Magazine

Commentary: Why Wi-Fi Won't Rival Cellular Anytime Soon


By Andy Reinhardt

It's a classic Net-head vs. Bell-head battle. The Internet types see everything they love in Wi-Fi: It's radical, cheap, decentralized -- in short, a grassroots movement that threatens the Old Guard telecom world. Not surprisingly, the Bell-heads -- named for the old Bell telephone system in the U.S. -- see things differently. Sure, they're forging deals to add Wi-Fi to their service offerings. But they're not losing sleep over the danger it poses to their core business. In the Bell-head view, Wi-Fi is toy technology: chaotic, unreliable, and full of security holes.

Each side has a point. And each may be underestimating the other. But the Bell-heads will have the upper hand for the foreseeable future, in Europe as elsewhere. Despite lots of smart engineering already under way to improve Wi-Fi, it's nowhere close to matching the simplicity and sophistication of the phone network.

Just look at roaming. In the mobile world, a fantastically complex system of databases and electronic billing is completely hidden from consumers, whose handsets magically switch from one network to another as they move around. Not so for Wi-Fi, where going online from an unfamiliar hot spot is no easy feat. Wi-Fi will definitely siphon off some of the revenues the Bell-heads want to score from mobile data. But as long as users have to fiddle with Internet protocol settings and quirky, unpredictable connections, Wi-Fi will remain a niche occupied by the technoscenti.

None of this dismays Wi-Fi boosters. In typical tech-industry fashion, they're already waxing lyrical over the technology's potential to change the world -- and forgetting, once again, that just because something is cool doesn't mean it will appeal to the masses. For one thing, Wi-Fi isn't really a mobile technology: Its standards make no provision for handing off communication from one hot spot to another, so there's no way to support Net connections while moving around -- a key benefit of the cellular-phone system. No doubt, Wi-Fi offers unprecedented freedom and speed in getting online from a caf? or airport lounge. But from the back of a cab or when lost on a country road, the ubiquity of the cellular network is unequaled.

Perhaps the most questionable idea is using Wi-Fi for voice calls. To have any commercial appeal, Wi-Fi phones would have to support other mobile standards as well, such as GSM or CDMA, since customers will want to talk even when they're not in a hot spot. Such phones would be big, heavy, and power-hungry -- in other words, nonstarters. None of this is a strike against Wi-Fi, per se. It merely reinforces the idea that technologies should be used in ways that best suit them.

Why is there even a debate? The U.S.-dominated computer industry is pushing hard on Wi-Fi because leading companies such as Intel Corp. and Microsoft Corp. have power in that emerging business, while they are nearly shut out of the European-dominated cellular-phone industry. The computer giants see Wi-Fi as a means to carve out positions in mobile communications -- and their prospects in North America aren't bad, given the lower penetration of mobile phones there.

European mobile giants are taking a more pragmatic approach. From their position of strength in the cellular world, they're focusing on forging links between Wi-Fi and mobile systems -- in effect, neutralizing the threat by co-opting it. Swisscom recently bought Europe's largest independent Wi-Fi service provider, Britain-based Megabeam, and has now become one of the top two Wi-Fi operators in Europe. Nokia Corp. (NOK) offers a popular PC Card for laptops that supports both Wi-Fi and the latest-generation wireless-data services.

In the end, no single technology will dominate mobile communications. But if Wi-Fi is to make the transition from hot craze to serious tool, it's going to have to become more like the trusty old Bell system. Those Net-heads are going to have to keep burning the midnight oil. Reinhardt covers technology from Europe.


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