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« Australian Firm Launches Next-Generation Cell Data | Main | Wi-Fi Alliance's Wi-Fi Zone Directory »

March 18, 2004

Wi-Fi Hotspot Revenue, Adoption Revised Downward

Wall Street Journal notes that adoption hasn't met predictions; analysts revising future trends downward: InStat/MDR estimates $28M in revenue last year from hotspots in the US this year and $80M worldwide. Gartner says operators won't be profitable until at least 2006. (This lumps together the largest and smallest operators into one bunch, of course.)

Cometa's ambitious plans are noted and compared with reality. A statement from the CEO seems to back away from numbers provided as recently as last fall, when the company reaffirmed to me in an interview their 20,000 target and the full-scale rollout to a couple of dozen cities.

The article doesn't tie my concern about the growth of actual locations to the slow revenue growth. With a slow-growing pool of locations and many, non-overlapping, non-roaming networks, it's impossible for revenue to increase rapidly.

Korea is cited as a place of rabid Wi-Fi uptake with one company, KT Corp., offering 12,000 hotspot and US$13 unlimited monthly access subscriptions. Their home broadband subscribers can add unlimited Wi-Fi for a buck a month. They have 364,000 Wi-Fi subscribers, which is probably 20 to 30 times the number in the U.S. including aggregators like Boingo and excluding aggregators like iPass (which don't figure into monthly recurring subscriber fees).

Europeans, by contrast, are charging arms and legs for Wi-Fi access, partly to protect their cellular data investment.

You can tell the reporters talked to Pyramid Research in Boston, because the end of the article cites a single free hotel which is used in Pyramid's cost analysis reports that indicate a trend towards free Wi-Fi in hotels.

The writers mention this single hotel, but omit noting that about 7,500 hotel properties in the U.S. are now committed to free Internet access using a combination of wired and wireless service.

1 TrackBack

Wi-fi Aha from Rodent Regatta on March 19, 2004 3:44 AM

Yesterday was one of those days when you have "aha" moments that overlap. Usually, the light bulb comes on due... Read More