Sleeping Giant

Wireless LANs (WLANs) at airports, coffee shops and hotels seem like they have legs, despite a few growing pains. MobileStar ran out of beans before it could finish installing WLAN connectivity in the nation's Starbucks coffee shops. But similar companies are serving wireless data users, perhaps to the detriment of carriers' own wireless data efforts.

By focusing on the wireless data achievements of the top five carriers, the industry may blind itself to the threat — or possibility of collaboration — represented by the variety of services that also offer unwired connections to the Internet.

Within the past quarter alone, several wireless data services have launched. Many of these rely on WLAN technology — also known as 802.11b/a — to deliver unwired access at throughput rates that dwarf those available on public wireless data networks, such as AT&T Wireless, Nextel or Sprint PCS. Data rates for WLANs commonly are measured in megabits per second, rather than the kilobits per second 1X or GPRS networks offer.

What does this mean in practice? I've used the wireless data service offered by several major carriers. I used them a couple of times to check the weather report, once to locate a restaurant phone number and once, painfully, to check my e-mail.

Weather and restaurant information was easy. The e-mail thing — not so easy. But that's what I really needed. Instead of taking the 10 minutes required to set up my laptop, establish a connection and check my work e-mail from the road, I thought I'd try it from my phone. Until the throughput rate increases, I won't give it a second try.

I've given serious thought to a PCMCIA card for my laptop, though. By leaving the many wires and peripherals at home, the laptop realistically becomes more of a mobile data alternative than a bag of bricks slung over my shoulder.

PDA makers are hooking up with data providers left and right. Some of these partnerships involve the top five wireless carriers directly or indirectly.

For each extra layer in a business partnership, the price increases accordingly. Sony, for example, just lowered the entry price for subscribers to its new MYLO wireless data service (available on the Clie or laptops with a data card). This price reduction came almost immediately following Sony's launch of the service. Lowering the price of entry may attract more users. Monthly fees for MYLO, however, remain steady — from $59.95 to $79.95, depending on service class. Options for data service direct from wireless carriers can start as low as $14.95 per month in many cases.

One could argue that multiple data options simply create greater overall customer awareness and that carriers, WLAN providers and companies such as Sony all will benefit in the long run.

That argument may work for Sony. But it's hard to compete with free. Some WLAN networks are fully subsidized by technology partners and other entities.

Now through Nov. 18, British Airways passengers can access Internet services at New York's JFK Airport via wirelessly-enabled Compaq iPAQs. The PDAs are available for free from service desks in the First and Terraces lounges.

Any wireless data service — if sold by the byte, by the second or at a monthly flat fee — is more expensive than free.

The return on such a subsidy can be publicity and popularity for the new service. My contention is that consumers will begin associating these brand names with the concept of easy-to-use wireless data service — first, because it is free, and second, because it works well.

As travelers spend more time working while waiting in airports, they will get accustomed to the lickety-split 'Net connections available there. Surfing at 9.6kb/s on a monochrome screen never will be the same.

As those subscribers realize their carriers can't — or won't — deliver affordable high-speed data access, they'll shop around. They may not find the answer at a Starbucks anytime soon. And LaGuardia or O'Hare isn't going to replace Cingular or Nextel. But there was a rumor that a small computer company by the name of Microsoft just might be bidding for MobileStar's network equipment. Now that would be interesting.

Comments? Write to cgoldman@primediabusiness.com.