No money in wireless, says Nicholls

No money in wireless, says Nicholls

If there is one technology that has captured the imagination of vendors and end users alike, it is wireless technology.

Many in the channel are hoping WiFi will be the next big thing, but a Sydney-based ISP and services company begs to differ. According to Mike Nicholls, managing director of Nicholls-Price, the only companies that will end up making a dollar out of wireless technology are large telcos.

"There are a lot of people walking around with stars in their eyes," he said. "But the reality is there's no money in it for anyone who's a smaller operator. The only companies that are going to make money out of that space are the telcos."

Nicholls should know. Nicholls-Price has already done a wireless implementation in the heart of the Sydney CBD. Visitors to the trendy Industrie in Pitt Street can log onto its wireless network. The trouble is that most organisations simply don't have the systems to take advantage of wireless access.

"Any network is going to be application driven," he said. "Most people want a wireless connection to read their business e-mail, but if companies don't have the backend in place, then they are wasting their time."

Nicholls cites the law put forward by 3Com founder Bob Metcalf, which states that the value of a network increases in proportion to the square of the number of nodes on the network. Essentially, the power of the network increases with the more people who use it.

"No-one has got ubiquitous wireless access. It is quite feasible for someone to have VPN access from their notebook across a wireless LAN and back again, but the vast majority [of companies] are not set up for that."

He also points to European experience, where carriers are still not making money out of wireless despite hundreds of hotspots.

"I think a lot of those players will trade, sell or go out backwards in the next 12 to 18 months," he said. "We have put our foot in the water, but we didn't go as far down the wireless path as some. You have got to experiment on new things or you'll never pick up new revenue streams, but it is very unlikely wireless is getting anywhere near the revenue needed to make it viable."

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