Wireless Technology Poised to Become a Contender in Market

After years of development, wireless networking is poised to become a contender in the movement to connect the world to the Internet.

Technology pundits have talked for years about the promise of wireless networking with its easy installation and flexibility--all traits that seem compatible with computing’s future.

But the technology has always languished in an exotic niche either because of its high costs or low speeds. It was a solution that businesses turned to only in the most extreme situations and that consumers never thought about unless they were independently wealthy and very technologically savvy.

What has happened over the last year is the development of a variety of new technologies and products that have set the groundwork to make 2000 the year of wireless networking.

The contending companies are largely focusing on the fringes of the Internet--delivering high-speed connections from Internet service providers to businesses and homes, and providing wire-free connections for computers on a local network.

Unlike wireless mobile phone networks, which are hobbled for computer communications because of their very slow speed, new wireless data networks are designed to use receivers and transmitters that remain in a fixed position and can provide access that is as fast as most wired connections, such as DSL and cable.

These fixed wireless networks are easy to install, often requiring only an antenna and base station, and involve almost no work to change when new computers are added to the system or are moved to new locations.

The revenue from wireless will still be tiny and its share of Internet connections will be small compared with other types of high-speed access, such as DSL and cable lines, for businesses and consumers that rely on copper wires.

But analysts predict wireless’ share will grow as the systems become cheaper and more capable.

Strategis Group, a telecommunications research and consulting firm based in Washington, estimates that revenues from high-speed wireless access will jump from its paltry $11.2 million in 1999 to $3.4 billion in 2003. The figures exclude several large wireless business carriers that largely operate in their own frequency ranges.

Many of the pieces needed to make wireless a real option have taken place, from Cisco Systems’ development of a wireless system to transmit around buildings and trees, to the expected appearance of a 10-megabit-per-second wireless networking card (for about $150) from a variety of companies that will open the way to fast, cheap and easy home networking.

A new set of transmitters and ground-based antennas, however, must still be built for the wireless network to become widespread.

But the flexibility of a wireless network makes the technology an alluring prospect for Internet service providers and companies that run large, complex networks in their own buildings.

Natarajan Subu Subrahmanyan, a networking analyst for Sutro & Co. in Los Angeles, said the big equipment makers such as Cisco Systems, Nortel Networks, Ericsson, Nokia and Lucent Technologies have all made moves into wireless data networking and will be significant players in the emerging market.

And some of the first beneficiaries of this migration to wireless will be companies that own the radio frequencies for high-speed transmission, including Winstar Communications Inc. of New York; Teligent Inc. of Vienna, Va.; and Nextlink Communications Inc. of Bellevue, Wash.

Among smaller equipment companies, analyst Subrahmanyan said that Campbell, Calif.-based P-Com Inc. and Digital Microwave Corp. of San Jose--both makers of high-speed wireless networking equipment--should also be watched in the coming years.

Next year will also bring a continuation in the expansion of optical networking. Over the years, fiber-optic lines have become the main backbone for carrying data and voice transmissions because of their enormous capacity.

Some of the biggest acquisitions this year were of optical companies, such as Cisco’s purchase of Monterey Networks Inc. and Cerent Corp. for a total of $7.4 billion.

Farrokh Billimoria, a general partner with Sprout Group, a venture capital firm in San Francisco, said that next year, optical fiber will be used in many more parts of the Internet, bringing its ability to carry enormous quantities of information from the backbone to areas of the network that are closer to customers. In addition, technological developments will increase the capacity of the fiber lines to even greater levels.