Quicker Embrace of GSM Would Help Stateside Wi-Fi

We seem to need pager alerts these days to keep up with competition in the Wi-Fi hot-spot space.

Yesterday, just a week after Wayport announced a retail partnering program that challenged T-Mobile USAs dominance among retail hot spots, T-Mobile countered with an aggressive move into Wayports bread-and-butter niche, the travel and hospitality sector.

T-Mobile lit up service at the Hyatt Charlotte in North Carolina on Thursday morning and announced that it will unwire Hyatt hotels in Columbus, Ohio; Chesapeake Bay, Md.; and the Grand Hyatt hotel in New York City within weeks. The company promises to deploy hot spots in most of Hyatts 200-plus hotels by 2005.

Wayport last week rolled out its Wi-Fi World, an ambitious program packaging a network of partnerships and managed services pegged to its efforts to unwire McDonalds restaurants.

But Wi-Fi World is more than just a deployment plan for McDonalds. Its Wayports ticket into hot-spot deployments in restaurants, truck stops, stores, shopping malls and other retail venues.

/zimages/7/28571.gifClick hereto read Carol Ellisons take on Wayports Wi-Fi World program.

Now comes T-Mobile and its new partnership with Hyatt. This is shaping up as a battle of the titans. Given the speed at which both companies are expanding their footprints in the competitive hot-spot space, the two are looking more and more like the last left standing in what has become one of the industrys bloodier competitions.

Last month, Cometa Networks, a joint venture of AT&T, IBM and Intel, joined the league of high-profile providers that have shuttered their operations in the face of rising costs and diminishing revenue projections.

A recent report from the Wissenschaftliches Institut für Kommunikationsdienste (WIK, which translates to the Scientific Institute for Communication Services), a leading research firm that tracks the telecommunications industry in Germany, suggests that fallout in the provider space may be nearing an end.

Next page: The convergence factor.

Convergence

WIK notes that mobile network providers in Germany already own “a large pool of customers and cover all segments of the value chain including roaming and billing services.”

Its report foretells that the winners will be those who can master the convergence of public WLAN with UMTS (Universal Mobile Telecommunications System)/GSM (Global System for Mobile Communications) mobile-phone service, by offering customers bundled mobile services that embrace hot-spot and mobile-phone service alike.

The enabler for the feat, WIK predicts, will be the SIM (Subscriber Identity Module), already used in GSM phones in Europe to resolve billing as users roam from one mobile network to another.

It would certainly simplify matters if the same phenomenon could be duplicated here in the United States. But were not as far along the convergence path as our European friends.

SIMs have been put to work in Europe to solve the triple-A dilemma—authentication, authorization and accounting—that clouds the expansion and public acceptance of hot-spot service on this side of the pond.

AAA is the means through which users are authenticated—using passwords, biometrics or, in the case of SIMs, digital signatures—and authorized to use a mobile network. The accounting portion resolves the way in which billing is reconciled so that customers receive a single bill for all charges across networks.

The WIK report gives a good picture of what is happening in Europe. But unfortunately, AAA is still an issue on this side of the Atlantic, partly because of our slow embrace of GSM technology and its SIM-based identity mechanism.

Thats where WIKs conclusions for Germany and Europe begin to depart from realities here. The report goes on to cite other key stakeholders in the hot-spot space, including resellers and venue owners.

It suggests that “resellers pursuing complementary business models … will presumably only be successful at those hot spots which will be profitable due to strong demand.”

But Im not ready to throw the reseller out with the dishwater. WIKs conclusions are based on an assumption of a one-to-one relationship between the reseller and the venue thats tied to hot-spot service alone. But theres really a network of relationships at play.

Next page: The iPass experience.

iPass Experience

Consider iPass, one of the premiere resellers of hot-spot service. iPass counts both T-Mobile and Wayport as partners and resells their services, along with many others, through its aggregated network of about 350 networks that serve nearly 10,000 hot spots.

It adds the value of having signed many roaming agreements with providers, allowing iPass to act as an AAA clearinghouse for its partners.

/zimages/7/28571.gifClick hereto read about a hot-spot pact between T-Mobile USA and iPass.

The company authenticates users, consolidates billing charges and provides secure access, including VPN encryption, back to the corporate network.

Clients access any of its partner networks via software that resides on their device. The software adds extra measures of security on the client device, including personal firewalls and anti-virus protection.

/zimages/7/28571.gifClick hereto visit the Ziff Davis Channel Zone for more news and insights about partnering.

Anurag Lal, vice president of strategic services and business development at iPass, described the companys value proposition in simple terms: “We handle all the ugly plumbing that most users probably dont want to worry about.”

iPass business model is pegged to the enterprise, but it downsells services through its own reseller network. Those resellers, in turn, typically aggregate the iPass service within a larger managed service offering that they provide to their clients.

So, the question from this side of the Atlantic is not whether hot-spot business opportunities for resellers will disappear. Its whether they will live up to the hype. Of course, its the nature of hype that the realities never live up to the promise.

But hot spots do help resellers who follow the model of making them part of a managed-services offering, by providing a fuller complement of services with which to attract new business.

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