The year 2005-06 marked a change in adoption of mobile technology. From enterprise WLANs and public hotspots to mobility applications like Blackberry, the transition was evident. More so, mobility went from niche to mainstream.

While enterprise and consumer markets continued to grow, the enterprise market primarily drove the WLAN segment. The 'anytime, anywhere' paradigm caught up rapidly with the enterprises leading to proliferation of the mobile workforce. On the other hand, the consumer market provided the necessary spurt to the smart handheld segment. This was largely driven by the upward moving limits of their spending power.

 Even as the different market segments under mobility gained significant foothold in the market over the previous year, it was mobile e-mail and SMS applications that emerged most popular ones among the enterprises. Apart from gaining sizeable market stability it gained more significant traction in terms of mindshare, thanks mostly to Blackberry. Though it's early days yet, 2005-06 was the year of the data wave take off on the growth curve.

In conjunction with applications, the WLAN and smart handhelds' market also witnessed a buoyant performance during the year. Within the wireless space it was the enterprise segment that primarily drove the growth run in WLAN adoption. Towards the end of the fiscal 2005-06, VSNL and GFA India (owner of the Pizza Corner and Coffee World brands) partnered to provide Tata Indicom Wi-Fi service in all 500 outlets that GFA India plans to rollout over the next five years. This will set the pace for a higher growth rate of hot spot rollouts in the fiscal 2006-07.

WLAN
According to our group telecom magazine Voice&Data estimates, the Indian WLAN equipment market was worth Rs 104 crore in FY 2005-06, up from Rs 83 crore in FY 2004-05. Thereby, a growth of approximately 25.3% was registered. As compared to this, the market grew around 60% in 2004-05. This lower growth rate was attributed to drop in the equipment prices. As a result, the revenue growth did not match with the previous year's growth rate.

With Rs 45 crore sales in WLAN in 2005-06, Cisco continued its dominant lead in the Indian WLAN market. D-link followed at No 2 with Rs 26 crore revenues. The next vendor, Netgear came in at Rs 9 crore, a huge gap between the No 2 and No 3 spots. There was increased focus on the SMB segment from the vendors, thereby making the scene very competitive in the SMB space as well. With awareness about productivity benefits of increasing wireless and fall in equipment prices, SOHO and the home market have the potential to become big consumers of wireless.

Growth Drivers: Reduction in prices of WLAN equipment as well as end user access devices like the laptop were the leading factors driving wireless adoption. The market also benefited on the regulatory front. The government completely delicensed the 2.4GHz band of low power applications and technologies early in 2005 for their indoor use. This had an impact on the market growth in FY 2005-06. This led to the proliferation of the mobile workforce as enterprises increasingly realized the inherent productivity benefits that wireless networks can offer.

The adoption of the concept of wireless as an extension to wired networking among the SMBs also gained ground. But large enterprises continued to rule the WLAN. According to the DQ-IDC Megaspenders Survey 2006, 31% of the participants among the top 200 enterprise segment adopted Wi-Fi in FY 2005-06. The technology found its takers especially among the oil companies, the survey reveals.  The SOHO/ home segment too made a few strides over the previous year. Last year we described the emergence of the consumer market with the technology becoming more affordable.

Some of the enterprises going the Wi-Fi way during the year included Wipro, GE, Infosys, Reuters, ONGC and HLL, BSNL, Uttaranchal Jal Vidyut Nigam, Central Soil Research, Dehradun, South Central Railway, Air Deccan, Pallavan Transport Consulting Services, Instrument Research Development Establishment, and Hyderabad Telecom, etc.

Educational institutions and hospitals were amongst the first to deploy WLAN in India. However, now the portfolio is well spread across the manufacturing, banking and financial institutions, large corporates and the government sector. Deployments at coffee shops, hotels and airports, which took off in the last two years, gained further momentum during the year.

From the applications perspective, WLAN forayed into more business critical applications. This trend started emerging in 2004-05. Even though e-mail and Internet access accounted for over 90% of the applications last year, there was a beginning of a shift towards using WLAN for some critical applications as well. In 2005-06 too this shift continued further as enterprises started relying upon the wireless network for their business critical applications.

Some of the applications that are coming on the wireless network are inventory management, video surveillance, real-time data, point of sale, etc.

Price Drops: The entry price for access points fell to below Rs 2,000 for the low-end segment and going up to Rs 5,000 for the ones with security management features, centralized management features and wider range. Interestingly, the market trend shows a shift from 11b to 11g. That is, from 11Mbps to 54Mbps. As a result, the users are getting more bandwidth at the same price levels. There is no significant drop in prices expected over the next 1-2 years. However, at the same price points, the market will move to 108Mbps speed levels.

This will continue till the WLAN throughput reaches upto 200-300 Mbps. From then on the throughput levels shall sustain and price levels should start dropping further. 

Which 802.11?: While both 802.11b and 802.11g have made significant inroads into the WLAN market, 802.11b has a larger deployment base given that it has been there for long. 802.11a too has had significant pull. In future, new WLAN technologies will emerge including 802.11n that will give throughput of 108 Mbps and 802.11e and 802.11r that offer enhanced security features.

The delicensing of the 802.11b technology early last year in the 2.4MHz space for in-building wireless LANs, was a step in the right direction. It has given impetus to the wireless networking industry. The de-regulation of 5 GHz spectrums for outdoor deployment is still a big barrier. De-licensing this frequency band would accelerate adoption of WLAN technologies like Wireless MESH.

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