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Unprofitable Wi-Fi Still Needed

Posted: 01st Jul, 2003 By: MarkJ
Research group Gartner has reported that public broadband wireless LAN (Wi-Fi) hotspots, by and large, are not profitable, yet can boost other sectors and are thus still very much needed:

According to Gartner vice president Ken Dulaney, the building of Wi-Fi hotspots cannot be justified through the profits they will generate. However, he says that as an additional customer service, investment in the technology by cafes, pubs, petrol stations, airport lounges and other retail locations could lead to higher profits in other business segments. The thinking, it would seem, is that a hotspot in a cafe won't be profitable in its own right, but it may encourage users to stay longer and buy more coffee.

Still, Gartner said that despite the massive growth of public WLANS (wireless local area networks), from 1,200 globally in 2001 to 71,000 in 2003, there still aren't enough to generate momentum in the market. "With just 2.5 million hotspot users in 2002, the vast majority of these (91 percent) were infrequent users attracted by opportunities to use a service just once or twice, often free of charge," said Ian Keene, vice president in Gartner's telecommunications group. "Many more hotspot locations are needed if user numbers are to rise greatly."

The company reckons that by the end of this year there will be 9.3 million hotspot users worldwide. North America will account for 4.7 million users in 2003, followed by Asia/Pacific with 2.7 million users and Europe with 1.7 million WLAN hotspot users.

More @ ElectricNews .
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