The cost of 802.11 wireless LAN equipment is set for a dramatic fall following the announcement that the makers of the key chipsets will cut their prices by about 75% in the next year.

The chipsets cost about USD16 today, but this could fall to only UD4 by this time next year, making the cost of manufacturing WLAN cards cheaper.
John Kirby, vice-president for global wireless at IBM, said the fall in price was being caused by higher volumes rather than any technical innovation.
“If you look at the volumes today they are very small, but look at the volumes you are going to see,” he said at the Mobile Enterprises exhibition in London in June. “Prices will halve within 18 months.”
However, he said for WLAN to take off, issues such as the different ways to connect in different places had to be sorted out.
“Technically this is not difficult,” he said, “We need to get the companies to agree. And to agree whether you pay by time or volume.”

Orange retail in the UK has taken the decision to promote the more effective use of existing terminals by the company’s subscribers rather than the continual sale of new handsets.

According to Nick Moore, director of Orange Retail, “80% of phone users use 10% of the handset’s functions.” The three main reasons identified by Orange for this shortfall were that: services aren’t seen as being relevant, they aren’t usable or the user doesn’t know how to use them.  As Moore explained, “Mobile phones are not complicated, they are just misunderstood.”
The initiative has taken the form of a UKP10million advertising campaign, promoting the idea of the Orange Academy which trains staff to ensure that customers get the most from their terminals. To back this up 1800 staff across 250 retail outlets nationwide have been reclassified as ‘trainers.’ Their priority is now to ‘train not sell,’ in order to encourage people to use their phones more.
Herein lies the motivation for the initiative. Moore explained, “There are some hidden gems within Orange such as our answer service. Once customers personalise their answer service, usage increases by 3%.”
In a mature market such as the UK, any increase in revenue is welcomed and the handset is an obvious starting point. Furthermore, it sits well with the operator’s handset policy. “Handset subsidies are reducing and prices are increasing which leads to a desire for increased handset life spans. Therefore customers need to be encouraged to use their handsets more.”
The initiative has been backed up by a number of concrete steps that demonstrate that this is more than a marketing push. An extensive training programme has been ramped up over the past three months, comprising both in-store and full-day training sessions on particular terminals, supported by manufacturers. In addition, each new terminal is given to a different member of staff to build up the outlet’s hands-on experience. Perhaps the most telling move, however, is that commission structures have been changed, meaning that retail staff will be paid commission based on the number of training sessions they undertake, not just the number of handsets.
In addition, and in line with the ease of use theme, Orange has re-launched its WAP portal. The aim, explained Matthew Edgar, from Orange multimedia operations, is to offer services to all Orange’s customers in the easiest way possible. He explained, “This is not an exclusive handset offer. It gives people the chance to use all the relevant functionality, irrespective of their terminal. Orange always believes in the mass market.” He further suggested that, “Content is not a huge differentiator; the real difference comes with the packaging, the access and the value for money.”
To introduce the new look, Orange is offering three month free trials to all pre- and post-paid account holders with the aim of “getting customers in the habit of using these services,” according to Edgar. However, the cost barrier has also been attacked by Orange which then offers the services at a fixed fee of UKP4 per month.

David Hughes, director of BT Mobility, launched an attack on Bluetooth at the WLAN Event recently held in London.

During a presentation on BT Openzone, he said that he “was struggling to know what to do with Bluetooth.”
He said, “I’m giving up on Bluetooth. I don’t think it will be a competitor with Wi-Fi. Anything that can be done on the internet can be done with Wi-Fi. It is about broadband everywhere.”
He admitted though that the Wi-Fi industry was in its “infancy” when it came to pricing policies.
“There are lots of people who will want to pay for broadband access at hotspots,” he said. “We will see experi-mentation over payment methods.”

Mobile operators have been accused of operating a cartel over roaming prices.

“There is a reluctance to compete resulting in higher charges to users,” said Ewan Sutherland, executive director of the International Telecoms Users Group in Belgium.
And he said the situation was going to get worse with 3G: “Some say 3G stands for ‘games, gambling and girls’, I say it stands for ‘gullibility, greed and grief’.”
He was speaking at the Mobile Roaming and Interoperability conference held in London.
Looking particularly at call termination charges, he said: “The roaming market looks very much like a cartel. The operators are ripping off each others’ customers. It is a wonderful scam. And there is evidence of price collusion.”
One of the problems, he said, was the pressure on operators to produce monthly ARPU figures.  A cut in roaming prices would cause an immediate drop in ARPU but might not lead to an increase in usage for six months.
The other problem is that reducing call termination charges benefits customers of operators other than the one cutting prices.
“So everyone is waiting for the regulator to tell them to reduce prices,” Sutherland said.
Meanwhile, he said multinational operators such as Vodafone and Orange could reduce prices internationally. Or they could offer “happy hours” during which holiday makers could phone home for cheap rates.
“But they are scared of driving general revenues down,” he said.
But Julian Keeley, head of regulation and carrier services at mmO2 in the UK, hit back saying there were already special rates for holidaymakers that could cut roaming process by between 30 and 70% for a month. He said these were introduced as part of a competitive response to Orange and T-Mobile.
He also said that traffic direction would increase competition in roaming prices by removing the random factor concerning which network a handset logs on to. This, he said, would let operators do deals with operators in other countries.
“The inter-operator tariffs did stay high for many years, and that was unacceptable,” he said. “This was because it was random which network your handset picked up on.”
The delay in introducing this properly will be the time it takes to convince existing users to update their SIMs.
“All new customers get SIMs with traffic direction built in,” he said.
Ben Niestadt, director of global sales at Dannet in Denmark, said roaming prices had to be competitive to increase revenues.
“You need to optimise roaming traffic,” he said. “If you reduce cost, you increase your market share. The right price plan will increase ARPU, keep you competitive, bring transparency to end users, prevent churn of high-usage roamers and reduce the number of customer call enquiries.”

