Saying Oui To Wi-Fi

By Gerry Blackwell

June 25, 2003

The French Wi-Fi market starts to heat up, led by France Telecom and its PCS subsidiary, Orange.

Despite a unified currency and a European parliament, when it comes to Wi-Fi Europe remains a patch-work market. In the case of Wi-Fi, it's mainly because of differences in national regulatory policy.

The Scandinavian countries were first and fastest out of the gate, followed by the UK and Germany. Now France, which only officially removed regulatory barriers to Wi-Fi hotspot operators in December 2002, is off and running.

France Telecom, the country's incumbent (and largest) telecom provider and owner of Orange cellular/PCS companies in France and other European countries, jumped into the race earlier this year, announcing a major deal with Accor Group to put Wi-Fi in 1,300 of Accor's hotels around the world.

More recently, Orange announced a major deal with Air France to put Wi-Fi hotspots in the airline's frequent flyer lounges around the world.

"If you compare France to the U.S., we're late, yes, certainly," says Yves Tyrode, director of data marketing services at Orange France. "But if you compare us to the UK and Germany, it's not really the case. You have to check the number of customers and the number of sites at the end of this year."

In other words, France Telecom intends to make up some ground on its European rivals -- er, friends. If any company in France can do it, this is the one, says Amy Cravens, a senior analyst with In-Stat/MDR in Scottsdale AZ.

"France Telecom is really the first company in France to have a larger strategy and initiative," Cravens says. "They're very focused on the business traveler. But there are also a lot of smaller players doing cafes and other retail."

However, France Telecom's strategy isn't particularly unique. Most of the Wi-Fi activity in France appears to revolve around travel venues. Passman, a Paris-based systems integrator, announced a new turnkey Wi-Fi hotspot offering for the hospitality industry in May.

Passman, which provides non-wireless networking and systems services, already includes major hotel chains such as Holiday Inn, Marriott, Best Western, Kyriad, Suitehotels, Novotel and Mercure in its customer list.

It's not just Wi-Fi hotspots. In June, Appear Networks, a Franco-Swedish wireless application developer and systems integrator, demonstrated an innovative application that will allow recently landed aircraft to automatically transmit technical data over a Wi-Fi network to technicians on the ground carrying tablet or hand-held PCs.

France also boasts a few Wi-Fi hotspot start-ups that are surprisingly well established given how recently the regulatory hurdles were removed. Kast Wireless, for example, has hotspots in more than 60 French towns and cities and a handful of other European cities. Most are in airports, hotels and conference facilities.

TLCMobile is going after exactly the same target market -- business travelers -- and venues. It says it will have 600 up and running by 2005. WiFiSpot, which is focused on the hospitality industry, has seven hotels up and running in Paris so far.

But it is clear that France Telecom intends to be the market leader. The Accor deal alone makes it a major player by any standards. It will make Orange the leading Wi-Fi provider in France, with the largest network of hotspots deployed by the end of 2003, the company says.

As of early June, Orange already had 25 hotels up and running and expects to have 400 in total by the end of this year -- 100 more than it was forecasting when the deal was first announced. The remaining 900 will be installed in 2004. The total is also up from the 900 mentioned in the original announcement.

Orange is installing Wi-Fi in the hotels' conference and meeting rooms, public areas and in at least 25 percent of the guest rooms. It's using mainly Cisco networking gear, although the access points are made by an Asian Cisco OEM.

In the hotels that are up and running, the service is free for now, while the company tests its market. Tyrode expects to go commercial by September.

The Air France deal will see Orange install 17 lounges this year, starting with major airports in France. Another 54 will go live next year, including important sites outside France such as JFK in New York and Tokyo's Narita Airport.

In keeping with its tight focus on business travelers, the company is unlikely to expand out of the lounges into other areas of the airports, Tyrode says.

While there is apparently still a possibility that Air France will either give the service away to its best customers or provide it at a discount, airport and hotel hotspots users will be Orange customers, and will be able to use all Orange hotspots.

They'll pay about $15 for two-hour and $50 for 10-hour prepaid packages. There will also be monthly subscriptions and discounted bundled deals for GPRS and Wi-Fi service. Orange eventually plans to offer seamless roaming between GPRS and Wi-Fi.

The company will also offer bundled deals in association with ISP Wanadoo, a 70-percent owned France Telecom subsidiary that provides high-speed residential access using ADSL. High-speed customers will be able to buy bundled hotspot service at a discounted rate.

Orange is involved in a new roaming initiative with other French cellular/PCS companies that offer hotspot services. Under the deal worked out with SFR and Bouygues Telecom, customers will be able to use hotspots owned by any of the three providers. The three will open the association to other hotspot operators as well, Tyrode says.

"We want French customers to have access to as many sites as possible," he says. "If we want [Wi-Fi] to be a success, we need to offer the best possible coverage."

Orange meanwhile is working on its own on roaming agreements with foreign service providers -- including U.S. aggregators, Tyrode implies. Some will be signed as early as July. The company is anxious to have deals in place for the expected September kick-off of commercial service.

Even without roaming agreements, though, Orange will have more to offer than most in France. The company is nothing if not ambitious. "We think that by the end of the year, we will have a very high market share," Tyrode says.



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