Wi-Fi Hotspots... Still Not That Hot
By Mike Masnick, Wed Apr 20 02:30:00 GMT 2005

The focus on operators providing Wi-Fi hotspots has died down over the past year. However, when operators are asked again about hotspot usage, the silence is deafening.

With all the focus on other wireless broadband technologies and the growth of free Wi-Fi hotspot, there haven't been that many stories lately looking at user acceptance of fee-based Wi-Fi hotspots. In the past, whenever stories have talked about actual usage, the numbers have seemed rather dismal -- often leading people to question why those hotspots don't just go free, as they'd probably save money without having the administrative overhead.

Plenty of technologies, though, start out by disappointing the early critics and then, once out of the spotlight, come back to surprise people. However, it appears that isn't happening in the hotspot business to any real extent. A reporter who went searching for hotspot usage numbers has found an awful lot of silence everywhere he looked. None of the operators seem willing to say anything at all about user adoption -- leading to the conclusion that there's just not that much to talk about at all. The only operator who did agree to give some indication, did so anonymously, and gave a somewhat cryptic answer, noting that the hotspot business provided 0.002 per cent of the company's revenue. While tiny, that number is actually misleading. Depending on how much the company is making elsewhere, you have no idea if that 0.002 is actually significant.

However, it still seems clear that there hasn't been a real rush on using fee-based hotspots. Part of the problem, though, may be that many of the operators providing hotspots have a conflict of interest in that they're also working on wider area broadband solutions using cellular technology. Either way, though, it seems that many in the mobile space have over-estimated the need for fee-based hotspots, when the average user has little need to pull out a laptop on the go. It's certainly a nice-to-have for many, and business travelers find it quite useful -- but there's very little indication that there will ever be a mass market for fee-based hotspot usage. This, of course, lends support to the idea of just opening up the hotspots for free. If it's not going to be possible to build a real business out of them, why not just use the hotspots to attract more regular business at those locations? It appears that, so far, only a few hotspot operators have adjusted their business model to this reality, but it seems likely that others will eventually recognize the inevitable.