By Yuanzhe (Michael) Cai, Senior Analyst

Publish Date: August 03
Purchase Report Online

Wi-Fi® networking solutions have revolutionized the way in which users in the office and at home access data. Now, a much-hyped “next frontier” is the public access market – hotels, airports, the local coffee shop, and other locations. This report comprehensively dissects this market – from a thorough examination of the technology and service players (and their subsequent business models), all the way down to primary consumer data that pinpoints both the opportunities and challenges for this sector.

“The hot-spot market is likely to suffer from a prolonged infancy, despite the rosy forecasts proffered by industry pundits,” said Yuanzhe (Michael) Cai, research analyst with Parks Associates. “Our latest consumer research suggests that approximately three percent of Internet users have used public hot-spot services and only five percent of these users converted into subscribers. Although consumer familiarity with hot-spot services has increased significantly since 2001, the adoption rate among Internet users has seen little improvement.”

Download TOC PDF or read the press releases Parks Associates Offers Conservative Estimate of Hot-Spot Users and Service Revenues for Hot Spots will Exceed $800 Million by 2007

2.0 State of the Public Hot Spot Market
   2.1 Categories of Public Wi-Fi Hot Spots
      2.1.1 Location-Based Hot Spots
      2.1.2 Carrier-Owned Hot Spots
      2.1.3 Hybrid Hot Spots
      2.1.4 Hobbyist Hot Spots
      2.1.5 Co-op Hot Spots
   2.2 Overview of the Public Hot Spot Market
      2.2.1 Market Snapshot
      2.2.2 Important Market Trends
         Growing Interest from Telecom Carriers
         Blue-Chip Momentum
         Changing Attitudes of Venue Owners
         Emergence of Aggregators
         Proliferating Strategic Alliances
      2.2.3 Operator Market Share
      2.2.4 Venue Share

3.0 Important External Factors
   3.1 Technology
      3.1.1 Wi-Fi
         The Wi-Fi Alphabet Soup
         Wi-Fi Standardization, a Double-Edged Sword
         Concerns over Using Wi-Fi in the Public Space
            Security/Privacy
            Interference
            Quality of Service (QoS)
         Technical Considerations for Hot-spot services
            Authentication, Authorization, and Accounting (AAA)
            Roaming Brokers/Clearinghouse
            Network Management
            Network Scalability
         Wi-Fi Enabled End-User Devices
            Computing Devices
            Non-computing Devices
         Voice over Wi-Fi
      3.1.2 Alternative/Substitute/Complementary Technologies
         Cellular Technologies (Case Study: CDMA2000 1XEV-DO)
            Case Study: CDMA2000 1XEV-DO
         WiMAX
         Mesh Network
         Other Broadband Wireless Technologies
   3.2 Government Policies: More Free Spectrum
   3.3 Social Changes: a Wireless Generation
   3.4 Economic Environment: a Hostile Capital Environment

4.0 Supply-side Analysis
   4.1 Drivers
      4.1.1 Low Barriers to Entry
      4.1.2 The Centrino Campaign
      4.1.3 Declining Costs of Equipment and Services
      4.1.4 Innovative Network Setup
      4.1.5 New Software Solutions
      4.1.6 Creative Partnerships
      4.1.7 Growth of Wireless-Enabled Laptops
   4.2 Inhibitors
      4.2.1 Inherent Fragmentation
      4.2.2 Lack of Roaming Agreements
      4.2.3 No Clear Business Model
      4.2.4 The Grassroots Image
      4.2.5 Arduous Venue Negotiation Processes
      4.2.6 Sparse Marketing Efforts
      4.2.7 Lack of Wi-Fi Enabled Non-computing Devices
      4.2.8 Backhaul Issues

5.0 Demand-side Analysis
   5.1 Identifying the Early Market Segment: Road Warriors, Mobile Workers, and Small Business Owners
      5.1.1 Segment Profile
         Road Warriors
         Mobile workers, Telecommuters, and Small Business Owners
         Road Warriors and Portable Gadgets
      5.1.2 Practical Concerns of CTOs
      5.1.3 Market Sizing
      5.1.4 Current Business Practices Targeting Road Warriors (Case Study: iPASS and J.D. Edwards)
   5.2 Primary Consumer Perspectives
      5.2.1 Consumer Familiarity
      5.2.2 Usage Pattern of Current Users
         Where
         Who Paid
      5.2.3 Demographics of Potential Hot-Spot Users
         Consumer Interest and Age, Education and Income
         Consumer Interest and Internet Connectivity
         Consumer Interest and Ownership of Home Networks
         Consumer Interest and Ownership of Portable Devices
         Consumer Interest and Familiarity with Hot-spot services
      5.2.4 Interest in Service Adoption among Internet Households
         Comparison with Consumer Interest in Mobile Data Services
         Preferred Payment Plans
         Preferred Price Points for Subscription Plans
         Preferred Service Providers
         Preferred Hot-Spot Venues
         Intended Purposes for Using Hot-spot services
         Consumer Interest in Various Hot Spot Applications
   5.3 Insights Gleaned from Consumer Analysis

