While Europe remains the leading region in terms of hotspot footprint, with 42 percent of worldwide locations, North America leads in worldwide usage, with 53 percent of connects in 2007.
"The hotspot market is on the verge of a revolution-a revolution being driven by new users, new access devices, and new applications," according to Amy Cravens, an Analyst with MultiMedia Intelligence. "In the near future, hotspots will not be just for business travelers any more. The increasing availability of dual-mode handsets in 2008 coupled with the anticipated introduction of lower priced access fees, will result in the hotspot user base broadening to include consumers."
The beginning of a trend toward consumer usage is already evident; with consumers accounting for nearly 25 percent of connects in 2007, up from approximately 15 percent in 2006. This trend is anticipated to accelerate going forward.
While revenue per connect is expected to fall significantly for cafÃ©s and similar venues, we believe revenues will be sustained by access fees in full service hotels and airports, which together will comprise over 90 percent of access revenues. To help offset the lower ARPU of consumers, Hotspot operators are also beginning to explore new revenue opportunities including back office services, application/content offerings, and advertising to bolster revenues generated from access fees and roaming partnerships.
Recent research by MultiMedia Intelligence has identified the following:
- In 2007 handhelds only accounted for 10 percent of connects. However, the percentage of handheld connects will increase in accordance with increasing installed base of handheld Wi-Fi enabled devices and the resulting increasing consumer usage. Handheld connects are expected to double as a % of total connects annually for the next few years.
- Despite pricing pressure created by consumer-oriented offerings and the competitive threat posed by 3G and WiMAX, MMI foresees robust growth in hotspot revenues.
- Roaming providers drive significant traffic to hotspot venues, as well as linking individual hotspot operators and branded resellers to promote mass market usage in their locations. Leading roaming providers include companies such as Boingo, iPass, Trustive and WeRoam. Among the leading hotspot operators are KT Nespot, The Cloud, AT&T, Sprint, and WayPort.
- Market saturation has already largely occurred in Tier 1 venues, and by the middle of the forecast period it is anticipated that Tier 2 venues will be approaching saturation, at least among those venues that are perceived to be potentially profitable. CafÃ©s are projected to have the highest unit growth over the forecast period whereas public venues and RV locations are projected to have the highest % increase.
- While a smaller hotspot market presently compared to Europe and North America, Asia Pacific will experience the greatest growth rates over the forecast period. Asia Pacific has a slightly higher dominance of cafÃ© deployment compared to other regions,
- The majority of hotspot usage continues to be pay-as-you-go. While growth in subscriptions or prepaid cards has been slow to date, MMI does believe that subscription revenue will increase nearly tenfold over the forecast period.
The research, "Hotspots: The Next Generation Consumers . . . Handsets . . . VoFi" provides market insight resulting from nearly a decade of market coverage and expertise. Global five-year forecasts include venue forecasts by region and venue type. It also includes usage and revenue forecasts segmented by region, venue type, access device, user type (consumer versus business), and payment method (subscription versus pay-as-you-go).
For more information, please see http://www.multimediaintelligence.com.
For more information, contact:
Amy Cravens, Analyst
Phone: (602) 770-8346; Email:
Title: Hotspots: The Next Generationâ€” Consumers...Handsets...VoFi
Published Date: November 2007
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Author: Amy Cravens
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