As Users Warm up to Hotspots, Providers Face a Labyrinth of Obstacles
SCOTTSDALE, Ariz., June 19, 2002 -
With new providers streaming into the market, footprints expanding, and user levels beginning to escalate, the hotspot market is finally heating up, according to In-Stat/MDR. The high-tech market research firm reports that factors such as the falling costs of wireless Local Area Network (WLAN)-enabled laptops, an increase in the number of WLAN laptops in the enterprise, growing acceptance of remote work environments, and emerging OEM-provider and roaming relationships, will result in continuing development and momentum of public access over the next several years. The number of locations available for public access is estimated to grow worldwide from 2,000 in 2001 to 42,000 in 2006 with service revenues experiencing a corresponding growth, reaching $642.6 million in 2006, up from $11.3 million in 2001.
“However, as the concept for public broadband access booms, new issues of complexity and sustainability arise,” says Amy Cravens, an Analyst with In-Stat/MDR. “Providers must still find the delicate balance between the pioneer mentality of expanding footprint and the reality of subscription levels. Business models must be formulated to support the multiple layers that are feeding the hotspot market, from equipment vendors, to network providers, to roaming providers, to venue owners. Finally, marketing and branding efforts must be brought to the forefront as the amount and caliber of competition in this market escalates.” Despite these challenges, new providers, venues, localized WISPs and wide area carriers, are taking interest in the public access market. Worldwide, top carriers are launching trial services, and, in some regions, commercial offerings are already thriving.
In-Stat/MDR has also found that:
The principal wireless public area access markets to have emerged focus primarily on delivering services to the business traveler. Thus, the arenas in which this type of connectivity has surfaced are those locations that business travelers frequent most. Service providers are attempting to create a footprint that touches on multiple locations including, airports, hotels, train stations, and cafes.
The hotspot market in the United States and North America will continue to dominate the market through 2006. However, as a percentage of deployments, the North American market is expected to decline between 2001 and 2004. During this period, other regions are expected to outpace North America in growth of footprint.
90 percent of public access revenue will be derived from pay-per-use access in 2002, largely due to the relatively undeveloped state of the market. However, beginning in 2003, subscriptions will begin to account for a growing percent of the end-user market. In 2006 almost 50 percent of individuals’ public access connectivity will be subscribers to one or more services.
Recent In-Stat research, Revealing the Labyrinth: Hotspot Providers, Models, & Venues (#IN020166MU), discusses the providers, venues, strategies, and business models that define the hotspot market, evaluating these different forces on multiple levels. With the growing complexity of the market, this report focuses on defining and evaluating the various approaches and their effect on the overall health of the public access market. In-Stat/MDR has been covering the public access since its inception in late 1999.
For more information, contact:
Amy Cravens, Industry Analyst
Phone: 480-609-4545
Email: acravens@instat.com
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