WIRELESS LAN: Delicensing To Fuel Growth

Recent government notification for de-licensing 2.4 GHz spectrum for indoor use has put India under the high

potential bracket. To keep up with the worldwide growth, industry experts now seek a complete de-regulation of this spectrum for outdoor use as well.

The government’s move to deregulate indoor use of 802.11b protocol-based

wireless LAN (WLAN) equipment has surely made India’s IT Minister, Pramod

Mahajan, a popular man in the IT circle. But the wireless solution providers

would have been a happier lot if the government had de-regulated the frequency

for indoor and outdoor use simultaneously. The industry now wonders how exactly

will the government enforce indoor-only use.

Licensing

had always remained an issue in India, which has now become one of the few

countries that has licensed the 2.4 GHz portion of the radio spectrum. "The

process of obtaining a license was time-consuming and implied additional cost

and affected both vendors and end-users," says Milind Kamat, Country

Manager, Accton.

An initial sum of Rs 18,000 per year for frequency use, and an additional Rs

4,500 per year as license fee for every user was payable to the Wireless

Planning and Coordination (WPC) wing of the Department of Telecom (DoT). DoT

officials cite security as a major reason for putting the frequency under

licensing as many defense and intelligence agencies use the same frequency.

HALF-BAKED MOVE?



Government’s decision to de-license 2.4 GHz for indoor use is being

considered as the first step in the right direction to promote WLAN market in

the country. "Government should consider de-licensing WLAN use for outdoors

as well. This will help service providers increase reach to provide services

link such as Internet, iTV, VOD, and voice through wireless

infrastructure," says Sunil of Allied Digital.

Accton’s Milind also feels the step is not enough as it is difficult to

differentiate between indoors and outdoors for the frequency utilization.

"There needs to be more defined de-regulation. The frequency is about

distance and it has nothing to do with boundaries of building," he adds.

According to an expert, it is not easy to prevent the radio frequency (RF)

transmissions from going outside the building or home. "If I install a WLAN

access point inside my home, I can definitely access my network from my

courtyard or from across the street. Since preventing RF transmissions from

escaping from within a building is not easy, people might end up using it

outdoors in any case," he says.

Similar are the views expressed by Ketan Barai, Director of Kaybee Infotech,

who specializes in wireless implementation in Mumbai. According to him,

government needs to clarify on whether campus-wide implementation is allowed or

is it just within buildings.

While clarity on the government notification is being sought, solution

providers need not rake their brain over the indoor/outdoor use issue, as Pramod

Mahajan has promised to deregulate outdoor use very soon.

IMPACT OF DE-LICENSING



WLANs users can access shared information without physically plugging in to the
network. It enables network integrators to set up or expand networks without

installing or moving wires.

With de-licensing of 2.4 GHz spectrum for indoor use, the industry hopes to

see tremendous growth in this segment. "WLAN de-licensing will attract more

vendors to promote WLAN products in the market which in turn will result in the

growth of WLAN business," says Sunil Bhatt, CTO, Allied Digital Services.

"Prior to this, doing business in WLAN products involved lot of

government-related paper work and licensing. And licensing was required at each

link in the supply chain of WLAN products, which was a discouraging factor for

those who wanted to sell or implement WLAN products," he adds.

Everyone from principals, importers, distributors, and dealers to end-users

suffered because of the licensing. According to Milind, now the benefit of

partial de-licensing will definitely help hotels, hospitals and educational

institutes. "Once a particular user segment is given the convenience of

de-licensing, the industry as a whole will surely get benefited," he says.

However, Ketan Sanghvi of Wanland Datacom says, "It will be price,

mobility and application that will prompt companies to adopt WLAN."

BLOCKED ORDERS



Partial de-regulation has given industry the push for growth. Until now many

customers have been shying away from implementing WLANs because of the

license-related hurdles. Sunil of Allied Digital says, "Customers were

aware about the licensing hurdle for WLAN. Due to this many of them dropped

their plans to implement WLAN in their networks. Recently, we have seen a sudden

increase in demand for WLAN solutions after the government de-licensed the WLAN

spectrum." Wanland’s Ketan says, "We had at least four to five

customers whose orders were held up waiting for the WPC clearance."

But de-licensing was not the only factor that hurdled growth in this segment.

Devarshi of Omnitech says, "As many as 30 customers are expected to go

wireless through us. But, the major issue that still remains is price."

To setup a basic WLAN for 10 systems a single Access Point (AP) and 10 WLAN

adapters are required. The AP costs between Rs 35,000 to Rs 1 lakh, depending

upon the features. Network adapters cost between Rs 10,000 and Rs 20,000. Which

means a basic setup of 10 PCs and one access point would cost around Rs 1.35

lakh to Rs 3 lakh.

GROWTH FORECAST



Worlwide WLAN market has been growing at an explosive rate. According to a
recent report released by Gartner, worldwide WLAN unit shipments are on target

to grow 73 percent in 2002, while revenues will increase by 26 percent. And this

growth includes even the home segment along with large corporates and SMEs.

