After three years of Wi-Fi, hurdles remain

IDG News Service |  Mobile & Wireless

Some of the ideas under consideration for Wi-Fi billing include per-day, per-hour, and unlimited monthly connection fees. Right now, users are willing to pay a bit of a premium for hot spot access, but as pricing becomes more competitive hot spot owners will need a larger share of the revenues they generate for the equipment companies and hot spot providers, said John Yunker, an analyst with Pyramid Research LLC in Cambridge, Massachusetts, in a recent newsletter.

Right now, the owner of a venue with a hot spot receives about 20 percent of the revenue generated by Wi-Fi in their area, based on revenue sharing models, according to Yunker. The rest goes to the equipment manufacturer and the hot spot provider, which is responsible for support and installation. "Current revenue share models value the network far greater than the location," he wrote.

Larger venues such as airports or convention centers can make a great deal of money with only 20 percent of the revenue, but places like coffee shops are the key to drive Wi-Fi growth, and hot spot providers and aggregators will need to cut them a bigger piece of the pie to encourage more venues to install hot spots, Yunker said.

Eventually, the aggregators and providers will have to figure out ways to share networks as the number of hot spots grows beyond the ability of one company to manage, Ro said. But the capital required to set up a Wi-Fi hot spot is far less than required for cellular operators, at about US$100 for a wireless base station versus about $1 million for a cell phone tower, he said.

For now, the Wi-Fi Alliance plans to work with aggregators and hot spot providers to label hot spots with a Wi-Fi Zone moniker. Any service provider that uses equipment certified by the Wi-Fi Alliance will earn the right to display the Wi-Fi Zone logo. Users will be able to visit to locate hot spots in their hometowns or traveling destinations, and can download an Excel spreadsheet to look up hot spots when not online.

The idea is to have a universally recognized logo that anyone can see and know that wireless Internet service is available at a location, similar to the way a telephone logo identifies a phone booth or a stick figure differentiates between male and female restrooms, Ro said.

The prospect of a fast Internet connection anywhere, at any time, is still some distance from becoming reality for the vast majority of PC and handheld users. But the Wi-Fi Alliance and numerous vendors are working towards making the technology ubiquitous, and wireless technology will drive hardware sales if it becomes something users can't live without.

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