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WLAN Hotspots warm up

Obstacle race

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Two WLAN hotspot surveys are out (or rather publicised for the first time). this week and both predict roaring trade. There’s a difference opinion over the numbers, but both InStat/MDR and TeleAnalytics (TA) predict big growth.

By 2006, InStat reckons that WLAN hotspots will reach 46,000 worldwide, up from 2,000 in 2006. TA says there will be 47,000 hotspots in hotels alone.

The lion's share of activity in the short term will take place in North America, according to InStat, but don’t forget Japan or Korea, TA recommends - in the latter country the big two telecoms firms are gunning for 25,000 hotspots by the end of this year.

By 2006, service revenues should reach $642.6 million in 2006, up from $11.3 million in 2001, InStat forecasts. But there is a "labyrinth of obstacles", the analyst firm warns. Both InSTat and TeleAnalytics cite the difficulty in assembling workable business models in this multilayer, multiplayer market, encompassing “equipment vendors, to network providers, to roaming providers, to venue owners”.

As competition escalates, branding and marketing will need to come to the forefront, says InStat. TeleAnalytics reckons that while
"'roamers'(like Boingo or HereUare) got significant media attention, they are in a weak position to face the majors. The roamers can hardly afford to build their own networks and to run comprehensive customer acquisition campaigns".

Currently, pay-per-use accounts for 90 per cent of public WLAN revenues, reflecting the underdeveloped state of the market, according to InStat. TA notes the poor results of efforts to promote subscription services by mobile and other WLAN efforts in North America and Europe.

“The situation will improve for the operators only when coverage improves and also when combined WAN/WLAN offerings as the one announced by T-Mobile become common.”

This could be as soon as next year, according to InStat.

The big activity in hotspot sighting is where business travellers congregate, especially hotels and airports. Leisure locations such as cafes are proving popular to in Asia Pacific, but in North America, the Starbucks WLAN roll-out has been at a standstill "for months".

According to TA, operators have "started realizing that the café WLAN users and business travelers are basically disjoint sets. As recognition of this reality and the different amount of money that can be charged at hotels as opposed to cafes, Mobilestar already introduced two different pricing plans". ®

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