However, WLAN market in India is still in its infancy. "It is still a

virgin market and the industry can expect a lot of growth to come by," says

Chander Purswani, Country Manger, Allied Telesyn. Until now, Allied has been

finding it difficult to sell in India due to licensing issues.

Industry leaders are now optimistic and forecast a growth ranging from 15 to

100 percent in the next few years. According to Sunil of Allied Digital, India’s

WLAN market should grow by 100 percent by the end of next financial year.

However, Milind feels that this growth will be in the region of 30-40 percent.

Ketan on the other hand, does not have high hopes as others and pegs the

growth between 15 and 20 percent. Sampat Iyengar of Sam7 and Devarshi Buch of

Omnitech believe that the growth would happen between 20 and 30 percent by

December 2003.

While no official study has been done to estimate the size of WLAN market in

India, industry experts believe it to be around US$ 2 million.

SECURITY IS CRITICAL



Security is one critical issue that puts off customers from WLAN. Deploying

a wireless network needs to be carefully evaluated because there exist many

tools that are freely available on the Internet, which can tune into WLAN

network devices and retrieve useful information about the organization. Thus it

becomes essential to take additional security measures on a WLAN.

The easiest measure that anybody can take is to use the free, built-in

security features that come with the wireless access point, such as wired

equivalent privacy (WEP). If the network is specifically for indoor use only,

the access points should be located in the middle of the building and away from

glass windows. Or a concentrated (unidirectional) antenna system should be used

so that radio pattern is focused in a known area.

POTENTIAL BUYERS



Primarily, laptop and PDA users get an advantage over desktop users in a

WLAN environment. But this cannot be taken as a cue for growth because

laptop/PDA user base is not really growing at a fast rate.

But that is not the only factor for promoting WLAN usage. A new office set up

with no wires always looks good. WLAN is good for places where a wired LAN can

be a hindrance or may not be easy to install without damaging the looks of the

place.

So the potential places where WLAN customers exist are: heritage buildings,

conference and exhibition halls, hospitality industry, colleges, university

campuses, cyber cafes, super markets, hospitals, airports, railway stations,

manufacturing plants, warehouses and even homes.

CONCLUSION



The overall cost of wireless LAN hardware has nose dived in the last two

years–from Rs 1 lakh to Rs 45,000 for wireless LAN access point and from Rs

17,000 to Rs 10,000 for PCMCIA Ethernet card. As wireless LAN equipment prices

continue to fall and speed increases, wireless solutions will become a viable

alternative to wired LANs in small premises. This is because bandwidth demands

are lower in small sites, and the cost of cabling for wired Ethernet is higher

than a WLAN setup in a larger premise. The only competition for WLAN could arise

from 3G GSM. 3G GSM accommodates higher number of mobile users as compared to PC

users. This could make a huge difference, if pocket PCs with 3G or GPRS become

common.

NELSON JOHNY in Mumbai

PROS AND CONS OF WIRELESS

One must not go for a WLAN just because others are going for it. Like any new

technology, WLAN also has its pros and cons. A consolidated view from the

experts of the wireless industry list the following pros and cons while using a

WLAN:

PROS



MOBILITY: WLAN offers mobility to the users in any organization. Users can

be given access to the corporate network while they are in boardroom, conference

room and reception or even in the campus. Laptop users get a better advantage as

they can walk in and out of a network without hurdles of a physical connection.

FLEXIBILITY:

WLAN offers flexibility while setting up temporary networks for

training/seminars and provide instant access to visitors/students. WLAN offers

network connectivity at places where laying of the cables is practically not

possible. Example: workshop floors, warehouses, heritage buildings or public

places.

REDUCES COST OF OWNERSHIP: While the initial investment required for

wireless LAN hardware can be higher than the cost of wired LAN hardware, overall

installation expenses and life-cycle costs can be significantly lower. Long-term

cost benefits are greatest in dynamic environments requiring frequent moves and

changes.

SIMPLE SETUP: WLAN can be quickly setup for any additional mobile

staff.

CONS



SECURITY: Security is the critical factor for any WLAN implementation. IEEE

802.11b standard provides broad guidelines for WLAN security, which is not

sufficient in today’s environment. Additional security measures needs to be

considered for WLAN. Third party authentication service and Encryption should be

implemented for WLAN.

PERFORMANCE: The critical success factor for any WLAN implementation

is the design phase. Poorly designed WLAN will not perform as per the

requirement. Wireless site survey by experts is a must to ensure uniform

availability of network access throughout a location.

INTERFERENCE: There is a possibility of interference from other

devices operating in the 2.4 GHz spectrum (Bluetooth devices, microwave, etc).

BANDWIDTH: WLAN supports 11 Mbps against 100 Mbps LAN standard of the

industry.

LICENSING: Outdoor usage is yet to be de-licensed.