US : Dr Irwin Jacobs, CEO and chairman of Qualcomm, the US-based CDMA chipset maker, has played down any possible negative impact that WiFi may have on 3G data revenue. Speaking at yesterday’s Forum session, ‘3G versus WLANs: competition or collaboration?’, he said: “I think 3G and WiFi [brand name for WLANs] will be collaborative, but I don’t think there’s a very good business case for standalone hotspots [using 802.11]. My view is that WiFi will be deployed in homes and campus networks, and probably by [cellular] operators to extend their offerings where they may not have enough spectrum or the cost of providing additional coverage on the wideband is too expensive.”

Jean-Pierre Bienaimé, chairman of the UMTS Forum, and a panellist at the session, called WiFi ‘niche’ and said that the two technologies tackled different market segments and were complementary. “WLAN is ‘on the pause’ [high-speed connectivity] and 3G is ‘on the go’,” he said. “WLAN is not an alternative to 3G.”

Jacobs also believes there’s a danger of overstating the data performance of WLANs. “Although the access point costs are relatively low [for LAN connectivity], the backhaul is expensive and so it’s going to be limited,” he told the ITU Show Daily. “When contention [on the backhaul] kicks in, there will be lower data rates.”

Jacobs says he is not anti-WiFi and can integrate 802.11 capability onto Qualcomm chips. Nokia, Sony/Ericsson and Motorola have also announced their own integrated cellular/WiFi chip solutions for laptops and advances in chipset design are bringing the concept of a dual-mode WiFi handset closer to reality. US-based Broadcom unveiled in September this year a single chip component for 802.11. The company claims that the solution, dubbed the AirForce OneChip, consumes 85 per cent lower average power than other Wi-Fi systems and so compatibility into PDAs and cellular phones becomes possible.

Despite the prospect of subscribers using these handsets for cheaper data and free voice (over WiFi), the threat to 3G revenue will no doubt be dependent on the scale of WLAN coverage. But 3G operators shouldn’t be overly concerned, says Ross Parsons, an analyst with UK consultants, BWCS. “According to our estimates, WLANs will account for 12 per cent data of wireless data worldwide by 2007, although that’s not the same as saying 3G operators will lose 12 per cent of their revenue. WLANs will simply make the wireless data market a lot bigger than it would have been.” BWCS estimates that the overall corporate wireless data opportunity will be worth US$75.65 bn by 2007.