Market boom seen in wireless Internet access

By Molly Schuetz
Bloomberg News Service

PARIS — The market for public wireless local area networking is expected to grow to $5.5 billion worldwide by 2007 from $33.4 million in 2002, according to Analysys, a San-Francisco-based telecommunications, technology and media research firm.

So-called WLAN connections allow wireless access to the Internet from designated areas in cafes, hotels and airports at speeds as much as 200 times faster than regular dial-up modems. That's proving an increasingly attractive feature for business executives who want to send e-mail while waiting for flights or make changes to a PowerPoint presentation in their hotel rooms.

T-Online International AG, AT&T Corp. and TeliaSonera AB are among the companies that may benefit as demand for the fast, wireless Internet connections increases in the next four years.

Using public WLAN services "represents a significant opportunity for operators and other service providers," said Maja Kecman, author of the report for Analysys, in a statement.

Phone companies are rolling out WLAN services in an effort to encourage customers to send data over phone networks until they get their third-generation phone networks up and running on a wide scale next year.

European phone companies see WLAN networks as a complement and natural stepping stone to their third-generation wireless networks, which succeed the old analog and today's digital cellular networks. They spent $100 billion on licenses for third-generation networks, and are counting on increasing use of data to spur sales as the market becomes saturated.

In Europe, the market for WLAN access should grow to $2.64 billion by 2007 from $10.9 million at the end of 2002, according to Analysys. In the U.S., the market should climb to "just under" $2.8 billion from $22.5 million.

Designated access points, known as hotspots, are estimated to grow to 57,000 by 2007 from 4,800 at the end of last year, Analysys said. In Europe, the number of sites is expected to balloon to 30,000 in 2007 from 1,400 at the end of last year. In the United States, the market should reach 27,000 sites in 2007 from 3,400 at the end of 2002.