Nokia, IBM set sights on public wireless LAN market

IBM Corp. and Nokia Corp., the world's largest mobile-phone maker, have agreed to jointly pursue the public wireless LAN market with the hope that in combining their strengths, they can add extra momentum to the spread of WLAN networks, the companies announced Monday.

"It is a ready service concept that Nokia and IBM are jointly offering to wireless operators and independent operators. This cooperation with IBM will open new business opportunities for us in terms of the corporate customer while our work with wireless LAN technology and the fact that we are contributing to WLAN standard specifics all of the time is good for IBM," said Nokia spokeswoman, Riitta Mard.

Public wireless LANs offer wireless connection services to users in public buildings such as airports, hotels, cafes and conference centers. In one of these "hot-spots," a Wi-Fi-certified wireless LAN card can allow a wireless device using the Institute of Electrical and Electronics Engineers Inc. (IEEE) 802.11b standard to access the Internet or a company intranet.

Aimed primarily at the corporate business traveler, the WLAN market has a huge potential, with forecasts of over 100,000 hot-spots throughout the world within four years, said IBM spokesman Wynne Morris.

Company representatives declined to disclose any financial details of the alliance between the Armonk, New York-based IBM and the Espoo, Finland-based Nokia.

"There are pilots and projects going on now, but we don't expect to be able to make any customer or major product announcements for one to two quarters," Morris said.

There are a number of 802.11-based WLAN standards being promoted by the Wireless Ethernet Compatibility Alliance (WECA) and branded Wi-Fi (802.11b) and Wi-Fi5 (802.11a). While the 802.11a standard is currently the most popular in the U.S., in Europe, the HiperLAN2 standard is being pushed by vendors in the HiperLAN2 Global Forum and the European Telecommunications Standardization Institute (ETSI). To make matters even more complicated, European vendors are also expected to make products based on the 802.11h standard.

What two large companies like IBM and Nokia can offer operators is consistency in the WLAN technologies and networks as well as a worldwide reach, which IBM and Nokia believe will be very appealing to wireless operators when they offer the services to their own customers, said IBM's Morris.

"The real sweet spot is going to be the seamless roaming that corporate travelers are going to demand. For example, authentication using SIM (Subscriber Identification Module) technology is going to be a key aspect of what we'll offer because it is going to allow a subscriber to have all of their charges on one bill," Morris said.

A SIM chip is about the size of a small postage stamp and is often used in GSM (Global System for Mobile Communications) mobile phones to authenticate the user on a mobile network. Last June, Nokia began offering special WLAN cards that came with a slot for a SIM chip.

The alliance will also support the RADIUS type of authentication, Mard said.

The WLAN alliance between IBM and Nokia will support "many kinds" of business models and rather than competing with the 3G (third generation) technology that the wireless operations have been spending enormous amounts of money on developing, the WLAN services can be offered as a complimenting technology, Mard said.

"Wireless LAN is different from 3G because it serves the public hot-spots and is directed more specifically to the corporate user. But there are other instances of combining WLAN support with 3G and GPRS (General Packet Radio Service) support, in PC cards for example," Mard said.

One major hurdle in the European WLAN market is that it is still illegal in some countries such as the U.K. and France to operate public networks using the technology IBM and Nokia are pushing. "Yes, maybe in some markets that is true, but there are other markets in Europe that are open now. We see the market as a growing one; it is new and emerging," Mard said.

IBM's Morris expressed confidence that policy changes may be on the not-too-distant horizon in the U.K. and France.

"These things are being addressed at the highest levels of government. In the U.K., there is already a movement to address the public network for wireless LAN networks. And hot-spots are already beginning to appear in airports throughout Europe in places like Helsinki and Amsterdam. We hope it will be resolved as soon as possible, but we are confident that it will be resolved. I think governments realize the potential of this market," said Morris.

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