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Wi-Fi phones might create new markets for business growth

By Sun Xiaofei (China Daily)
Updated: 2009-08-31 16:18

The Ministry of Information Industry's China Telecommunication Technology Laboratory recently revealed plans to permit and license Wi-Fi in addition to WAPI as China's national standard for the wireless LAN (local area network).

How will the use of Wi-Fi phones affect China's top three telecommunications companies and the wireless Internet industry?

WAPI - for WLAN Authentication and Privacy Infrastructure - is China's standard for wireless LAN.

It is a close-range wireless technology with consolidated security that was developed based on Wi-Fi, the international standard for wireless LAN.

Wi-Fi was designed to enable users to gain wireless access to the Internet at a maximum speed of 11Mbps in small and restricted areas such as the airport and coffee shops. This allowed its use in a majority of countries.

Laptops with Wi-Fi access have been available in China for some time.

However, since WAPI was made the national standard for wireless LAN, it became mandatory to produce and sell only mobile phones installed with WAPI access.

The Chinese government even tried to promote WAPI as the next global standard. In November 2003, the Chinese government petitioned the use of WAPI as the international standard. However, due to objections from US companies such as Intel and Broadcom, the petition was rejected.

In June 2009, WAPI won the support of previously opposed countries and became an international standard.

Accordingly, the Ministry of Information Industry lifted its restrictions and permitted the sale and use of Wi-Fi phones.

Once the government permits the use of Wi-Fi phones, the scale of China's mobile and Internet industry - as well as investment - will show considerable growth.

Related readings:  WiFi struggles to find a market: Survey  GrenTech to supply WiFi equipment for Olympics network  Chilean town is WiFi pioneer  Wifi malfunction hits Asiad venues

As the Wi-Fi network enters the Chinese market, the 3G network bandwidth limitations will be resolved, as well as concerns about an overload of the 3G network, which would result in an increase in rates.

China's telecommunications businesses have reported plans to increase their investment in Internet hot spots, which are areas where computers can connect wirelessly using either Wi-Fi or WAPI.

China Telecom reported that it would increase the number of hot spots to 100,000 by the end of 2009. At present, the number of China Telecom users - 3,000 in total - is no match for the numbers of China Mobile and China Unicom users, which are estimated at about 500 million and 100 million, respectively.

It is expected that China Telecom will benefit the most from the launch of Wi-Fi once the company launches Tianyi. Tianyi is a new brand that incorporates both CDMA and Wi-Fi and has the potential to absorb the majority of Wi-Fi users in China.

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