Be The Media

New study takes a look at the wi-fi market

From Multichannel News:

"Pronto Networks, which offers operational support systems for Wi-Fi wireless networks and hot spot locations, has released a usage study from TeleAnalytics Inc. that will pique the interest of cable operators.

The study delves into current hot-spot activity in areas such as hotels, multiple dwelling units and RV parks, as well as providing revenue and usage patterns statistics. Many cable operators have just begun dipping their toes into the wireless-fidelity waters as an adjunct to their cable-modem business.

The study found that café hot spot users are online an average of 1.5 hours per day, compared to just under four hours per day by users at Wi-Fi-equipped hotels. Cafés were at their busiest at 2 p.m., while the peak time at hotels was 9 p.m. Peak usage at MDUs, RV parks and other areas where service is based on monthly-subscription models was 8 p.m.

The survey found that revenue at hotel locations was based on a number of factors, including hotel location, pricing and Wi-Fi coverage, but it can exceed $30 a month.

Download rates also varied by location, with hotels averaging 50 Megabits per second, compared to 20 Mbps at cafés.

“We found that a number of hot spot locations are actually doing very well,” said TeleAnalytics principal consultant John Pantelidis in a prepared statement. “Given the right capex planning, marketing, pricing strategy and location selection, hot spot operators can expect speedy service uptake. Same hotel Wi-Fi usage growth sometimes exceeded 150% in a single year.”

Bells offer free Wi-Fi equipment to defend their turf

Jesse Drucker reported for the Wall Street Journal:

"There's a new weapon in the war between cable operators and telephone companies to capture high-speed Internet customers: free or discounted Wi-Fi equipment.

Wi-Fi, which allows consumers to cut the cord by using wireless signals for high-speed Internet access, file sharing and printing, has soared in popularity over the past three years. Millions of people have set up systems in their homes and offices.

Now, local phone companies that are trying to steal market share for their Digital Subscriber Line services from cable rivals are using Wi-Fi to lure new customers. Verizon Communications Inc. and BellSouth Corp. now give away free Wi-Fi routers to new DSL customers after a rebate. Qwest Communications International Inc. includes Wi-Fi capabilities in every DSL modem it sends to customers. SBC Communications Inc. has sold the equipment to more than 700,000 DSL customers.

It's the latest salvo by the big Bell telephone companies to keep cable modems out of people's homes and businesses — and, the Bell companies hope, stalling cable's entry into the telephone business. For years, the nation's big local phone companies were slow to offer high speed Internet access via DSL, focusing instead on renting second phone lines for Internet access. Cable companies, worried about competition from satellite television providers, got a head start as they aggressively rolled out cable modems to gain a competitive advantage. "

"In a huge threat to the U.S. telecom industry, cable companies and some phone carriers are increasingly offering telephone service using Internet technology. Such Internet calling services require high-speed connections like those offered through cable modems or DSL lines. That means the battle for market share between DSL and cable modem services is no longer merely about Internet access — it puts telephone companies' core voice service at stake as well.

Telephone companies acknowledge that their main business is moving away from voice calls over their traditional copper networks. "We think that the future core product for Verizon is broadband," says Eric Rabe, a Verizon spokesman. "You want now to capture that market and want to do that as aggressively as you can, and you certainly don't want to cede it to the cable guys." He says the company actually turned a small profit on the routers it sold before starting the full rebates. (Verizon pays for the router rebates which it says will end later this month.)"

Where entrepreneurs go and the Internet is free

Matt Richtel from New York Times reports:

"At cafes, malls and downtown business districts, there has been an explosion of Internet access points, or Wi-Fi hot spots, that let computer users log on to the Internet for free. That growth is a fundamental reason - though not the only one - that technology start-ups, investors and industry analysts who had high hopes for Wi-Fi are scrambling to find sustainable business models."

"The number of Wi-Fi hot spots has grown rapidly in the last year, with as many as 15,000 in operation in public locations, according to the Yankee Group, a market research firm."

"But the difficulty of making a profit was made evident last month with the demise of Cometa Networks, a well-heeled Wi-Fi start-up backed by I.B.M., the Intel Corporation and the AT&T Corporation. Cometa, founded in 2002 to build a network of access points at retail outlets, announced on May 19 that it would suspend operations because it was not providing a suitable return to investors. Verizon Wireless, which said last year that it would build 1,000 Wi-Fi hot spots in Manhattan, has cut that number to around 500. "

"T-Mobile has 4,650 Wi-Fi hot spots in Kinko's, Borders Bookstores, hotels, airports and Starbucks cafes, and it is adding 35 a day, the company said. Last week, it announced plans to deploy hot-spot connections in 122 Hyatt Hotels in North America. Users pay $9.95 for single-day access, $29.99 for a monthly access to all hot spots in the network or $19.95 a month if they are customers of T-Mobile's cellphone service."

SBC enters deal with McDonalds to offer Wi-Fi

From Wall street Journal:

"SBC Communications Inc. announced Monday that it plans to offer Wi-Fi, or wireless access to the Internet, at 6,000 McDonald's Corp. restaurants around the U.S. in the next 12 months.

The move comes on the heels of other Wi-Fi initiatives by SBC. In March of this year, SBC said it planned to roll out Wi-Fi access to 3,000 United Parcel Service Inc. stores around the country, one of the largest such rollouts yet."