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Introduction

Public Access Wireless LAN's are arguably the most important commercial use of WLAN's today. This tutorial explores the different members of the value chain necessary to make public acess happen.

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Site Owner

Site owners are the location owners where WLAN access is being provided.  The site owner can be the owner of the hotspot infrastructure or could be providing WLAN access from a third party.  Site owners are introducing WLAN access services to attract customers and to increase customer retention at their location.  They could also be introducing WLAN access as a revenue generating service.  The WLAN service is not the core business of the site owner therefore they are utilizing independent third parties who can provide technical expertise, the necessary customer support and perhaps the billing mechanism for the WLAN access.  The third parties leverage the site owners’ customer base since they do not have their own subscribers.  Site owners need to deal with the issues of charging customers for this additional service and how would they share the revenue stream with the third party—i.e. who gets what percentage share of the profit?  Forming agreements with the site owners is key to the rest of the value chain since they provide the location and the customer base to provide the WLAN service.  However, negotiations are time consuming and costly causing a delay in the deployment of hotspots. 

Hotspot Operator (Planning, Installation, Management)

Hotspot operators have a wide variety of profiles: these include independent startups, various incumbent carriers, and independent site owners who wish to deploy their own network.  Hotspot operators believe there is a profitable business model in deploying WLAN access services, as data access is becoming a key component of daily activity.  Hotspot operators are trying to establish agreements and/or partnerships with site owners in places where people have the time and need to access data. Issues facing hotpot operators is the low barriers to entry involved in deploying such a service, the customer’s willingness to pay, causing their revenue stream to be easily jeopardized.   Hotspot operators are dependent on many parts of the value chain in order to provide their service.  I.e. without lucrative site owners and a large subscriber base, they basically don’t have a valid business model.  Hotspot operators can also play the role of system integrators in the value chain.  This means that they provide the physical installation, site planning, network management, operations and maintenance for their hotspot locations.  Otherwise, hotspot operators hire a third party to provide these services if they lack the expertise in managing such large public networks.

Backhaul Network Provider

Backhaul network providers include telcos who provide the backhaul telecommunications links such as T-lines.  The telecommunications link needs to offer enough bandwidth needed at a specific site to cover the subscriber base and must have the ability to expand with the increasing customer base. This is the key component of the value chain as the wireline carrier provides the needed BW to provide the WLAN access service.  Without it, WLAN access points would be useless. 

Internet Service Provider

The Internet Service Provider basically provides access to the Internet. For a monthly fee, the ISP will give the hotspot operator software packages, usernames, and passwords and Internet access. This will allow WLAN users to log on to the Internet and browse the World Wide Web and USENET, and send and receive e-mail. The ISP provider generally forms an agreement with the Hotspot operator, which provides a transparent physical and Internet connection service to the end user.

In addition to serving individuals, ISPs also serve large companies, providing a direct connection from the company's networks to the Internet. ISPs themselves are connected to one another through Network Access Points (NAPs).

Clearing House/Billing

One major issue currently with WLANs is the ability for users to roam away from locations covered by their service provider. This part of the value chain is still premature, yet very important for providing end-users authentication, authorization and multiple ways to access the service easily. This component will add tremendous value to the value chain because it provides mobility and ease of use, which end users are definitely seeking.  The Clearinghouse operator will aim at providing roaming, authentication, authorization, and billing mechanisms for the subscribed hotspot operators.  This will allow for various hotspot providers to carry each other’s subscribers at different locations where their networks are unavailable.

WLAN Equipment Supplier

WLAN equipment suppliers provide two key components; an access point or base station that is usually physically connected to a LAN, and a wireless network interface (wireless NIC) card wireless card that is either built-in to or added to a handheld, laptop or desktop computer.  The card can be built-in, or is given to users to install themselves, along with the required software drivers. 

Users

The end-user is the winner in the value chain.  There are two user categories: business customer and the regular end-user.  The business customer needs security and encryption as a priority while the regular end-user is only looking for Internet data access.   The customer is the key end of the value chain, because he/she is the revenue-generating component since they are the ones paying for the WLAN services.  The primary issue is the willingness of customers to pay since some expect WLAN access to be free of charge in certain hotspots such as hotels and airports.

Additional Resources:
See: WLAN Roaming
WLAN System Components
WLAN Environments and Architecture
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Books about: Unlicensed Spectrum (books)