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Vodafone: Cooling Off on Hotspots?

Light Reading
LR Mobile News Analysis
Light Reading
7/30/2003

Vodafone Group plc's (NYSE: VOD) hotspot aspirations have been called into question following a low-profile Irish deal that suggests the carrier may be reconsidering its long-term commitment to the public wireless LAN market (see VOD Ireland to Deploy WLAN).

Vodafone Ireland plans to deploy a network of wireless LAN hotspots throughout the region later this year. However, no launch date has yet been specified and the carrier is unable to confirm exactly how many hotspots are involved.

“We will deploy them before the end of this year, but it is certainly a couple of months down the line from now,” admits Joan Keating, head of corporate communications. “It will match whatever else is happening in the market and will be a comparable offering to the other wireless LAN operators.”

In light of recent activity from main rival mmO2 plc, Unstrung expects a paltry 50 hotspots to go live when Vodafone launches in Ireland [ed. note: Well, it is a long way to Tipperary].

According to IDC’s senior research analyst Evelien Wiggers, these plans are already behind schedule. “Vodafone Ireland showed some interest in hotspots towards the end of last year, so this announcement seems to be a bit slow since they are still talking about launching it towards the end of this year.”

Such delays have fueled speculation that Vodafone is losing interest in the market.

Michael Wall, industry analyst at Frost & Sullivan, believes the carrier may attempt to focus attention on its successful Vodafone Live! service rather than plough investment into an immature market!

“Wireless LAN doesn’t appear to be a major part of their strategy,” he comments. “They will probably want to keep away from wireless LAN given the fact they are heavily trying to push their Live! service and GRPS data card packages. In any case, the hotspot market is difficult to generate revenue from. It isn’t something most wireless carriers can make a lot of money on.”

“This isn’t a global embracing of wireless LAN,” adds Nick McQuire, European analyst at Pyramid Research. “It is very much a case of dipping its toes in the water to see how it works.”

Despite a recent pledge that wireless LAN will form an "important part" of the carrier's global development, Vodafone is yet to make a significant impact on the market (see Vodafone Preps for WLAN Move ). A deal to equip Lufthansa’s airport lounges is the only other evidence of its presence in the hotspot space.

— Justin Springham Live!, Senior Editor, Europe, Unstrung

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