WiFi hotspots succeed despite business-model uncertainty

Sept. 28, 2010
Forecast covering 2010-2014 says you'll see more hotspots pop up in the coming years.

If you thought WiFi hotspots were everywhere, the analyst firm In-Stat says you're wrong - because they will be showing up in more and more places over the next couple years according to the company's latest report on the subject. The success of WiFi hotspots comes despite a business model that has been constantly shifting over the past 10 years and remains uncertain.

In its report Worldwide WiFi Hotspot Usage Soars, but is Model Sustainable?, In-Stat says the market's continuing growth is driven mostly by wireless and broadband providers' embrace of 802.11-based wireless communication as both a competitive differentiator and an enhancement to core services. The report covers the years 2010 through 2014 and examines the worldwide market for public access in WiFi hotspots such as airports, cafes and restaurants, convention centers, hotels, retail environments, marinas, outdoor hospitality and public areas. The research includes worldwide market potential, usage, business models and competitive analysis. It also includes worldwide venue, usage and equipment forecasts. The forecasts are segmented by region and venue type.

Market analyst Amy Cravens who authored the report points out the marketplace hasn't yet completely figured out the revenue model. "Initially the market was based on pay-as-you-go revenues, with providers hoping it would evolve into ongoing subscriptions and corporate accounts. And while there has been a free access component, branded hotspot venues like McDonald's and Starbucks have made free access pervasive, which may lead to a public that is resistant to pay."

Some of the research's general findings include:

  • WiFi hotspot venue growth will remain strong for several years but will later tail off.
  • This year Europe will account for 40 percent of worldwide venues.
  • Airport hotspot usage is the leading venue on a per-location basis, by a longshot, with several thousand connects per month.
  • By 2012 half of hotspot connects will be made via handhelds.
  • Europe and the U.S. are the largest WiFi hotspot markets based on annual connects.

The report sells for $3,495. More information and online ordering are available from In-Stat.

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