US players to shake up Europe's pricey WiFi scene

A fierce battle is looming to win the hearts, minds and wallets of the burgeoning army of European corporate WiFi road warriors. Although wireless roaming is still in its infancy, existing high service tariffs are likely to fall as competition heats up from North American market entrants, the latest report from London-based consultancy BroadGroup predicts.

The study, Wi-Fi Tariffs Europe, notes that the status quo is dominated by relatively high-priced tariffs targeted at corporate users. But new US kids on the European WiFi block are set to shake up to market.

"Retail prices for public Wi-Fi in Europe remain quite high although there is some evidence of overall decline, but it is slight," said report author Philip Low, managing consultant at BroadGroup.

The research firm says the impact of new players is very limited right now, but it expects to see significant reductions on tariffs "over time" as competition heats up.

Evidence cited in the report suggest that service providers are still "experimenting" with tariff categories. Despite apparently unsustainable pricing by some WISPs, there is an increased focus on standardised products suggesting that market is already moving towards commoditised and cheaper products, BroadGroup states.

According to the study, there is a clear relationship between pricing and deployment. It believes that the degree of pressure on prices in Europe over 2004, will relate directly to the number of hotspots deployed, together with the willingness of service providers and aggregators to agree further roaming agreements.

The report assessed European hotspot deployment and found that over 71 per cent of hotspots reside in only five countries in Europe. "The remainder of countries covered in the report have deployed less than the benchmark. Put starkly, Europe and Eastern Europe combined have a lower hotspot population than South Korea. Execution of the announced deployment plans over the next twelve months will really determine the future of public Wi-Fi across the region."

Based on 12 months of research covering 97 providers service providers in 20 countries across Europe, the report found that the average price for one-hour connectivity via public access WLANs in Europe is €6.47 (less taxes). ®