Europeans love cell phones. It has been a year since my wife and I were in France and the UK, but we both noticed how seemingly everyone had a cell phone up to one ear. My wife uses her cell phone frequently for her work, but I admit that I'm not much of a cell phone guy. In Paris, it can take you two hours to walk the eight or nine blocks between the Eiffel Tower and Napoleon's Tomb. As an American in Paris, you have to look straight ahead to make sure a Parisian talking on his cell phone doesn't slam into you and still scan the sidewalk for the numerous piles of dog feces. I could make a killing in Paris if I had a wireless business that sent out real-time alerts, telling Parisian cell phone users exactly when to sidestep or jump without interrupting their call.

European telecommunications industries have invested billions of dollars in maintaining and upgrading their wireless networks in the past decade. One of the reasons is practicality: Why lay down cable when you can construct a fairly unobtrusive tower or install an antenna on top of a building? Wireless networks are less destructive than laying down "kilometers of fibre optic" lines throughout historic London. Digging trenches all over the countryside would undoubtedly destroy a lot of scenic tourist spots. Let's not forget, France surrendered to the Nazis rather than have a division of Panzers muck up the grounds at Versailles.

Wireless communication is big business in Europe, too. Companies like British Telecom, Telef—nica of Spain and Germany's Deutsche Telekom sell first-rate wireless services to their customers. In countries where phone calls from land lines are charged by the minute (American customers are extremely spoiled by our flat-rate calling plans), a cell phone that also gets soccer scores, email, instant messages, weather reports, stock quotes, real time doggie-doo alerts for just a little bit more is the better deal. The millions of wireless customers generate a lot of revenue for the European-based telcos and these companies want to keep said customers happy. That's why many of the telcos are investing in the third generation, or 3G, wireless networking that promises to bring broadband Internet to cell phones by next year.

All of that money could dry up quickly, say analysts at market research group Analysys. According to a survey conducted by the British-based firm, wireless-telecommunications operators in Europe stand to lose some 30 percent of the 3G telephony revenues they expect to generate from corporate employees in the next five years. Where is this money going to go? To public wireless local area networks, or WLANs, in coffee shops, airports, conference centers and train stations by 2006. Analysys says that these public WLANs could generate $2.64 billion (US) in revenue by 2006 and reduce average revenue per corporate subscriber of 3G phone networks to around $396 a year from over than $572. The analysts say 3G wireless networks are much more expensive to implement than WLANs because unlike 3G, the WLANs do not require large radio towers all over the countryside to operate. The idea is that hip European business types will stay in touch with the home office whilst on the road using their laptop, PDA or smart cell phone and fast Internet access via a public WLAN.

Here is where I start to have a problem with this analysis. I understand why 3G networks will lose money on this deal, because 3G broadband access on a wireless device is a pay-for-play service. If you have fewer customers using your service, the less money you make. What I don't understand is who pays for the "public" access on the WLAN? A public WLAN connotes a local, state or federal government funds the network for the use of all citizens. Although the access at a public WLAN is already being described as "open" and "free," there's little that is free-as-in-beer not free-as-in-liberty about a public network. Analysts cannot think that public WLANs will just magically appear without higher property or sales taxes. Even worse, what if the governments constructing these public networks specifically tax European cell phone infrastructure companies like Orange or Vodaphone with some kind of "wireless band licensing" tax to pay for the WLANs in public airports and train terminals? Talk about robbing Peter to pay Paul!

WLANs have their drawbacks - an extremely limited range, a lack of any kind of concrete standard like 3G (WLANs may operate with the 802.11b, 802.11a or 802.11a when they are implemented) and relatively few devices are wireless-enabled. Another drawback to WLANs is how difficult it is to charge customers for usage. Wireless local area networks are fairly common in urban centers around the United States, but private corporations mostly use them. Metricom, the leading WLAN company attempting to charge customers for wireless broadband Internet usage in the US, recently went out of business. Metricom found that nobody wanted to pay $100 a month or more for wireless access when it was easier to steal access from insecure corporate WLANs in urban areas.

Hopefully, European companies and governments can get on the same page regarding this issue. I do not have a preference or stake in either technology, so I wish both WLAN and 3G all the best. I will say that 3G has their act together when it comes to figuring out how to manage and maintain a revenue stream compared to WLAN tech right now. I have no problem with WLANs being part of an open standard. Proprietary software logons will be needed, and customer usage will have to be tracked for billing purposes. As long as the Star Trek techno-socialists cloud the issue with "free public broadband is a right" rather than a privilege for paying customers, WLAN technology is going to have a tough time gaining acceptance in the business community. <>

Send me your comments: scott@worldtechtribune.com
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