High Prices Smothering Euro Hotspots
By Carlo Longino, Thu Mar 04 20:30:00 GMT 2004
A new analyst report says the average cost of Wi-Fi access at a European hotspot is four times that of one in the US, with incumbent telcos' pricing levels stifling growth.
This report rang true with us, given our recent experience with Wi-Fi at the 3GSM show, where we had to shell out EUR 80 for 3 days'access. The report from The Kerton Group says that's about normal, with a daily access rate in France averaging EUR 25.50, compared to $7.70 in the US.
Analyst Derek Kerton blames the disparity on the high percentage of incumbent wireline carrier-owned hotspots in the EU, at 64 percent versus only 19 percent in the US. He says that while there are benefits, like higher quality of service, the lack of start-ups and independent providers like in the US market lets them get away with their ridiculous pricing levels.
Kerton argues that lower prices would give a significant boost to the market, and the increase in volume would more than offset any decrease in per-user revenues, and he's right. I'm no telecom exec, so maybe there's something to which I'm not clued in, but why introduce a new service, then price it so high nobody's going to want to use it?
If the carriers don't act, something's going to happen, and they're going to get whatever small amount of Wi-Fi business they've gotten yanked out from under them. We weren't the only ones to whine about the Wi-Fi at 3GSM, so the word is getting out. But CeBIT in a couple weeks is going to be even worse -- a ridiculous EUR 85 per day! How can carriers expect to grow their business with prices like this? And who's actually paying these prices?