The Ruckus Room

London: The New Wi-Fi Capital of the World?

An annual RSA survey (RSA is the Security Devision of EMC) recently found an "explosive rise" in the number of Wi-Fi access points, including public hotspots and business networks, within the world's major financial centers.

According to the report,
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the largest year-over-year increase in wireless adoption was found in London, where there are 160 percent more wireless access points (APs) than in 2006. The percentage increase in New York was a substantial 49 percent; and in Paris, 44 percent. Looking purely at business access points, London also leads, with a 180 percent leap over last year, as compared to jumps of 57 percent and 45 percent New York and Paris, respectively.
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While the report concluded that wireless security was highest in London; one-quarter to one-fifth of business networks in three of the world's most important business centers (London, New York and Paris) remain wide open.

Meanwhile, another report issued by ABI Research said that nearly 200,000 buildings will be outfitted with wireless by 2011.

According to ABI's principal analyst Dan Shey, “The combination of supply-side enablers – 3G networks, handsets with advanced capabilities, mobile applications – with a strong customer need means operators will be focused on establishing a coverage footprint inside buildings to retain customers who are using mobile data services. We expect this market to show a compound annual growth rate of nearly 20% by 2011.”

Also, Earthlink said it will begin to sell muni-Wi-Fi services in retail outlets. They are offering services in Anaheim, CA, Corpus Christi, TX, Milpitas, CA, New Orleans, LA and Philadelphia, PA but recently disclosed a $30 million loss (24 cents/share) for the first quarter. Earthlink is apparently cutting half it's CAPEX associated with municipal Wi-Fi. Here are some interesting numbers on the "growth" of the metro market around the world:

Committed or deployed networks	Estimated Households passed	Estimated Take Rates
2005	0.1 M	0.2%
2006	7.4 M	0.25%
2007	15.9 M	0.5%
Source: Dell'Oro Group, Tropos Networks

Finally, AT&T announced that its high-end DSL subscribers (for its Pro, Elite and FastAccess services) will be able to use any of their 10,000 hotspots for free.  The rest of AT&T's subscribers must pay $1.99/month for the privilege. And Telephonica's O2 mobile-phone business is evidently trying to strike a deal with Apple - to be its exclusive network operator for the iPhone in the U.K.

Monetizing Wi-Fi...

The introduction of Apple's iPhone represents a watershed moment, but not for Apple. 

Yes, the device is ultra cool and finally brings together your iPod, phone and computer into a single device (the browser actually looks like a real browser in your hand). But more importantly, the iPhone points to the need for high-speed reliable wireless connectivity over the last hundred feet.

The net-net of it all (get it?) is that innovation at the edge hasn't kept pace with innovation of handheld devices, their capabilities and the applications they run.  That sucks.

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Early reviews of the iPhone, while positive, have faulted the slower network because it will limit the palm-size wireless computer’s greatest strength — making the Internet easily accessible on the go.

“It doesn’t concern me,” said Randall L. Stephenson, the new AT&T chief executive, in a joint telephone interview on Thursday along with Steven P. Jobs, Apple’s chief executive. The fact that the iPhone offers faster Wi-Fi networking would more than make up for the relatively slow 300-kilobit-a-second pace of its cellular data network, he suggested.
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Once viewed as an enemy by carriers and broadband wireless providers, Wi-Fi is now their biggest friend.  It's quickly becoming an essential ingredient to easily extending networks without a lot of cost.  But security and reliability remain outstanding issues.

Cable companies, broadband providers, wireless carriers, and phone companies all want to use Wi-Fi at the edge of their networks (in homes, businesses, public venues, multi-tenant units, etc) and tunnel traffic, using L2TP, IPSEC or some other technique, back to their NOC. MAC addresses are transparently bridged over this tunnel to authenticate devices so users can be accounted for.

The new trend will be create "smart spots" within residences, commercial operations, etc., where subscribers willingly (when adequately compelled) broadcast the provider's SSID or some other SSID while giving the provider some sort of access to their Wi-Fi AP to deliver some service on-the-fly.   

Providers will have the capability to dynamically create an SSID and push it down to a particular AP when a request is made for one.  They'll also be able to generate unique encryption keys for each user that get automatically installed on laptops without user intervention. This is where things get really exciting.

If the iPhone does anything, it pushes broadbanders to get smart about using Wi-Fi to help users actually enjoy their new $599 iPhone that can do more than their network can support.