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Speaking in Cannes this week at the 3GSM World Congress, Tommy Ljunggren, co-founder of the Swedish analyst firm Northstream, urged 3G operators not to look on technologies like public wireless local area networks (WLAN) as a danger.
"In our view the idea that WLAN would replace 3G is simply not true. Replacing 3G with WLAN would be like attaching a motor to a bicycle and calling it a motorcycle," Ljunggren said.
Public wireless local area network services typically use 802.11b technology to let users connect laptops and PDAs to their Internet service providers or company intranets for fast access, usually in public places. The services are already becoming available in airports, hotels and cafes in Europe, and according to research from Analysys these public networks will be pulling in 20 million users and EUR3 billion in revenue across Europe by 2006.
Analysys research published last August argued that WLANs pose a "significant threat" to 2.5 and 3G operators, since according to its estimates around 10 percent of 2.5/3G subscribers will also make use of public WLAN services by 2006. That means mobile operators could lose up to 10 percent of their data revenue to public WLANs.
But Northstream insists that the two technologies will and should co-exist, and argues that in its view, public WLAN is actually more expensive than 3G if used for wide area coverage.
Northstream also pointed out that the existing WLAN market and technology are still immature, with mostly small companies working with limited resources, coverage and customer relations. This means existing mobile operators are probably best positioned to take advantage of public WLAN, which Ljunggren said should continue to be deployed for coverage in public hot spots like airports.
"Public WLAN in combination with 3G and GPRS can increase both customer satisfaction and total usage, raising revenues for mobile operators," Ljunggren said. "Public WLAN is definitely not a 3G killer, but has great potential as a 3G helper."
Northstream also urged operators to better educate their own staff about GPRS services, the so-called 2.5 generation of mobile. Although availability of handsets and subscriptions for GPRS is picking up, Northstream said the operators still seem confused about how to wrap up the technology and make an attractive offer to consumers.
Bengt Nordstrom, CEO of Northstream, said that the small number of people who now have access to GPRS don't know what to do with it, and said it was up to operators and handset makers to train their own staff to "preach the GPRS gospel."
Enthusiastic take-up of the fast mobile services offered by GPRS will be essential for paving the way for 3G, Northstream said.
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