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| Wednesday, 24 October 2007 | |
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World public Wi-Fi sector set to soar.
Worldwide Wi-Fi hotspots will grow to over 170,000 venues connected by the end of 2007 based on new research conducted by MultiMedia Intelligence (MMI). In addition, branded venues such as Starbucks and McDonalds are becoming increasingly important in driving incremental usage. While Europe remains the leading region in terms of hotspot footprint, with 42% of worldwide locations, According to MMI, the hotspot market is on the verge of a revolution - a revolution being driven by new users, new access devices, and new applications. In the near future, says the company, hotspots will not be just for business travelers. The increasing availability of dual-mode handsets in 2008 coupled with the anticipated introduction of lower priced access fees, will result in the hotspot user base broadening to include consumers. The beginning of a trend toward consumer usage is already evident; with consumers accounting for nearly 25% of connects in 2007, up from approximately 15% in 2006. This trend is anticipated to accelerate going forward. While revenue per connect is expected to fall significantly for cafés and similar venues, MMI believes revenues will be sustained by access fees in full service hotels and airports, which together will comprise over 90% of access revenues. To help offset the lower ARPU of consumers, hotspot operators are also beginning to explore new revenue opportunities including back office services, application/content offerings, and advertising to bolster revenues generated from access fees and roaming partnerships. MMI research has identified the following: · In 2007, handheld only accounted for 10% of connects. However, the percentage of handheld connects will increase in accordance with increasing installed base of handheld Wi-Fi enabled devices and the resulting increasing consumer usage. Handheld connects are expected to double as a percentage of total connects annually for the next few years. · Despite pricing pressure created by consumer-oriented offerings and the competitive threat posed by 3G and WiMAX, MMI foresees robust growth in hotspot revenues. · Roaming providers drive significant traffic to hotspot venues, as well as linking individual hotspot operators and branded resellers to promote mass market usage in their locations. Leading roaming providers include companies such as Boingo, iPass, Trustive and WeRoam. Among the leading hotspot operators are KT Nespot, The Cloud, AT&T, Sprint, and WayPort. · Market saturation has already largely occurred in Tier 1 venues, and by the middle of the forecast period it is anticipated that Tier 2 venues will be approaching saturation, at least among those venues that are perceived to be potentially profitable. Cafés are projected to have the highest unit growth over the forecast period whereas public venues and RV locations are projected to have the highest percentage increase. · While a smaller hotspot market presently compared to Europe and · The majority of hotspot usage continues to be pay-as-you-go. While growth in subscriptions or prepaid cards has been slow to date, MMI does believe that subscription revenue will increase nearly tenfold over the forecast period. We say: we think MMI may be on to something here, not least because of the popularity of the Wi-Fi-enabled iPhone (and the sort of lifestyle of its typical user), plus the recent appearance of Wi-Fi-enabled BlackBerry handsets. John Williamson |
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