Technology | Media | Telecommunications

Wednesday, August 20, 2008

Why Free Wi-Fi Hotspot Service is Bundled

The number of Wi-Fi hotspots providing public wireless LAN access continues to grow globally and more people are using them, according to the latest market study by In-Stat.

But access revenues for service providers do not appear to be keeping up with the growth in use, the high-tech market research firm says.

"Because of this trend, hotspot operators are turning to other methods to generate revenues," says Daryl Schoolar, In-Stat analyst.

"Operators have started bundling hotspot access with other services, such as fixed and mobile broadband. This way, consumers can access hotspots without paying a separate fee, and operators can generate some access revenue by bundling the cost of the service into a bigger service package that consumers are willing to purchase."

The research covers the worldwide market for wireless hotspots. It provides end-user data on how and where the service is used and consumer willingness to pay for hotspot services.

Supply-side analysis on how operators are changing their business strategies and global forecasts for hotspot venues and access revenues are included. Results from an In-Stat survey of U.S. consumers are provided.

In-Stat market study found the following:

- According to an In-Stat consumer survey, people are increasingly using hotspots for personal reasons.

- Survey respondents are showing an increased reluctance to pay for hotspot access.

- Nearly 50 percent of respondents said they would only use a free hotspot.

- Bottom line, access revenues from Wi-Fi will start to decline due to increased competition and user's reluctance to pay. This is destined to be a no-margin non-profit business.