November 22, 2002 12:21 PM PST

Verizon takes Wi-Fi to the office

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Verizon Communications is turning up the heat in the telephone industry's Wi-Fi wars.

The Bedminster, N.J.-based telecommunications company announced this week that it has begun selling Wi-Fi wireless networking devices from manufacturer Proxim, with small and midsized businesses the target for sales. Wi-Fi, also known as 802.11b, is a technology that enables the creation of wireless networks with a radius of around 300 feet.

Verizon joins Nextel Communications in hunting for corporate dollars spent on Wi-Fi networks.

"Wi-Fi for the masses has lots of logistics issues," such as the need to authenticate network users and security, said Verizon spokeswoman Katherine Hogan-Lewis. "We think (targeting businesses) is the appropriate choice."

The Wi-Fi networking gear from wireless equipment maker Proxim varies in price depending on how many employees an office has. For example, a network for 10 laptops and 10 personal computers costs about $4,200, Hogan-Lewis said.

Verizon's move comes amid increasing interest in Wi-Fi wireless networks, which let a growing range of different devices connect to one another without a wire being strung between them. In-Stat/MDR researchers have predicted that by 2005, there will be more than 55 million Wi-Fi networking hubs in U.S. homes and offices. Most of the nation's current crop--estimated to number eight million--are in homes, typically to provide a mobile connection for laptop computers.

Telephone companies in the United States began advancing into Wi-Fi last year, hoping to cash in on the projected riches. The result has been a two-front battle for Wi-Fi spending.

On one front, companies are fighting to attract those tech-savvy travelers or café denizens who want broadband access anywhere. For example, T-Mobile subscribers can get unlimited access inside hundreds of Starbucks for $30 a month. Sprint PCS is exploring a similar service.

However, Verizon and Nextel have a more selective focus: their existing business customers. Businesses are providing the first profits for landline and cellular carriers venturing into wireless networks, not consumers buying access inside Starbucks, said Gemma Paolo, a wireless analyst with Cahners In-Stat.

"Nobody has found a viable model for selling broadband inside cafés yet," Paolo said.

For now, Verizon is selling its new Wi-Fi devices only to customers in the Boston area--a way to test the corporate market before launching a more extended U.S. offensive against Nextel.


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