Cost of Setting up a Wi-Fi Network

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Description:

The low cost of setting up a Wi-Fi network is one of the driving factors for its popularity besides being able to provide information anywhere and everywhere. To set up a Wi-fi network an access point or a gateway is required which send and receives radio signals and a Wi-Fi radio is required to be embedded in the devices like PC, PDA,Laptops etc. The major difference of a Wi-fi network as compared to other networks is that Wi-Fi operates in the unlicenced 2.4 -5 Ghz radio bands. So there is no cost of obtaining a licence as compared to other networks which have to pay billion of dollars to obtain a licence for a spectrum for transmission.

The prices of Wi-Fi access points and radios are falling sharply. The cost of a Wi-Fi radio chip which was around $16 in 2002 will drop to under $2 in 2006. Similarly the cost of Wi-Fi Aceess points which were around $1000 in 2002 are under $100 now and are expected to fall further. Also the Wi-fi card that was around $700 in 2000 is almost under $50 now and is approaching to be provided as a standard feature in most of the new PC's being manufactured today. Because of these low price to set up a Wi-Fi network and without any licence fees to be paid millions of wi-Fi networks have been set up as they also provide better speeds as compared to the traditional broadband and cellular networks.

Besides the cost of setting up the network the cost advantage of the Wi-Fi network is further enhanced by the usage charges for accessing data through a Wi-fi network which is a fraction to what is being charged by 3G cellular companies to provide data services. A typical data transfer over a 3G network costs aroung $1-$4 per megabyte whereas the same cost over a Wi-Fi network come out to be around $.01 per megabyte.

Enablers:

  • Unlicenced Spectrum of 2.4 Ghz and 5Ghz
  • Low cost Wi-Fi access points
  • Low cost of Wi-Fi radios
  • Low cost of Wi-Fi radio chipsets
  • Increased competition
  • Increased number of Wi-Fi hardware manufacturers
  • Support from the PC industry to counter data services from 3G companies

Inhibitors:

  • Interoperability of Wi-Fi equipments
  • Roaming agreements and fees charged by different networks
  • Limited range of a single access point
  • Coverage across cities and different countries

Paradigms:

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