At the very least, it is change that is expected to significantly enhance the ease with which consumers can untie themselves from cables that tether them to a single location for Internet access.
A move that will allow mobile access to not merely the Internet, but also office and other private networks.
The catalyst for change has been the advent of 802.11b wireless, so called WiFi, that via adoption of an inexpensive PC Card uses the unlicensed 2.4Ghz radio spectrum to allow 11 Mb/s connection to a wireless access point in an area of about 300 feet in radius.
Driven largely by the techno geek community, entrepreneurial operators of facilities where the public gather, such as caf�s and hotel lobbies, have been inspired to create their own access points to act as a means of attracting consumers into their facilities, and even raising a modest revenue stream into the bargain.
In an industry that loves to create buzzwords, the wireless access points in North America were quickly dubbed “Hotspots”, and it didn’t take long for dedicated operators to latch onto the idea and develop business models for construction of country wide and even international networks.
Such a network might contain thousands of hotspots with network access speeds that dwarf those of traditional cable or DSL broadband.
In the United States particularly, there are dozens of such operators who together encompass hotspot locations that cover everything from hotel chains, airports, churches and coffee shops.
The number of consumers prepared to pay for the privilege of taking their laptop into such facilities to access the Internet is growing, and it is estimated that approximately 1 million subscribers have signed up for access to hotspot networks, either on a monthly or metered basis.
Trouble is, few operators have been making money, and fewer still seem to have any idea how they will ever turn a profit.
Just last month Here U are, an operator that claimed to have the largest hotspot network in the United States, faced the grim prospect of closure, and even the better known Richochet closed its doors.
MobileStar built an extensive hotspot network, and even had a relationship with Starbucks where it boasts an installation base across some 1,200 of the company’s coffee shops, but still failed to attract the level of consumer uptake it required to keep it in business.
Voicestream picked up MobileStar out of chapter 11 at firesale prices, which put the company in the hands of Deutsche Telecom’s subsidiary T-Mobile in their acquisition of Voicestream in June of 2001.
In spite of the financial challenges, Deutsche Telecom isn’t the only European operator to catch on to the concept. Sweden has the HomeRun hotspot operator, Norway has Telenor.
And in perhaps the greatest endorsement for wireless hotspots from a prestigious operator, British Telecom recently announced the development of a wireless network across the U.K. that will deliver 4,000 hotspots within 3 years.
British Telecom have dubbed the project, “broadband access to people on the pause.”
The key to success is considered to be the old mantra of the retail industry; location, location, location.
Give the consumer access to a network where they want it, when they want it, and in the manner in which they want it. Consolidation amongst hotspot providers is inevitable, because subscribers don’t want to have multiple agreements with any number of hotspot operators in the different areas that they require access.
One agreement with a single operator that covers national and even international boundaries is the order of the day.
Moreover, those operators who just built anywhere and expected the consumer to come were missing the point.
One successful U.S. operator that has adopted the above strategy is Wayport.
Focused predominantly on the business traveller, Wayport has installed hotspots in locations where business people want access, such as hotels and airport lounges.
Unlike those who adopted the mass coverage approach, Wayport has been steadily adding subscribers and has seen traffic on its network grow by nearly 300 percent in the last year, and revenues by a similar figure.
In Europe, Megabeam has adopted a similar approach, concentrating on signing up exclusive deals with premium sites across the continent, including airports and railway stations, something that British Telecom would do well to watch out for.
As the market continues to evolve, it seems likely that targeted access for business travellers, with international cross billing relationships between hotspot operators, will likely become an indispensable service for road warriors.
But at the consumer level, it remains to be seen whether the corner store approach can survive.
Paul Hutton-Ashkenny is the president of Systems Resource Group Limited and Bahamas On-Line. Business partners include Cisco Systems, Mitel, HP/Compaq, Microsoft. Questions/comment/info P.O. Box N 3920 Nassau, Bahamas or info@srg.com.bs
Source: The Nassau Guardian
