Wireless LANs could kill 3G dream

LONDON (FTMW) - Forget the promised land of 3G and Bluetooth, the dream of mobile broadband Internet is already on our doorsteps.

The cost of entry to this remote nirvana is simply access to a wireless LAN. The technology has the potential to change the rules for telecom operators around the world.

Wireless LANs currently enable you to access the Internet from your computer at a rate of 11 Megabits per second (Mbps), compared to the maximum forecast rate of 2Mbps for 3G and 712 kilobits per second for Bluetooth.

Charles Muirhead, founder of Orchestream and currently raising a second round of venture capital for his new company Interprovider, has installed a wireless LAN in his office in South Kensington.

"If people start getting used to these high speeds and then the telecom operators start selling 3G at a max of 1Mbps, people are not going to be particularly impressed with 3G because they will have been used to higher speeds. The big operators are just not sure how they should respond to the Wireless LAN dilemma," said Jan ten Sythoff, wireless programme manager at Frost & Sullivan in London.

In the U.S., MobileStar has been the leading provider of high-speed wireless broadband Internet access and expects to have implemented wireless LANs in around 8,000 sites by 2003.

Starbucks [US:SBUX] chose MobileStar to install this technology in its coffee shops and, with over 500 locations already connected, thousands can now order their skinny lattes and high speed Internet connections simultaneously.

Hotel groups, airports and any venues that want to capture travelling businessmen are now scrambling to offer this service.

Scandinavia leads

So far there has been no stampede in Europe, thanks to the $100 billion invested in 3G technology and regulatory issues that have prevented companies exploiting the 2.4 gigahertz radio frequency band that wireless LANs use.

"In the UK it is illegal to offer wireless Internet access in public spaces because of interference issues and parties with vested interests who are using the 2.4 gigahertz band and who do not want to have their services compromised by competing services. These laws are being reviewed, but the earliest they are likely to change is the middle of next year if the authorities choose to change them," Mr. Sythoff said.

Since 3G licences were offered for free in Sweden and Finland, it may be no coincidence that Sweden's Telia [SE:000066792] and Finland's Sonera [DE:931213] have emerged as the leading European companies installing wireless LANs across Scandinavia.

Bluetooth v WiFi

In the battle between technology that emanated from the US computing industry (wireless LANs) and European telecom technology (3G and Bluetooth), the smart money is betting on wireless LANs to win.

Over the last month, both Intel [US:INTC] and Microsoft [US:MSFT] have joined WECA, the wireless Ethernet compatibility alliance created to promote a global wireless LAN standard (802.11). This standard has also become part of Windows XP, Microsoft's latest operating software.

Critics claim that roaming and security issues may prevent wireless LANs from reaching critical mass. However companies such as iPass and Luxembourg-based Excilan are aiming to provide new standards to ensure that global ones emerge as quickly as possible.

In the meantime, 3G operators have no time to lose and everything to fear.

Robert Norton is a founder of now defunct health and beauty website clickmango.com. He's a former journalist for Reuters.

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