Craig Plunkett responds to the Edge Consult hotspot report: In a trial of introducing more voices to Wi-Fi Networking News, we're publishing a response to our recent coverage of the Edge Consult report on Wi-Fi from Craig Plunkett. Craig is the founder and head of CEDX Corporation, a network services and installation firm that has also rolled out hotspots in the Manhattan and New York area.
Craig writes:
It would be interesting to see who commissioned the Edge Consult report. Sounds like a European GSM carrier that doesn't have a Wi-Fi strategy. With only having access to the report's table of contents, I think their conclusions are way off base. The Cellular carriers still have to provide backhaul, and for that, RBOCs [regional Bell operating carriers, or the Baby Bells] and MSOs [cable multi-system operators] rule in the U.S. I don't know about Europe; that's probably still the PTTs [state-owned phone monopolies]. Plus, venues that have cell towers that carry massive voice volume receive big-time rents for these, on the order of US$10,000/month/carrier if you have a location on a major highway.
Will venue owners expect this level of compensation for carrier hotspots? You obviously have to deploy more hotspots in different locations than the cell antennas are currently located, so you can't leverage the existing real estate, T-1s or fiber to towers, unless you use 3G backhaul from the hotspot, and we know that story. The report also seems very Eurocentric.
As far as the fee or free model, it's not an actual study if it uses made-up data! I can do a study, too, that says fee-based profits are higher than free and publish it if I make up my own numbers. I don't really mind the conclusion of the report, because it discourages competition from other fee-based providers. Hey, the market's going to do what it wants, whatever my opinion is, but let's not have made up numbers sound like facts. What needs to be done is to get a hold of some numbers from a chain under the same brand where access is free in some locations, paid in some, and there's no access in others, all in the same geographical area. You also need to collect data from the users of the spots, on whether they're here just for the Wi-Fi, whether they'd pay for it or not, and at the places with no coverage, find out how many folks walked in expecting to be coverage due to brand association. Then you can make some real conclusions. Everything else is just speculation. I also disagree with their assessment of the hotspot market's maturity. I think its still in the tweens stage, not quite an adolescent.
There's one thing that always nags me though. There's no such thing as a free lunch. Didn't anybody get it when banner ads didn't work? To co-opt Paul Boutin's example, you may not be able to order the salt on the table off the menu, but you still pay for it. It's bundled into the prices of the menu items, just like the air conditioning in the hotel room, but you should still have to buy something to get it. There's a fantastic restaurant called Les Halles in downtown Manhattan that just put in a free Wi-Fi spot. If I walked in off the street with my take out slice of pizza, used a salt shaker, then walked out, the head chef, Anthony Bourdain, might come bounding out of the kitchen after me. Let's see what their reaction is when I stand outside the restaurant and use the Wi-Fi without buying the 14.95 Steak Frites for lunch. (Which is fabulous by the way.) We'll see how long free or non-complimentary lasts as ubiquity increases.
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