Public WLAN services certainly have a role to play in Europe, but the threat they pose to 3G networks has been overstated according to a recent report from the Yankee Group.

Public access wireless LAN (PWLAN) services will not dramatically change the European telecommunications landscape, and the threat that this emerging "hotspot" technology poses to the 3G business case has been grossly overstated. These are among the most important conclusions from a Yankee Group report, "Public Access WLAN in Europe: A Technology in Search of a Business Case?"

"WLAN technology is now relatively mature, and has already been widely deployed in European enterprises," said Declan Lonergan, director of European wireless research and consulting. He added, "What is not mature, however, is the public access WLAN service environment. Some fundamental challenges remain to be resolved before we can start to see significant growth in user numbers."

According to the report, the key technical obstacles relate to service roaming, security, and billing. Perhaps more fundamentally, however, are the challenges emanating from the uncertainty surrounding PWLAN service models, and the service provider business case.

Despite these concerns, the Yankee Group sees a future for PWLAN in Europe, with a predicted 7.7 million active users of the technology in 2002. What isn't apparent in the crystal ball, however, is PWLAN solutions cannibalizing 3G revenues to any significant degree. The differences that exist in the core value propositions offered by the two technologies should lead to the introduction of complementary, rather than competing, services.

For this reason, the Yankee Group said it encourages Europe's mobile operators to grasp the PWLAN opportunity immediately, and to leverage their formidable position of strength in mobile services and customer ownership, to secure a dominant role in the provision of PWLAN services."