6.0 Defining the Value Chain and Business Models
   6.1 The Hot-Spot Value Chain
      6.1.1 Different Presentations of the Hot-Spot Value Chain
      6.1.2 The Value Constellation Perspective
      6.1.3 Strategic Value of Hot-Spot Venues
   6.2 Non-carrier-based Business Models
      6.2.1 Hot-spot operators (HSO)
         Definition
         Case Study: Cometa Networks
      6.2.2 Non-carrier-based Wireless Internet Service Providers
      6.2.3 Hot-Spot Enablers
         Hot-Spot Aggregator
            Definition
            Case Study: Boingo
         Hot-Spot-in-a-box Vendor
         Operators’ Provider (Case Study: Toshiba)
         Enabling Hardware and Software Vendors
      6.2.4 Hybrid Non-Carrier Business Models (Case Study: Wayport)
   6.3 Carrier-based Hot Spot Business Models
      6.3.1 Mobile Carriers’ Business Models
         Competitive or Complementary?
         Integration of Hot-Spot and Cellular Networks
            Loose Bundling
            Seamless Handoff
         Case Study: T-Mobile
      6.3.2 Fixed-Line Carriers’ Business Models
         Advantages of Fixed-Line Carriers
         Case Study: Verizon
      6.3.3 The State of Cable Companies
   6.4 A Plethora of Pricing Plans
   6.5 Marketing and Branding
   6.6 Conclusion

7.0 International Perspective: Best Practices
   7.1 Case Study: South Korea
   7.2 Case Study: France

8.0 Profitability Analysis and Forecasts
   8.1 Net Present Value/Economic Analysis
   8.2 Growth of Hot Spots: 2003-2007
   8.3 Growth of Hot-Spot Users: 2003-2007
   8.4 Growth of Hot-spot service Revenue: 2003-2007

Figures in Section 3.0
Hot-spot market Snapshot
Current Market Share of U.S. Hot-spot operators
A Pyramid of Potential Venues

Figures in Section 4.0
A 3000-foot Overview of Wireless Technologies
Hot-Spot Roaming Overview of WISPr
Comparison between Wi-Fi and 802.16a
The Rapid Growth of Untethered Networking: Millions of U.S. Households Using Wireless Solutions

Figures in Section 5.0
Growth in Wayport’s Billed Connections
People Who Spend More than 10% of Their Work Time Traveling Nationally Are More Familiar with and Interested in Hot Spots
Relationship between Amount of Interstate Travel and Interest in Hot Spots
The Majority of People Interested in Adopting Hot-spot services Travel Nationally for Work
Relationship between Local Travel and Familiarity with and Interest in Hot-spot services
Households with Telecommuter or Self-Employed People Show More Interest in Hot-spot services
Relationship between Amount of Interstate Travel and Ownership of PDA and Laptop
Familiarity with Public Hot-spot services among Internet Households
Comparison between Narrowband and Broadband Households of Consumer Familiarity with Hot Spots
Comparison between Households with and without a Home Network of Consumer Familiarity with Hot Spots
Comparison between Single PC Households and Multi-PC Households of Consumer Familiarity with Hot Spots
The Most-Frequented Hot-Spot Locations
Who Paid for Hot-spot Services
Relationship between Age and Consumer Interests in Adopting Hot-spot Services
College Students Are More Likely to Use Hot-spot services
Relationship between Type of Internet Connectivity & Consumer Interest in Adopting Hot-spot services
Broadband Households with a Separate Dial-up Account Are More Interested in Hot-spot services
Relationship between Home Network Ownership and Interest in Adopting Hot-spot services
Relationship between Laptop Ownership and Interest in Adopting Hot-Spot services
Relationship between PDA Ownership and Interest in Adopting Hot-spot services
Relationship between MP3 Player Ownership and Interest in Adopting Hot-spot services
People Who Own at Least a Cell Phone, a Laptop, and a PDA Show More Interest in Hot-spot services
Comparison of Interest among PDA, Laptop, and Mobile Phone Owners in Adopting Hot-spot services
Relationship between Familiarity and Interest in Adopting Hot-spot Services
Current Subscribers to Mobile Data Service
Interest in a Mobile Data Service
Preferred Payment Plans for Hot-spot services
Consumer Interest in Adopting Hot-spot services at Different Price Points
Comparison of Consumer Interest across Different Price Points
Preference of Hot-spot service Providers
Most Likely Locations to Use Hot-spot services
Purpose for Using Hot-spot services
Comparison of Mean Consumer Interest in Various Hot-Spot Applications

Figures in Section 6.0
Hot-Spot Industry Segmentation from Boingo Wireless
Alternative Definition of the Hot-Spot Value Chain
The Hot-spot market Value Constellation
Cometa Networks’ Business Model
Hot-Spot-in-a-Box Solutions
Wayport’s Business Model
Mobile Carriers’ Hot Spot Plans
Fixed-line Carriers’ Hot-Spot Plans
Different Pricing Plans

Figures in Section 7.0
Korean Telecom Hot-Spot Service Plans

Figures in Section 8.0
NPV Analysis for a Stand-alone Café Hot Spot
NPV Analysis for an Aggregated Café Hot Spot
NPV Analysis for an Airport Hot Spot
Forecast Model for Growth of Hot Spots
Aggressive Forecast for Number of Hot Spots (2003-2007)
Composition of Public Hot Spots (Aggressive Forecast)
Conservative Forecast of the Growth of Public Hot Spots
Composition of Public Hot Spots (Conservative Forecast)
Factors Impacting the Number of Hot-Spot Users and Subscribers
Forecast for Broadband Adoption among U.S. Households
Composition of Hot-Spot Users (Aggressive Forecast)
Aggressive Forecast of Hot-Spot Users and Subscribers (2003-2007)
Composition of Hot-Spot Users (Conservative Forecast)
Conservative Forecast of Hot-Spot Users and Subscribers
Price Assumptions for Forecasting Hot-spot service Revenue
Forecast of Total Revenue of Hot-spot services (2003-2007)

© August 2003 Parks Associates
Dallas, Texas 75230

All rights reserved. No part of this book may be reproduced, 
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