x
Carrier WiFi

Hotspots: Getting Hotter?

The takeup of public WLAN services may be up to eighteen months behind initial expectations, but the industry should get set for a hotspot frenzy in Western Europe and the U.S when it finally arrives, according to the market fortune tellers over at Analysys.

The consulting firm’s latest report, "Public WLAN Access in Western Europe and the USA," estimates the WLAN market to be worth a honking $5.5 billion by 2007, up from a piddly $33.4 million in 2002. It states that developments in Western Europe will soar like an eagle in this timeframe, with the region accounting for almost half of this overall revenue, compared to only a third today. The number of total hotspots in the two areas is also estimated to grow from 4,800 in 2002 to 57,000 by 2007.

However, the consulting firm’s managing director, Ross Pow [Ed.note: Wow!], admits that the company was forced to downgrade its initial expectations for market forecasts in 2007. “This is still an exciting market with loads of potential, but certain milestones are going to take an extra twelve to eighteen months to achieve,” he tells Unstrung.

So what’s holding things back then? Pow cites a lower level of investment due to carriers’ cautiousness over investing in an uncertain market where technological and regulatory issues are still to be resolved (see Gartner Warns on 802.11g and Public Access BlackSpots?), coupled with the fact that business models are still in the early stages of development.

Pow expects the 802.11 market to mature in different ways in different regions. In Europe, service providers will dominate the scene (last week's Swisscom AG (NYSE: SCM) deal (see Swisscom Buys a Bevy of PWLAN) will be typical, he says). In the U.S., on the other hand, "aggregators" like Boingo Wireless Inc., iPass Inc., and Wayport Inc. will dominate -- at least for the short term.

He also says the real money will come from consumer usage of 802.11 -- not business travelers. “Our long-term vision for this market is actually a consumer proposition,” he says, giving his crystal ball a quick wipe. “W-LAN offers fast and ubiquitous access to applications. This technology will never be big if it is just limited to the business user. Medium- and long-term, this is a mass consumer market.”

(To take this month's poll on public wireless LAN services, visit: Who Put the P in PWLAN?).

— Justin Springham, Senior Editor, Europe, Unstrung

lrmobile_castro 12/5/2012 | 12:28:51 AM
re: Hotspots: Getting Hotter? the wi-fi bubble is already showing signs of bursting and now this. Has Europe not learned from 3G or from all the US hot spot operators that have gone belly up? Apparently not.

The wi-fi bubble/hysteria is wi-diculous. Its a LAN technology and a good one but come on its not going to conquer the world one coffee shop at a time.

here is the bottom line. The tech industry and press have no other heroes now. Everything is dead or dying or just a flat out disapointment. WiFi is all that is left and its getting the full treatment from a tech industry that is hungry for hype or any sign of success. WiFi's success has been amplified 100,000X now. Can't we stop.

I await the burst of this bubble and the reintroduction of common sense. Wi-bust, coming to a tech journal soon.
lrmobile_fchang 12/5/2012 | 12:28:38 AM
re: Hotspots: Getting Hotter? Hi,

If what you say is true. What do you think is the viable business model for a Wi-fi provider. Is cometa, boingo, tmobile, or toshiba going to be profitable and where do you see the demand for wi-fi coming from if it is not end user consumers or business users.
joset01 12/5/2012 | 12:28:38 AM
re: Hotspots: Getting Hotter? I tend to agree with you about the bubble idea (see http://www.unstrung.com/docume... that doesn't mean that we'll ignore this stuff, because as you also point out there's a lot happening in the sector.

One thing that I'm working on at the moment is something on the real world costs of providing backhaul to public access hotspots. I can do some back of the envelope calculations (i.e a T1 line costs x hundred a month) but I'd be interested to hear from anyone that has actual experience of running a public access point.

Email me, [email protected]unstrung

Thanks

DJ Unstrung
Physical_Layer 12/5/2012 | 12:28:31 AM
re: Hotspots: Getting Hotter? You can backhaul using DSL pretty cheap. I've heard numbers in the $40 range. Obviously when you use DSL you aren't giving subs anything more than about 1Mb/s but that's pretty darn good and it's cheap. The T1 backhaul model could be a bit expensive unless you know you have enough subscribers to justify it at a particular location.
joset01 12/5/2012 | 12:28:30 AM
re: Hotspots: Getting Hotter? Yeah

I suppose DSL could be the way to go, it all depends on traffic density at a particular hotspot.

DJ Unstrung
Physical_Layer 12/5/2012 | 12:28:24 AM
re: Hotspots: Getting Hotter? I'll also add that it might make sense to wirelessly feed a bunch of hotspots with 802.16a as a backhaul connection. If you could get a cheap 10Mb/s Ethernet feed then why not plug this into a 16a base station that transmits point-to-multipoint as a way of backhauling traffic for maybe 30 or 40 separate hotspots? This way you are probably looking at about $1k per location in 16a equipment and you are taking the monthly cost of backhaul traffic down to a very low level. What is a competitive rate for Ethernet service over fiber these days? A couple hundred bucks for 10M? I'm pretty sure you could spread that over several tens of locations under lightly loaded conditions, and then you could always scale up the Ethernet feed as needed to accomodate traffic growth in the hot spot. This way you would not need to do any truck rolls to upgrade the backhaul at each spot.
lrmobile_castro 12/5/2012 | 12:28:21 AM
re: Hotspots: Getting Hotter? DSL backhaul at $40/month (consumer grade) will work if you are an incumbent local service provider or if you have one in your group, but won't sharing like that violate most DSL contracts otherwise?

By the way i reserve my cynicism for hot spots not wi-fi equipment sales, which have done quite well.

there is no doubt that some hot spot operators are going to do quite well, like the ones in airports and other transportation or business hubs. Its really when you start talking about 3000 or 5000 hot spots on the tiny island of Britain that i start to wonder.

That is aggressive to say the least and i just don't get it. To me that sounds a lot like trying to build a cellular phone network one 900 Mhz cordless phone base station at a time. There are cheaper and better ways to build coverage that will give you greater revenue potential.

john_babcock 12/5/2012 | 12:28:01 AM
re: Hotspots: Getting Hotter? I'm doubtful of the whole business, but very low cost equipement atleast helps make it possible. A single piece of gear with a DSL modem, firewall, router, and AP for about $250 that can be installed by a store owner starts the economics closer to viable. The approach with a T-1 line, a server, and an AP for $5000 has already put enough people out of business.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE