Wi-Fi hotspots are hot again

Everything old is new again, like leg warmers and tie-dye scarves, and . . . Wi-Fi hotspots. Research firm In-Stat says hotspot usage will “increase in 2009 by 47 percent, bringing total worldwide connects to 1.2 billion.”

“A market that appeared to be languishing due to revenue shortcomings has found a renewed life force,” says Frank Dickson, In-Stat analyst. “Mobile operators have become increasingly involved in the hotspot market globally as they assess the potential of hotspots to offload wireless data traffic from overburdened 3G networks. Also, mass market adoption of Wi-Fi-enabled smartphones has significantly altered hotspot usage, with these devices accounting for the majority of access sessions in some locations.”

In-Stat estimates that:

  • Total worldwide hotspot venues will reach 245,000 locations in 2009.
  • AT&T is on course to experience 500 percent usage growth for 2008 versus 2009.
  • Asia-Pacific will experience the greatest growth in venue deployments over the next few years, largely driven by large-scale deployments in China.
  • Survey results suggest that security concerns by individuals, not corporate users, are limiting hotspot usage.

In the last two weeks, companies have been rushing to sponsor free Wi-Fi in airports and on flights. Yahoo is sponsoring free Wi-Fi in Times Square (New York City). In places like Bali, free Wi-Fi is just about everywhere.

I love how industry analysts keep repeating “carriers love Wi-Fi because they can off load data traffic from congested 3G networks” without carrying this thought to its logical conclusion: if the carriers (and service providers) keep installing Wi-Fi hotzones, why would most people bother with a long-term (post-paid) mobile phone plan?

I’ve been on a prepaid T-Mobile plan for years and I’m finding it even less necessary now to get a post-paid plan with any carrier. I have an iPod Touch which I take on long trips, such as when I went on holiday to Bali in September, and I can make calls via Skype. How close are we to a world where Wi-Fi will be the default way of connecting and 3G will be the network you use to “fill-in” the gaps, the one you connect to when there is no Wi-Fi? For me this is already happening. This “fill-in” network is rather expensive, isn’t it?

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(1) Guide to the WiMAX Band (2.5 GHz): the technology, license holders and future prospects

(2) The U.S. Mobile Web Market: Taking Advantage of the iPhone Phenomenon

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Comments

  1. Dear Esme,

    The carriers are getting whipsawed by the explosion of mobile data traffic. AT+T’s cell network is being burdened by all those iPhones they are selling. That was a key motivator for buying Wayport.

    Skype on an iTouch — WiFi enabled calls — strikes at voice, the carrier’s core business, but Wi-Fi telephony can never replace cell service. Wi-Fi telephony is not mobile voice, but nomadic voice — a Hot Spot to Hot Spot proposition. You can’t be in a car or even walking any distance making calls this way.

    In the end, Wi-Fi enabled calls will eat into the carriers profits far less than having to constantly shore up their cell networks to handle data traffic from this flood of smartphones. Mobile data traffic is expected to grow 129% CAGR through 2015. In the face of this, mobile voice, which Wi-Fi can’t support, needs to remain serviceable.

  2. I can tell you that traffic on our wifi network is growing by leaps and bounds. What was a network record (users and bandwidth) last month, is this months averages.

    Smartphones last month were 45% of all our traffic.

  3. Brian,

    Are you based in Little Rock, Arkansas? I assume most of your Wi-Fi hotspots are in the city?

  4. We are actually in North Little Rock mostly but we are currently expanding into more of the Little Rock side of downtown due to a contract with the Trolley service to mount to their poles. This will increase our footprint by about 60% and will more than double our user counts as that side of the river is very much more busy.

  5. It’s great with a new wave after some ten years! And one interesting piece is iPhone 3.0 auto login which I believe explains some of AT&Ts exceptional growth in Q3 re number of connects. And with auto login, users don’t have to look for a hotspot any longer; if there is one they will use it without knowing. And all of a sudden hotspots “without seating” will be more valuable and I bet my right arm that outdoor locations in down town areas will get a lot of connections onwards. We have started to see this happen in our network already.