Companies' mobile data access strategies will give a massive boost to Wi-Fi hotspot use in 2004

Rethink IT, May, 2004

Usage of Wi-Fi hotspots may remain low, but an explosion is expected during 2004 as enterprises start to incorporate public wireless Lan into their networking strategies in earnest.

Three trends will accelerate this--the rise of wireless voice over IP services; the integration of cellular and Wi-Fi services within one bill and service agreement from leading providers like T-Mobile; and the improved data access and security facilities provided by aggregators. All of these enable companies to reduce costs, as they seek to cut back on cellphone spending while keeping their roaming workers connected to corporate data, thus boosting productivity and communication.

The aggregators are playing a vital role. They offer corporate subscriptions that provide authorized employees with client software--including consistent sign-on and security features like VPNs--that enables them to use Wi-Fi facilities at a large number of hotspots worldwide. The aggregator does not build or own these locations itself, but resells access to a collection of different networks run by third parties. To the customer, however, the user interface is the same at all hotspots, corporate security policies are automatically supported, and the company receives a single itemized bill for all usage.

Recent events have swung the balance of power in the US hotspot market away from the self-build companies and towards the aggregators. This was highlighted by the pre-Christmas decision by T-Mobile, the owner of the world's largest hotspot network, to back away from its build-only strategy and roam (share networks) with aggregator iPass. This suggested that the aggregators' model is proving the best placed to reap rewards from the public WLan sector.

The main players are iPass, GRIC, Boingo Wireless and Fiberlink, all US-based but operating internationally.

Gartner Group believes aggregators providing managed services to enterprises will be critical to increasing uptake of hotspots, predicting that the number of public Wi-Fi users will grow from 9.3m last year to 30m by the end of 2004.

Over at Meta Group, analysts have been ranking the leading aggregators. It picks out iPass as the best of the bunch, partly because of its T-Mobile deal. iPass is the best known among Meta's corporate customer base and its strengths, says the report, include a broad geographical reach; and advanced client capabilities, especially in terms of offering many access options from Wi-Fi to ISDN, and of security features including 802.1x support.

Second comes GRIC, which Meta rates as having the highest Class A hotspot coverage and the most aggressive strategy. A partnership with AT&T Wireless, bundling of wired and wireless services and strong security are other plus points.

GRIC's TierOne Network--like most aggregators, targeted firmly at corporate subscribers, to which it offers value added services such as client software and VPNs--now spans 150 countries. About 25% of its locations are wireless, with 6,642 live hotspots and 2,900 more in production. About one-third of the GRIC wireless access points are in hotels, almost half in restaurants and the company is present in 230 airports. About 60 wireless service providers partner with the aggregator.

In third place comes Fiberlink, which provides remote access and managed VPN services to large companies and last year expanded into Wi-Fi with a partnership with Boingo. This means that Fiberlink can offer the same coverage as its ally, but also a wider range of bundled services including managed VPN and broadband, and the most customizable of the software clients.

Finally, Meta looked at Boingo, which falls down in the enterprise by being a pure-play Wi-Fi aggregator and not offering additional services. Although it has been aggressive in building its network, it has a far greater concentration of hotspots in Class B or Class C locations than its rivals, and therefore fewer in the Class A areas such as airports and business hotels. Meta believes its software client has fewer security features than others, although it has the strong point of the ability to detect listed hotspots.

All the aggregators are continually trying to enhance their services, particularly for the large enterprise client. In the same week that GRIC announced its expanded hotspot roll-out, iPass introduced prepaid services and Fiberlink announced client software that supports 3G and Wi-Fi simultaneously--a step likely to be echoed by T-Mobile in the near future.

Meanwhile, Fiberlink has announced a remote access client that integrates 3G, dial-up, broadband and Wi-Fi. Extend360 with the newly added 3G support is being rolled out to customers such as CSC. It incorporates patent pending technology called Active Transport Notification, which scans the user's environment and detects the access modes available, presenting the choices to the user in one user interface.

The iPass prepaid service is called Simplifi and offers users a single account for any iPass wired or wireless access point, plus for voice calls. Eventually, it will also offer VoIP. The service is aimed mainly at individual business travellers whose companies do not have an aggregator account. However, although it offers pay as you go facilities, it is very expensive at about $15 an hour in the US, compared to $6 an hour or $9.99 per day on a hotspot belonging to iPass partner T-Mobile.