey conducted in November 2003. US-based Radicati Group expects the worldwide
usage of Wi-Fi to grow from 42 million users in 2003 to 609 million in 2007.

Security: A Non-issue Now

Since the actual target market for Wi-Fi was the home market, security was a
much lower priority for the developers. Corporate users, on the other hand,
demand a higher level of security, so much that no network today can be termed
as absolutely secure. The Wi-Fi Alliance, a non-profit international association
to promote interoperability among 802.11 equipment manufacturers, in a paper
said that the threat from improperly secured WLANs is a real and present danger
for today's enterprises. However, the paper continues, the good news for
enterprise managers is that there is a range of strong, vendor neutral solutions
available that addresses the vulnerabilities inherent in the original 802.11
security implementation.

With new security standards emerging, there is a marked increase in
confidence among CIOs regarding the deployment of WLANs at their organizations.
This confidence in the technology was seen by the hectic activity on the WLAN
front back home too. The Indian market for WLAN products grew from a miniscule
Rs 12 crore in FY 2002—03 to Rs 51.5 crore in FY 2003—04, clocking a
whopping growth of 329 percent, as reported by VOICE&DATA. Skeptics may call
it unrealistic, as the base is rather small. However, it is an augury of things
to come.

The last year also saw large-scale deployment of some sort of wireless by
companies across sectors. The wireless penetration touched 26 percent this year,
up from a meager 12 percent last year among the top IT spenders in the country
as reported by the DQ-IDC India Survey: Megaspenders 2004 (see Dataquest, 30
April 2004). The Indian CIO community was equally gung-ho about Wi-Fi for the
year ahead. The second installment of Megaspenders 2004 said, "More than
one-third of the CIOs surveyed are looking at deploying some form of Wi-Fi in
the year ahead. That's a marked increase from the responses last year. In a
similar survey last year only 22 percent of the CIOs said that they would look
at some form of Wi-Fi." (See Dataquest, 15 May 2004.)

This activity, to a large extent, is also explained by the fact that the
rapidly falling prices of WLAN equipment has put the technology within reach of
the smaller companies too. Not the case a few years ago. And as a consequence, a
number of SMEs have deployed WLANs as their primary networks and not just
extensions and complements to their existing wired networks.

Public Hotspots

Hotel lobbies and business centers, airport lounges, convention centers,
universities, coffee bars, and even homes boast of being hot today, globally and
in India too. Jiwire.com, by far the most comprehensive hotspot locator on the
Web, says that there are nearly 44,000 public hotspots across the world
presently. This number is expected to swell to 477,000 by 2007, projects
US-based research firm Radicati Group. And it is by the same time that the
number of Wi-Fi users globally is expected to cross 350 million, estimates
Pyramid Research.

The market segment that seems to be at the forefront of adoption is the
hospitality segment, consisting mainly of four and five star hotels followed by
coffee bars. In the US just about 1,000 hotels offered Wi-Fi in 2002, the number
today stands at over 5,300 and is expected to swell to 25,000 by 2007.
Presently, the number of hotels Wi-Fied across the globe is 11,490. Feels
Mangesh Kolhatkar, director solutions marketing, Pronto Networks, "The
addressable market only in the four and five hotels is about 800
properties." Some estimates suggest that around 200 of these are already
lit up. But quips Kolhatkar, "Only about 50 are really functional, the rest
have Wi-Fi so that they can check one more box in their marketing
collateral." "But now, more and more of these hotels are coming
forward to deploy networks that can offer real service," he continues.

A well-known network of hotspots is the one operated by T-Mobile. It covers
all Starbucks coffee bars in the US. McDonald is joining the bandwagon too.
About 6,000 of its outlets in the US will be lit up by the end of next summer.
Closer home, Barista Coffee has also Wi-Fied a number of bars working with Tata
Teleservices. Tata Teleservices will deploy hotspots in all the 130 Barista
cafés over a period of time. The operator has already deployed it at ten
locations and is likely to cover 30 more by the end of the year. Tata
Teleservices is also looking at setting up another 300 hotspots by the end of
the year. Intel continues to extend its support to the Wi-Fi revolution and had
announced that it would establish 1,000 hotspots in the country by the middle of
this year. Bharti Infotel also announced the launch of its Wi-Fi services over
DSL in the states of Delhi, Haryana, Tamil Nadu, and Karnataka. The company is
looking at taking the Wi-Fi network public in its second phase, after a certain
customer base stands established. So it comes as no surprise that Bharti is
working very closely with Intel to promote the adoption of newer technologies
and develop applications for wireless. (See box item: Think Business
Applications.) And then of course, the government has taken notice too. While
the 802.11b has been de-licensed for indoor use, the government is looking at
extending it not only for outdoor commercial use but also for the 802.11a and
the 802.11g standards.

Wanted: A Business Case

In spite of all this action, the one aspect that has lost out is a sound
business case. Public hotspots may be a rage but the cash register for the
service providers has not yet started to ring. Anecdotal research suggests that
the Starbucks coffee shops have seen an increase in business as customers are
attracted to it throughout the day and tend to stay longer, for about 45
minutes, as opposed to the average stop of 20 minutes.

But the real translation into revenues for the service provider still looks
like a distant goal. "Wi-Fi hotspots will remain more froth than
substance," says a recently published report by Deloitte Research. Titled
'Mobile and Wireless Predictions 2004,' the report adds that operators, and
any other party considering deployment of Wi-Fi hotspots, should study the
business case for Wi-Fi hotspots vigorously.

"With all the hype today about the rollout of hotspots, it's as if the
dotcom boom and bust never happened," Lars Godell, senior analyst,
Forrester, comments. In fact, just the basic constraints, viz., the number of
devices in use and users' unwillingness to pay a significant amount for
Internet access on the go will limit public WLAN users to numbers well short of
planned networks' carrying capacity. Additionally, the sky-high costs of
providing Internet backhaul from hotspots will kill many hotspot business cases,
he adds. 

A glaring example to this effect was the suspension of operations by the
AT&T-, IBM-, and Intel-funded Cometa Networks, which erected and managed a
network of public hotspots across the US. Reason for suspension: "The
financial return for investors was not perceived to be sufficient to attract the
necessary capital," said a company release on its website.

There is no denying the fact the hotspots will open the floodgate of
possibilities to create segments-of-one to market goods and services, but the
biggest hurdle to adoption on the user front is the penetration of Wi-Fi-enabled
devices. And, till critical-mass penetration of such devices is achieved, a
question mark on the viability of hotspots shall continue to hang.

Mohit Chhabra

Think Business Applications

A leading US telecom equipment manufacturer was working at improving the
effectiveness and responsiveness of its field service staff. With the sale of
its equipment the company also entered into a service delivery contracts with
its customers. If the equipment led to downtime longer than that specified in
the service level agreement (SLA), the company was liable to pay its customers a
penalty. In order to ensure that the penalties were minimized, and the SLA
conditions were met, the company had 350-strong field staff.

So whenever a fault was reported, the team closest to the location was
dispatched to fix the problem, which reached the location without an
understanding of the problem at hand and without the requisite spare parts. This
led to an additional delay in fixing the problem. To address and resolve the
problem, the company equipped each of the field staff members with a wireless
device. The device not only alerted the team member about the fault but also
about the status of the problem and the exact nature of customer request. This
helped the company not only improve communication but also improved inventory
tracking and communication of assignments.

A similar application implemented by the US military helped it to: cut the
average pick-up time for a spare part from 26 to just two hours, better
inventory management, and save $14 million.