Wi-Fi threatens to steal 3G's thunder

Communications equipment maker Proxim has become the latest company to sell high-powered Wi-Fi networks that travel long distances, essentially providing buyers with an "ISP in a box".

These versions of wireless networks using the Wi-Fi, or 802.11b, standard create a wireless zone of up to 12 miles long, far beyond the usual 300-foot-radius range that Wi-Fi typically achieves, the company's chief executive, Jonathan Zakin said.

Overkill for use inside a home, where most Wi-Fi networks are currently found, the long-range Wi-Fi gear from Proxim and others is meant for small web service providers. It lets them beam long-range signals outside, particularly to sell broadband access in rural areas where DSL (digital subscriber lines) or cable broadband service haven't reached, Zakin said.

The new technology is a further boost to the long-standing 802.11b standard, but it may come at the expense of 3G, the set of standards that have been developed for sending and receiving broadband data such as live video and CD-quality audio from compact mobile phone handsets. Mobile phone network operators have found that rolling out 3G is a pricey proposition, with European operators alone having spent 1bn euros (about £640m) on 3G licences.

Proxim, which sells a third of the world's Wi-Fi equipment, is the largest company yet to enter the market selling long-range Wi-Fi equipment. Others with uber-Wi-Fi networks include cordless-phone maker Engenius and networking companies Linksys and D-Link. These companies said they've had success peddling the gear to Web providers that are even smaller than Proxim's customers.

A bigger fish than Proxim is around the corner: Chipmaker Intel is also interested in entering the market, according to Kurt Sehnert, Intel's mobile platform group manager. Intel will likely choose to partner with someone already making the equipment, rather than develop its own, he said.

The chipmaking giant, which recently announced a wireless strategy, is also readying a PC card modem, code-named Calexico. The card will contain the first Wi-Fi chips made by Intel and is expected to appear in notebook computers early next year.

The Proxim product can achieve long distances because the company boosted the power inside its access points -- the radios that create the network. It also added additional antennas to the access points so signals could be beamed directly to a home, rather than creating a cloud of access.

Proxim's product, priced from about $2,000 to $6,000 (£1,280 to £3,840), will include all the equipment necessary to become a small-scale network provider. The price differs depending on the quality of equipment and add-ons that a buyer may want. Each kit can serve about 250 customers.

By pushing Wi-Fi networks for outdoor use, Proxim and others are joining a new and growing market.

A cellular technology called w-CDMA (wideband code division multiple access) sends broadband access to rural areas, including the entire island of Maui in the Hawaiian archipelago. This technology is being used as the European standard for 3G.

Usually, w-CDMA signals travel all over, bouncing off trees or buildings. The signals themselves can get so misdirected they actually interfere with each other as they find their way to a handset or cellular base station's antenna, said Jon Hambidge, senior director of marketing for IPWireless, one of the companies that uses the technology. But IPWireless recombines the signals to decrease the usual number of dropped calls or suddenly ended Web sessions, which result from the misdirected signals, Hambidge said.

Ben Charny writes for News.com