Carrier WiFi

KPN Signs Piddly Deals

KPN Telecom NV (NYSE: KPN) is the latest European incumbent to make a move on the region’s potentially lucrative public wireless LAN market.

Albeit a rather modest move. Tiny, in fact. Very, very small. The operator just plunked down a not very impressive €1.5 million (US$1.7 million) to buy a majority stake in Dutch hotspot provider HubHop. [Ed. note: Love their pancakes!]

KPN’s mobile venture, E-Plus Mobilfunk GmbH, has also arranged a gateway into the more developed German wireless LAN market by signing a "letter of intent" for hotspot rollout with local business NetCheckIn GmbH.

KPN’s pennies have bought it 35 hotspots in Holland. According to KPN spokesman Marinus Botman, the German piece of paper also gives the carrier access to a “similar” number of further hotspots, the majority of which are located in hotels.

KPN is playing catchup following recent efforts by rival European carriers France Telecom SA (NYSE: FTE) and Swisscom AG (NYSE: SCM) to enter the public wireless LAN market (see Swisscom Buys a Bevy of PWLAN and FT Outlines WLAN Plans).

Swisscom Eurospot has strengthened its grip in continental Europe by announcing a wireless LAN roaming agreement with French carrier SFR (see Swisscom, SFR Link Hotspots). From next month the partnership will give SFR customers access to the 900 hotspots operated by Swisscom Eurospot throughout the continent.

In fact, analysts note that KPN’s plans pale in comparison to Swisscom’s record of success, and that the Dutch market in particular is still underdeveloped in terms of public hotspot use. "Swisscom Eurospot has a good pan-European coverage area at present, and maybe KPN just feels that it has to make some kind of impression on the region,” comments Evelien Wiggers, senior research analyst at IDC. “It has to step in now because of all the smaller players Eurospot is buying.”

KPN's Botman says the firm is unlikely to embark upon a European hotspot buying frenzy. “We do not anticipate further acquisition activity in the very near future,” he tells Unstrung. Last month, research by Metrinomics backed up the logic behind such a strategy, predicting that wireless LAN will establish itself as the dominant wireless infrastructure within the next five years at the expense of 3G services (see WLAN to Squeeze Out 3G). Analysys Research Ltd. also expects Europe’s service providers to dominate a market which could be worth a honking $5.5 billion by 2007 (see Hotspots: Getting Hotter? ).

Some other analysts are more cautious: Yankee Group predicts that the hotspot market could be worth $1.63 billion by 2007 but says that carriers need to find a way to integrate local services with cellular offerings to make 802.11 work. Meanwhile, the more developed North American market has already seen its first high-profile public wireless LAN provider collapse, as Joltage Networks shut down earlier this year (see Joltage Shocks the PWLAN Market). HupHop is based in Holland. Isn't that weird?

— Justin Springham, Senior Editor, Europe, Unstrung

COMMENTS Add Comment
Be the first to post a comment regarding this story.
Sign In