The technical and business challenges in wide deployment of

WLAN Hotspot Networks

Victor Bahl

http://research.microsoft.com/~bahl

Microsoft Research

ACM WMASH 2003 Panel, Sept. 19, 2003

Victor BahlVictor Bahl

Disclaimer

These are my personal opinions only and These are my personal opinions only and not necessarily that of Microsoft Corporationnot necessarily that of Microsoft Corporation

Reference

P. Bahl, A. Balachandran et. P. Bahl, A. Balachandran et. al, al, ““PAWNs: Satisfying PAWNs: Satisfying the Need for Ubiquitous Secure Connectivity and the Need for Ubiquitous Secure Connectivity and Location ServicesLocation Services,,”” IEEE Wireless Communications, IEEE Wireless Communications, Vol. 9, no. 1 (February 2002)Vol. 9, no. 1 (February 2002)

Victor BahlVictor Bahl

Hardware Growth & CostsAnalysts project 48 million 802.11Analysts project 48 million 802.11--enabled Laptops and enabled Laptops and PDAPDA’’s by 2007s by 2007

Gartner forecasts over 16 million access points and over Gartner forecasts over 16 million access points and over 100 million LAN adapters worldwide by 2005100 million LAN adapters worldwide by 2005

Prices for access points and adaptors continue to fall, Prices for access points and adaptors continue to fall, with more than 50 vendors shipping equipmentwith more than 50 vendors shipping equipment

Enterprise APs dropped from $1000 to $375 with a 20x volume Enterprise APs dropped from $1000 to $375 with a 20x volume increase in 2001increase in 2001Retail adaptor prices went from $250 to $50Retail adaptor prices went from $250 to $50BOM has dropped below $5 for .11b chip setsBOM has dropped below $5 for .11b chip sets

Growth of Growth of WiFiWiFi PhonesPhones

Victor BahlVictor Bahl

WiFi phones?

Motorola announced a WiMotorola announced a Wi--Fi phone for VoIP (early 04)Fi phone for VoIP (early 04)

Nokia Nokia D211 GPRS/WiD211 GPRS/Wi--Fi PC Card available nowFi PC Card available nowGPRS/WiGPRS/Wi--Fi phone beta in late 2003Fi phone beta in late 2003

Qualcomm MSM7000 chip with integrated ARM CPU, Qualcomm MSM7000 chip with integrated ARM CPU, CDMA, and WiCDMA, and Wi--Fi (early 04)Fi (early 04)

HP & Dell have announced integrated phone/WiHP & Dell have announced integrated phone/Wi--Fi PPCs Fi PPCs in 04in 04

Victor BahlVictor Bahl

Wi-Fi Landscape

Major Operators:Major Operators:TT--MobileMobileTeliaSoneraTeliaSoneraAT&T WirelessAT&T WirelessVerizonVerizon WirelessWireless

Emerging National (U.S.) Operators:Emerging National (U.S.) Operators:WayportWayportCometaCometa

Other emerging Branded Service Providers:Other emerging Branded Service Providers:EarthlinkEarthlinkAOLAOL

Aggregators:Aggregators:GRICGRICIPassIPassBoingoBoingorovingIP.netrovingIP.net

Hot Spot Operators:Hot Spot Operators:Azure NetworksAzure NetworksSipSip’’nn’’SurfSurfAirAir--22--LanLanFatPortFatPortBroadreachBroadreach NetworksNetworksBroadband ExpressBroadband ExpressPronto NetworksPronto Networks

Victor BahlVictor Bahl

Wi-Fi Landscape: Addl. Stake Holders

IBM & IBM & AccentureAccentureBackend servicesBackend services

Intel, TI, AMDIntel, TI, AMDWiFiWiFi chips and mobile serviceschips and mobile services

CiscoCiscoIOS on IOS on WiFiWiFi networking networking

Toshiba, AppleToshiba, AppleExperienceExperience

HPHPHardwareHardware

Victor BahlVictor Bahl

Reality in Pictures

Victor BahlVictor Bahl

What do I know about this subject..

The Choice Network (Jan. 1999 (Jan. 1999 –– Nov. 2001)Nov. 2001)First Public Area First Public Area WiFiWiFi Network (PAWN) Network (PAWN) Deployed in Crossroads Shopping Center, Bellevue, Deployed in Crossroads Shopping Center, Bellevue, Washington, USAWashington, USA

FeaturesFeaturesIntranet and Internet accessIntranet and Internet accessGlobal authenticationGlobal authenticationPrivacy for users and security for operators Privacy for users and security for operators Differentiated services based on policiesDifferentiated services based on policiesLocation based servicesLocation based servicesRoaming support between multiple networksRoaming support between multiple networksPacket level accountingPacket level accountingEase of deploymentEase of deployment

Victor BahlVictor Bahl

Broadband wireless Internet connectivity & location services in public places: http://www.mschoice.com

Victor BahlVictor Bahl

Business ModelsWISP StartWISP Start--upsups

Cellular Operators buy out / Invest in Cellular Operators buy out / Invest in WISPsWISPsWiWi--FiFi fills in 3G gaps and provides higher speedfills in 3G gaps and provides higher speed

TT--Mobile runs the hotspots in StarbucksMobile runs the hotspots in StarbucksSprint invested in Sprint invested in BoingoBoingo

Organic GrowthOrganic GrowthThe CHOICE NetworkThe CHOICE Network

Global authenticationGlobal authenticationIndividual CentricIndividual CentricCost and maintenance of equipment & services by local entityCost and maintenance of equipment & services by local entityTuned services: e.g. context and location aware Tuned services: e.g. context and location aware

Victor BahlVictor Bahl

PAWN Customers

Initial target Initial target -- Individuals Individuals Not very successfulNot very successfulChicken and egg problem, not enough hotChicken and egg problem, not enough hot--spots, subscriber fee is high, few takersspots, subscriber fee is high, few takers

Evolving towards BusinessesEvolving towards BusinessesRethinking, go after the mobile workforceRethinking, go after the mobile workforce

Here’s the justification……..

Victor BahlVictor Bahl

US Mobile Workforce in All Industries (Year End)

14,85015,443

16,05916,701

17,36818,061

18,78219,532

20,312

13,73114,280

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Empl

oyee

s (0

00s)

10 Year CAGR: 4%

2005 Estimate: 4.5 million users out of 16 million mobile workerswill use PAWNs

Hope: The mobile workforce will drive a need for increasingly greater hot spot deployment

Mobile Workforce

In 2005 82% of all business laptops will include WiFi versus 37% of Consumer lapops

Victor BahlVictor Bahl

Current Monthly Pricing for PWLAN Service Providers$75

$50

$25 $25$20 $20

$30$30

Average $36

$0

$10

$20

$30

$40

$50

$60

$70

$80

Boingo Unlim

ited

T Mobile

Nati

onalT M

obile Loca

lWay

portBoingo Pro

Jolta

gehere

UareWiFi M

etro

What about Subscriber Cost?Hope: Pressure from competition will continue to drive

down pricing over time while also fueling hot spot buildout

Want: Pricing needs to get below $25/month

Victor BahlVictor Bahl

PAWN Market

Total Retail US PWLAN Subscribers

294 7761,705

2,947

4,6905,960

845

1,604

2,506

3,373

354990

2,549

4,551

7,196

9,333

21560

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2002 2003 2004 2005 2006 2007

Subs

crib

ers

(000

s) ConsumerBusiness 5 Year CAGR: 92%

~9 million subscribers paying $25 / month results in a $2.7 billion services market by 2007.

Victor BahlVictor Bahl

So, what am I we saying …

Victor BahlVictor Bahl

The CHOICE model is goodSmall hotspot operators (Small hotspot operators (WISPsWISPs) have tried & failed) have tried & failed

e.g. e.g. MobilestarMobilestar bankruptcybankruptcy

Large Large TelcosTelcos cancan’’t cover it all (not growing fast enough)t cover it all (not growing fast enough)Ignore small businesses (malls, restaurants, museums etc.)Ignore small businesses (malls, restaurants, museums etc.)Impacting the mobile workforce alone is not enoughImpacting the mobile workforce alone is not enoughBenefits of hardware cost reduction not passed on to userBenefits of hardware cost reduction not passed on to user

WinWin--Win for all: Organic Growth (CHOICE)Win for all: Organic Growth (CHOICE)Targets the individual Targets the individual Small businesses become hotSmall businesses become hot--spots (greater overall coverage)spots (greater overall coverage)All stakeholders benefitAll stakeholders benefitEasy to incorporate location servicesEasy to incorporate location services

Thanks!Details in:

P. Bahl, A. Balachandran et. al, “PAWNs: Satisfying the Need for Ubiquitous Secure Connectivity and Location Services,” IEEE Wireless Communications, Vol. 9, no. 1 (February 2002)

Contact

bahl@microsoft.com