Wi-Fi Hotspots, Evolving and Growing Despite Lack of a Solid Business Model

— October 03, 2010

The hotspot market continues to experience strong growth in deployed venues and usage, driven largely by wireless and broadband providers embracing Wi-Fi both as a competitive differentiator and enhancement to core services.
 
Despite the continued growth in hotspot deployments, the underlying business model has been in a continuous state of definition and development over the past decade, and remains a primary uncertainty in the future of the hotspot market, says In-Stat.
 
"We are a decade into the introduction of hotspot services and the market is still working out the revenue model," says Amy Cravens, market analyst. "Initially the market was based on pay-as-you-go revenues, with providers hoping it would evolve into ongoing subscriptions and corporate accounts. And while there has always been a free access component, branded hotspot venues like McDonald's and Starbucks have made free access pervasive, which may lead to a public that is resistant to pay."
 
Recent In-Stat research found:
--In-Stat's consumer survey identified security concerns as the top barrier to hotspot usage. Other top concerns are service availability and costs.
--Annual venue growth is expected to remain strong over the next several years, but will begin to slow in later forecast years.
--Europe will account for 40% of worldwide venues in 2010.
--By 2012, handhelds are anticipated to account for half of hotspot connects.
--Europe and North America are the largest hotspot markets based on usage (annual connects).
--On a per location basis, airport hotspot usage dwarfs all other venues with several thousand connects per month.

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