November 12, 2001
If You Can’t Beat ‘Em, Join ‘Em

By  Tim Kridel

VoiceStream appears to be the latest wireless service provider to acknowledge that wireless LANs are a viable way to tap the market for high-speed wireless data.

On Nov. 9, bankrupt WLAN service provider MobileStar agreed to sell its assets to VoiceStream, according to several reports. MobileStar and VoiceStream representatives didn’t immediately return calls.

If the reports are correct, VoiceStream’s purchase would be just the latest valentine in the courtship between cellular and WLANs.

Only a few weeks ago, Nokia announced the first successful test of a system that allows a WLAN user to roam on a GSM network. About 20 service providers are testing the system, and Nokia expects some of them to launch service during the first half of 2002. In June, Ericsson announced similar interoperability for WLANs and next-generation CDMA networks.

WLANs face plenty of hurdles before they can tap a market as wide as cellular. Although WLANs already offer data rates ten times as fast as next-gen cellular, their coverage is limited to airports and other “hot spots,” and it would take a lot of capital and time to expand that coverage to be on par with cellular’s footprint.

Even so, WLANs are in a good position to tap at least the cream of the crop: business travelers, the lucrative demographic coveted by practically every service provider of every stripe. They also already offer high-bandwidth service today, while service providers, vendors and investment bankers continue to push back their forecasts for third-generation wireless ubiquity to 2003 — and beyond.

Some companies have already asked laptop vendors about the availability of wireless modems that can work with WLANs and next-gen wireless, where software would automatically switch the user between networks depending on preferences such as data rates and pricing.

By buying or partnering with WLAN providers or making their networks interoperable with WLANs, cellular providers can ensure that they don’t lose revenue to WLAN providers.

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