IDC: Wireless hotspots get hotter

Malaysian Business, Dec 16, 2003

RECENT research by IDC revealed that, Public Wireless Local Area Network

(PWLAN) services has displayed steady growth over the last 12 to 18

months. Between 2002 and 2003, the market for PWLAN `hotspot' services has

increased by nearly 13-fold in subscriber terms. Currently, such services

are predominantly offered by fixed-line operators/carriers in conjunction

with their fixed-line broadband access services. As at June 2003, there

were close to 400,000 subscribers across the Asia/Pacific (excluding

Japan) region, generating total revenue of US$13 million, says IDC.

`The public WLAN hotspot services market in Asia/Pacific (excluding

Japan) showed steady growth up to first half of 2003, as fixed- line

operators ramped up location deployments,' says Tim Crowley, senior

analyst, Broadband Markets and Technologies. He says that despite the

existence of several different business and revenue models across the

region, service providers are moving forward with providing PWLAN as a

value-added service for subscribers.

The PWLAN market is expected to reach 700,000 subscribers by the end of

2003 for the Asia/Pacific region, generating total revenue of almost US$44

million. The current monthly average revenue per user (ARPU) is

approximately US$8. The PWLAN subscriber market is projected to hit close

to 7 million subscribers by the end of 2008 with total revenues exceeding

US$600 million.

However, in comparison with the total Internet access services market

(including both dial-up and broadband), this represents only 0.03% and 4%

of total revenue in 2003 and by of 2008 respectively. Despite the hype,

the market may remain small. `However, it is important for operators to

invest in the infrastructure to accommodate the provision of PWLAN

services, which will help them, remain competitive and also make

provisions for other long-term strategic reasons,' Crowley says.

He adds that in order for the provision of PWLAN services to reach its

full potential, roaming agreements, signed between service providers, that

allow users to seamlessly access multiple networks are crucial. According

to him, there are two broad categories of roaming agreements: domestic and

international. `Association type' agreements, permits subscribers to use

any of the operators' hotspots within the group, creating a network that

has the ability to greatly increase coverage areas.