Rumours about the imminent termination of mmO2’s 3G trial on the Isle of Man have been firmly denied by both mmO2 and Manx Telecom. However, Simon Gordon, spokesman for mmO2 said, “The trial will not last indefinitely.”

Although no date has yet been set for the end of the trial, the 3G networks being rolled out by mmO2 in Germany and Ireland are expected to supercede the Isle of Man when it comes to providing a learning experience for the group.  According to Gordon, the Isle of Man trial has “been invaluable,” but, he suggested, as the German and Irish networks use newer infrastructure equipment they would render the Isle of Man trial “redundant.”
In line with licence conditions, a network covering 25% of the German population has to be in place by the end of the year and commercial service is expected around the same time. The experiences of achieving this and early service usage and network behaviour information will then be shared amongst the mmO2 group, as has been the case with the Isle of Man trial.
Similar, although less stringent conditions exist in Ireland, and combined, the real, commercial experiences of these two rollouts will take over, leaving the future of the Isle of Man network in the hands of Manx Telecom. Said Gordon, “This is the benefit of only having solely-owned companies in the group.”
The end of the trial will not mark the end of 3G on the Isle of Man as Manx spokeswoman Christine Clucas explained, “The trial is going very well and we are evaluating the situation. There are certainly no plans to terminate the 3G network.” Like much of Europe, the Isle of Man is likely to be offered a commercial service comprising both 2.5G and 3G technologies.

GPRS roaming still has a future despite a slow rollout, initial customer dissatisfaction and 3G on the horizon, believes Jesper Holm Schlichtkrull, roaming manager of TDC Mobil in Denmark.

On top of that, he said there had been problems testing GPRS roaming because it worked differently on different manufacturers’ handsets.
“This means the settings and usage can be difficult for the customer to understand,” he said. “Customers also don’t know which operator in a country provides GPRS roaming, can end up trying on the wrong network and then give up and abandon GPRS roaming.”
He said that although GPRS roaming accounted for less than 1% of GSM subscribers, there was a future for it.
“But the rollout is slow,” he said, “and it will be even slower if we do not provide the right applications and make them easy to use. We need to kick-start the GPRS services such as MMS to make customers aware of them.”
He also said the pricing models had to be kept simple.
John Hoffman, consulting director with the GSM Association in the USA, said there was a danger of some smaller operators being left behind with GPRS roaming. “It is the small independent operators that don’t have many GPRS networks up and running that don’t have the roaming agreements,” he said. “It is fine for the large global organisations such as Vodafone, Orange and T-Mobile.”

Despite its problems, wired equivalent privacy (WEP) can still stop 90% of security breaches in wireless LANs, according to Richard Hollis, chief executive officer of Orthus.

Speaking at the WLAN Event in London in May, Hollis said more than 90% of hackers were just interested in getting free internet access and nothing more sinister. They won’t bother breaking even the simplest security system, and merely go to look for an easier target.
“Hackers select easy targets and use simple attack methods,” said Hollis. “They are easily deterred.”
WEP has had a bad press since August 2001 when AT&T Labs published a paper showing how easy it was to crack. But though it will not deter a serious technically adept hacker, there is no reason not to use it as part of a security system, said Hollis.
Jenni O’Connell, technical consultant with Global Secure Systems, agreed. She said, “The cheapest and easiest thing you can do with a WLAN is turn on WEP. It costs you nothing, so why not do it?”
But Hollis and O’Connell both stressed that to stop the more serious hackers, or crackers as Hollis called them, higher levels of security were needed.
However, the element of the 802.1x standard that can rotate WEP addresses quicker than they can be cracked is suffering from not being ratified.
“Everyone is doing their own flavours,” said O’Connell. “There is no compatibility between 802.1x systems. It is vendor locked at the moment.”
She said that for corporates, a firewall built specially for wireless networks was still the best route.”

IN-FUSIO, the mobile games service provider for operators in Europe and China, has announced new user figures that demonstrate the growing importance and the ARPU generating capability of its mobile games services.

IN-FUSIO now has over 3,350,000 players registered worldwide and has accumulated 7,000,000 game down-loads. This means a new player joins every five seconds and one download is made every four seconds. Since its launch in July 2001 these usage figures have been increasing by 15% month on month.
After downloading a game, IN-FUSIO’s service allows the player to unlock further game levels, challenge other players or post scores using SMS. As well as delivering all-important interactivity to the games service this has also proved an important revenue stream for operators who have benefited from the 35,200,000 premium text messages that have been sent by mobile gamers to date.
“We have seen a significant shift in the role mobile games play within an operator’s armoury of data services. This is probably why a third of all handsets sold in France since the beginning of the year are enabled with IN-FUSIO’s games engine client — ExEn.
Of the 3,350,000 registered players, over 1.1 million were active users last month, making at least one paid interaction in the last four weeks. With almost 700,000 downloads per month this represents “enormous revenue-generating potential,” says Gilles Raymond, CEO & founder of IN-FUSIO.