WiFi Hot Spots Future

InfoWorld has an article by Ephraim Schwartz who argues that WiFi hotspots will not survive – “broadband data over cellular networks will deliver the coup de grce.”

For a fresh insight, I turned to Randy Battat, president and CEO of Airvana, a mobile infrastructure provider.

Wi-Fi’s free spectrum and $100 access points have a lot of appeal, Battat notes. But the problem is that you need to get that wireless data to the wired Internet. A T1 line costs about $500 per line per month, depending on the distance to the ISP. How many T1 lines will be needed to offer decent service in a typical McDonald’s, which seats anywhere from 40 to 160 people?

“You’re certainly not going to have eight T1s so everyone can get 11Mbps performance,” Battat says.

On the other hand, the cellular networks, with their towers and base stations, are already in place. EvDO (Evolution Data Only), a new, high-speed cellular data technology, offers 300Kbps to 600Kbps throughput at the low end, with maximum performance rated at 2.4Mbps. Adding EvDO to an existing cellular network often means simply installing new cards in the base stations (and, yes, Airvana makes those cards).

The only companies in a financial position to lay out a nationwide Wi-Fi network are the cellular carriers, but with EvDO on the horizon, they have little incentive. Expect them to follow the lead of T-Mobile and market hot-spot service as a loss leader in order to win more subscribers for their cellular networks.

Cellular carriers will take over most subscriber-based hot spots and slowly kill them off, either by acquisition or through partnerships. If you find that hard to believe, think of Wi-Fi hot spots as you now think of pay phones on street corners.

He adds on the InfoWorld blog: “What I’ve been saying in my columns is basically that the wide area networks will, over time, become as inexpensive as subscribing to a hot spot…WANs are slowly but surely getting better. And given another year or two they will replace hot spots. Not Wifi. I think on campus Wifi is great. But off, if I want coverage everywhere, and I mean everywhere, then I have no choice but to use and subscribe to a wide area cellualr network…If anything, hot spots will help make the market for wide area. Consumers will be so pleased with the abilty to get on the Internet when at airports or certain restaurants they will naturally want more. WiFi not being able to give it to them will force consumers to look at other alternatives.”

Incidentally, Cometa Networks just announced that they are shutting down, according to Wi-Fi Networking News.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.