Wireless networks have a vital role to play in improving business flexibility. But will they replace the role of telcos, asks Angus Kidman.

Published in The Bulletin, June 25 2002

In recent years, wireless systems have become prevalent as a means of providing home and business networking between PCs. While many companies have been backing a proprietary system known as Bluetooth, the family of open standards known as 802.11 has proved more popular in the marketplace.

Competition between the two has driven down the cost of wireless networking equipment to the point where it may be feasible to use wireless technology to help connect sites to existing telco networks or even to build an independent web of broadband wireless communication networks. Chief among their advantages is that once installed, wireless networks don't incur additional fees since, unlike mobile telephones, they use unlicensed spectrum.

Most observers believe that while wireless networks have an important role to play in improving business flexibility and consumer access, it is overly ambitious to assume that they will be able to supplant the role of existing telcos. One problem is simplicity, which makes it easy to build a network, and hard to build a competitive business. "Because they operate in an unlicensed frequency band, there's nothing to stop someone else from doing the same thing," says Michael Bouchard, program director at META.

Roaming will also prove a challenge. Mobile phone customers take it for granted, but it's uncharted territory for nascent wireless data operators. "Wire­less LANs are like a networked version of the cordless phone, not the [mobile] phone," says Nitin Shah, general manager of ArrayComm. "You can move around a little, but you don't expect to be able to go everywhere." Ultimately, providing seamless roaming will require local wireless network providers to make deals with existing mobile telcos, which in turn will demand fees for their services.

Deal-making aside, extending wireless technology beyond a single building in this way is far from straightforward. "Managing the traffic associated with building out a wireless network is a challenge," says Shah. Chief among the challenges is reducing interference, a problem that's particularly pronounced in densely populated urban areas.

There are also concerns -- often overstated -- about security. However, increased security may come at the price of reduced convenience, especially for users who want access in multiple locations. "Currently, if you roam between wireless cells, it will take you 30 seconds to authenticate to the next cell," says Calvin Anderson, Australian vice-president of wireless solutions company Symbol Technologies. The question remains as to whether people really want access to a full range of networked applications everywhere they go. "I don't see myself driving down the highway and doing PowerPoint presentations at the same time," says Thomas Jensen, director of product ­marketing for NetTest.

Nonetheless, companies can significantly cut costs by supplementing their existing communications systems with wireless networks. NCR business manager Dean Vaughan calculates that for an initial investment of $15,000, a company could implement a wireless bridge capable of offering an 11Mb-per-second link over a distance of up to 20km. This would allow employees to connect to a network using the same technology from an office in the Sydney CBD or in inner-northern Chatswood. Even without the convenience of easily moving equipment, the cost compares favourably with the alternative of a dedicated frame relay link, which Vaughan estimates will cost about $12,000 plus carriage charges.

Adding in an internet protocol (IP) telephony system will also allow businesses with large campuses to provide free mobile access between staff. Wireless solutions are also well suited to locations such as construction sites or warehouses. Many of these applications predate the recent rise of new wireless standards and don't require highly elaborate solutions or broadband links. "There are already more than 600 warehouses in Australia using wireless technology," says Anderson. "You're not looking for fancy graphics on a forklift screen."