*** Wireless News, 27th of May 2005 ***

[kalok]

Wifi Business Plans By the Big Three

Mark Evans
Financial Post


Friday, May 27, 2005


Canada's wireless carriers -- Rogers Wireless, Telus Mobility and Bell Mobility -- are trying to jump-start the Wi-Fi market by creating a common brand and making it easier for consumers to use the service.

By working together, they hope to address two issues that have hindered Wi-Fi's popularity: the difficulty in finding "hot spot" locations -- be they coffee shops, airports, train stations, hotels or restaurants -- and the frustration trying to connect to the Internet only to discover that hot spot is not operated by your wireless carrier.

The plan announced earlier this week is well-intentioned but it is doomed for, at best, modest success because the Wi-Fi business model appears to be evaporating. Fundamentally, there just aren't enough people willing to pay a premium price for the convenience of surfing the Web or checking e-mail at a Second Cup, McDonald's or Mail Boxes Etc.

For whatever reason, there continues to be this ill-conceived belief that thousands of people are flocking to coffee shops, and happy to pay $9.95 an hour or $20 a day for Wi-Fi access. Sadly, it ain't true.

This week's agreement between the three national carriers is a sign this business model dream is still alive and well. It appears they believe Wi-Fi will suddenly take off simply because it will be easy to get connected and pay your access fees. What they will likely discover is the same consumer push-back that currently exists.

This should not suggest a business model for Wi-Fi doesn't exist. However, it will be dramatically different than the one that currently exists. The premium market only works when you have a captive audience who, ideally, are on corporate expense accounts. This means hot spots in airports, hotels and convention centres could be lucrative.

In theory, an executive trying to kill time in an airport lounge may pay $9.95 for Wi-Fi access to check e-mail. Then again, many road warriors have BlackBerrys, which gives them instant e-mail access. Meanwhile, many conferences are offering free Wi-Fi as an incentive at a time when companies are being more careful about sending employees to these kind of events. In the hotel industry, free Internet access is becoming more common.

So what about the coffee shop market? What about all those hipsters with their laptops and $4 cappuccinos who spend hours casually surfing the Web? They may be some people who do it but not enough to make much of a difference on the bottom line. Many coffee shops are using free Wi-Fi service as a competitive tool. It's a low-cost marketing opportunity given all you need to set up a hot spot is a $45-a-month high-speed Internet access account, an old computer and an inexpensive wireless router.

The bottom line may be that Wi-Fi is not so much a business as it is an option provided by wireless carriers to monthly customers.

Rather than charging $9.95 an hour or $20 a day, the real business opportunity may be a $2 to $10 monthly fee. Some people may subscribe and use it a lot, while others may use it infrequently but want the comfort of knowing they have mobile access when and/or if they need it.

This week's inter-carrier agreement could signal Canada's three major wireless carriers realize more has to be done to spark Wi-Fi usage. The question is whether they are willing to do more than offer new branding and availability at more locations.

source : © National Post 2005

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kalok~

 

[Azalie]

I know several people who use wi-fi, but all of them are truck drivers who use a special service provided only to truck drivers. There *are* people who would use it, especially people who are constantly on the move, but overall they are a minority. The article is correct that a lower fee would make wifi more attractive. I know I would use wifi with my laptop if the costs weren't so expensive.

 

[kalok]

RE: *** Wireless News, 27

Honestly, I've never thought that the 3 big providers will team up for their customers. Because, if WiFi rolls out good, it should be a good way to attract customers.

Now the thing I would like to know is, is Fido customer consider as Rogers' customers? If not, does that mean, Fido customer will not have WiFi?

kalok~

 

[nitzomoe]

RE: *** Wireless News, 27

it really is doomed before it begins. $9.95 for one hour and $20 a day? that translates to over 2 thousand bucks just for one hour into 200 days of the week, theres absolutley no way ppl would shell out that kidn fo money for internet access, when mny places offer it free of charge. Perhaps offering the internet but including ads during the usage might be a better idea. this thinkers behidn this illconcieved idea should retool their wireless service to be more affordable.