June 11 2003
 

While the landscape of the hotspot market has changed in terms of number and type of venue, and the universe of providers addressing this market include some of the top fixed-line and mobile operators, there continues to be challenges in the hotspot model, reports In-Stat/MDR (http://www.instat.com).

The high-tech market research firm finds that increasing hotspot usage is the principle challenge to the model, to date.

While the number of hotspot venues has increased from several hundred to tens of thousands worldwide in the past 3 years, usage has not grown at similar rates with connects per location, per day remaining very low, especially in the café and retail venues.

Factors behind the low hotspot usage rate stem from a variety of factors including lack of awareness, non-target venue deployment, and incongruence between existing pricing plans and consumer expectations. While providers have taken steps to address some of these challenges, such as realigning pricing plans, there continue to be challenges ahead.

Awareness of these challenges is resulting in a very cautious approach by some potential new entrants. Many of the fixed-line and mobile operators continue to explore the market, with some launching trial offerings, yet they remain hesitant to commit to a full-scale deployment.

Furthermore, perspectives on how WLAN will integrate with 2.5/3G services also vary widely, with some providers fully embracing WLAN and others still remaining very skeptical and defensive. However, with a concentrated approach to venue deployment and appropriate strategies to incorporate hotspot access into corporate level remote connectivity capabilities, the hotspot market, and those players involved, will thrive.

In-Stat/MDR has also found that:

• While new players are hesitantly testing the waters, a new wave of hotspot deployments, the wholesale model, is emerging to again reshape the hotspot market. Initiatives, such as Cometa in North America, and the Cloud in the UK, anticipate massive hotspot rollouts that promise to dwarf existing provider footprint.
   
• While there are a variety of potential challenges for the hotspot market that continue to lurk on the horizon, there are also numerous encouraging developments. Increased familiarity with, and use of, WLAN, availability of WLAN enabled laptops, and discussion and standardization forums will all help promote use of hotspots. The worldwide, for-fee hotspot market will grow from 12,235 locations worldwide in 2002 to 145,417 locations worldwide in 2007.
   
• Despite the concern over the sustainability of café venues, these continue to account for the vast majority of hotspot deployments, followed by hotels.

This Market Alert is drawn from the In-Stat/MDR report, "Hotspots: More Hype than Hip?" (#IN030657MU), which examines recent trends in the hotspot market including increasing deployment scale and management of larger networks, integration of WLAN into an existing service and billing architecture, and evolution of clients and APs in the hotspot market. Additionally, there are some market challenges, including appropriate alignment of venue deployment to target audiences, establishing roaming models and relationships, and determining future service applications.

Location, service revenue and equipment revenue forecasts are included, offering worldwide and regional numbers. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/cat-mtb.htm or contact Erin McKeighan;

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