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| Public Wireless is Still Finding its Footing |
September 13, 2003 |
By Poonam Khanna
The Internet—everywhere. It’s not a realityyet, but wireless ’net access points are becoming a hot commodity in Canada.
This summer VIA Rail became the first rail company in North America to deliver wireless ’net access on its trains.
The pilot project, which currently only covers first-class passengers travelling between Montreal and Toronto, is run by Bell Canada.
McDonald’s Canada also joined the parade, announcing that by Christmas it intends to have wireless access in 10 restaurants in partnership with KnowledgeWorx. Buy $3 worth of McDonald’s products, get 45 minutes of wireless connectivity. And Timothy’s World Coffee, along with Spotnik and TELUS Mobility, is rolling out free wireless with your morning cup of joe.
And there are many others.
The catch for vendors is none of these offerings are making money, and no one has quite nailed down a hotspot economic model.
But there’s a lot of activity and enthusiasm on the wireless LAN front; IDC Canada expects about 450 hotspots to be operational across Canada by the end of the year.
In a report released in June, IDC wrote, “Much uncertainty remains in the hotspot market. Issues, such as service roaming and pricing, lack of a proven business model and unclear roles of suppliers in the hotspot ecosystem, will need to be addressed before the market becomes viable and profitable.”
IDC is far from alone in expressing concerns about the current state of the hotspot market. Lars Godell, an analyst at Forrester Research in Amsterdam, also has his doubts.
He said the optimism and zeal with which some vendors approach public wireless hotpots reminds him of the hype and over-enthusiasm expressed in the dot-com heydays. “I don’t think all hotspot operators will go bust, the problem is just that the average operator will face major business case problems,” he said.
“I suspect incumbent telcos and some specialized/focused players have the best chances.”
Some vendors may not look to wireless ’net access to make money but rather as a way to strengthen their core business in the hospitality sector. Train lines will have to provide such service in order to keep up with the airlines, for example.
Though vendors are initially targeting business professionals, only about four per cent of Canadian enterprises were making use of public hotspot services during the first quarter of 2003, according to IDC’s findings. An additional six per cent plan to use them in the next 12 months.
That, said Warren Chaisatien, a senior telecom analyst at IDC Canada in Toronto, is a small subset of the Canadian business market.
IDC thinks they are waiting for issues such as network coverage, pricing and security to be worked out before they jump in.
Still, free offerings such as those on VIA trains and at McDonald’s serve a purpose, Chaisatien said. “Their main objective would be to gather information on the market.”
The offering will also help create awareness and education. “And I think that’s what is really important at this point in time.” Through the VIA project, Bell will be able to gather user pattern information, such as when users go online, how long an average session lasts and what kinds of applications they use.
Today, most mobile professionals use Wi-Fi for e-mail and Internet browsing. This is similar to how the wired Internet was first used, Chaisatien said.
“Now it’s beyond that. Wireless evolution will reflect that.”
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