Cloud Prepares to Reign
The NWP tie-up will add an eventual 7,000 hotspots to the 3,000 sites The Cloud plans to launch by the end of this year (see Cloud Looms Over UK Hotspots). This would make it by far the largest public wireless LAN network in Europe.
“It is one of a number of deals we will do in the next few months,” The Cloud’s managing director George Polk tells Unstrung. “We have other, not dissimilar, deals in the works right now.”
Despite its bullish approach, some observers remain chary of the company’s decision to attempt such a widescale rollout in light of recent gloomy market forecasts from Forrester Research Inc. (see WLAN: The Next Dot-Com Crash? and Is the Hotspot Honeymoon Over?).
“Forrester’s report was universally recognized as the most pessimistic, stating that the revenues for public access WiFi will be £1.9 billion [US$3.02 billion] a year in 2008. Well, I am happy to be part of a £1.9 billion industry,” counters Polk. “You don’t have to have a huge level of penetration in order to be generating profits on a network like this.”
Polk is certain that revenue will filter through in the next twelve months. “We expect significant traffic on the network next year, though not this year. No one has ever built a network this size, and it takes a little while to iron out the kinks.”
Forrester’s man himself is less convinced. “I can’t see how there is a business case for hotspots in bars and payphones,” says senior analyst Lars Godell. “It doesn’t seem to be a realistic business offering. I question the viability to make money from such services.”
As a result, The Cloud’s future plans may yet end up drawing comparisons with U.S. project Cometa Networks Inc., which has so far struggled to hit anywhere near its original targets (see Cometa's Hotspot Hassles).
— Justin Springham, Senior Editor, Europe, Unstrung