The Potential Market

---

Right now, the entrepreneurial companies drive the WISP market in the U.S., whereas in Europe and elsewhere, it's the established telecommunication operators. But no matter who's in the driver's seat, HotSpots will generate approximately $12 billion in revenues in 2007, according to an early 2003 Visant Strategies study entitled "3G and 3G Alternatives: 3G vs. Wi-Fi vs. 4G." This predicted growth becomes even more realistic when HotSpot operators team with cellular NextGen operators to provide high-speed wide area coverage coupled with even higher speeds at the HotSpot, as discussed in Chapter 13. (These and other partnering strategies will become more and more commonplace as both industries realize that they need each other for growth.)

It's the business professional that will be the prime marketing target, especially the traveling professional. Travel industry statistics indicate that business professionals on average take five business trips per year with the average business trip lasting three nights. For example, the World Bank (based in Washington, D.C.) sends its employees on more than 18,000 overseas trips every year. All of these professionals must keep apprised of what's happening on the home front—their email, managing their daily business tasks, overseeing revisions, updates to corporate documents, etc. The fact that Wi-Fi enables them easily to access their corporate files can be a godsend, especially during the ever-expanding wait time at airports, the three-hours-to-kill at a convention center waiting for the next lecture to begin, and when wide awake in a hotel room due to jet lag.

The website, Outlook4Mobility.com, recently conducted a "Wi-Fi Survey of Industry Professionals," which indicated a great deal of interest in the HotSpot model. For instance, 92 percent of those surveyed indicated an interest in making use of HotSpots, both among respondents who have previously made use of a HotSpot and those who have not. However, the survey also found that 70 percent of respondents feel there are not enough HotSpots yet deployed to make the service worthwhile, and 74 percent are not willing to contract with multiple providers in order to make use of the service. The survey also points out that the demand for wireless access is price-sensitive—most business travelers indicate that they want high-speed service and are willing to pay something for it. But most respondents questioned some of the pricing models being used (e.g. most were unwilling to pay a monthly fee when they only use the service a few times a month).

That "something" may be far lower than HotSpot providers expect. A mid-2003 survey conducted by ForceNine Consulting finds that while demand among consumers for Wi-Fi is quite strong, the sweet spot for pricing is no more than $1 per hour—much less than the $6 per hour being charged at Starbucks.

Despite the muddle pricing models, Gartner projects the worldwide number of HotSpot users to grow to 9.3 million users by the end of 2003, up from 2.5 million users in 2002. Of that 2003 total, North America will account for 4.7 million users, followed by Asia/Pacific with 2.7 million, and Europe with 1.7 million.

Global Branding

In early 2003, noting Wi-Fi's rapid advancement in the wireless service provider sector, the Wi-Fi Alliance (formerly the Wireless Ethernet Compatibility Alliance), expanded its mission to include other Wi-Fi-related programs. One such program is called the "Wi-Fi ZONE program." The Wi-Fi ZONE was initiated to create a global brand for easier recognition of public access HotSpots. The program sets a minimum standard of quality for HotSpots before they can label themselves a Wi-Fi ZONE or display the ZONE logo (as depicted in Fig. 1.2).

The Wi-Fi ZONE brand can be used in conjunction with whatever brands are also applicable to the venue provider, e.g. Starbucks Coffee shops can show the Wi-Fi ZONE brand along with the T-Mobile logo to indicate they offer quality wireless Internet access to the public.

That is just the first phase of the Wi-Fi Alliance's ZONE program. The second phase is slated to include use of what it calls "the Wi-Fi ZONE Finder tool," a searchable database of qualified HotSpots (similar to what's available at www.80211hotspots.com). For more information on the Wi-Fi ZONE program visit www.wi-fizone.org.

Other non-profit organizations also address the branding issue. Pass-One (founding members include Wayport Technology, US Open Point Networks, France's Wifi-com, Canada's FatPort, and Sweden's Tele2) addresses the industry's lack of a roaming standard and how to coordinate activities within the WISP marketplace. Pass-One's main task is to specify the rules for authentication (SIM and browser-based), authorization and profit transfer, access management (including service barring), accounting and billing, tariff planning, settlement, and overall service delivery. But, like Wi-Fi Alliance, Pass-One is also creating a service mark or logo that could indicate that a particular venue allows Wi-Fi access to all Wi-Fi subscribers. When an end-user sees the logo, he or she will know that (1) quality Internet access is assured, and (2) that no matter which HotSpot operator the end-user pays subscription fees to, he or she can use any HotSpot of choice with no fuss or muss. The logo is intended to signify the same type of service that credit cards offer, i.e. you see a VISA logo you know that whether your VISA card is a Bank One card, a CitiBank card, or a Capital One card, the card will be honored.

Recognizable signage identifying HotSpot locales should help improve the public's awareness of the availability of HotSpots. "Even at locations where service is available, people are not really aware of it," Phil Belanger, a Pass-One spokesperson says. "A service mark will give that awareness."

In the Asia-Pacific region, a group of telcos signed a memorandum of understanding to establish a regional roaming framework for Wi-Fi HotSpots. The founding members of the Wireless Broadband Alliance include China Netcom, Korea Telecom, Malaysia's Maxis, Singapore's StarHub, and Australia's Telstra. These telcos currently control 8600 HotSpots, but that number is projected to rise to 20,000 by the end of 2003.

The key objectives of the Wireless Broadband Alliance are to drive the take-up of public access WLAN services among business travelers, establish a HotSpot service mark to indicate pre-determined technical standards for quality of service and conformity in user authentication and access.

Marketing Pointers

Before deciding that a particular venue is suitable as a HotSpot location, check out the venue's customer traffic. How busy is the location? The most successful HotSpots will have a fair amount of trade prior to offering wireless Internet access. Also look at the customer demographics. Are they college students, employees from local office buildings, residents of a local retirement community, nannys with their charges in tow, medical staff, overflow from a nearby hotel or convention center? A HotSpot's ideal customer base tends not only to be professional and technically savvy, but people who use a HotSpot as an "office away from the office," e.g. business travelers, freelancers, sales people, independent consultants, journalists, writers, graphic designers and telecommuters.

Ideally, prior to launching the HotSpot, put your marketing techniques in place to drive traffic to the venue and to entice the customer to use your wireless service. For example:

• Literature extolling the virtues of Wi-Fi and instructions on how to use the HotSpot's features should be prominently displayed at the HotSpot's entryways and made available for customers to take with them when they leave.

• Signage displaying the SSID, company logo, and other pertinent information should be visible.

• HotSpot operators should encourage (via incentive programs) venue owners to promote and sell its Wi-Fi services.

• Offer regular Wi-Fi customers free use, on the stipulation that they actively promote the HotSpot, and, when available, aid new customers in setting up an account on their computing device.

• Develop a referral program whereby customers can receive free service when they refer a new customer.

• Offer sign-up bonuses, such as a free wireless networking card if a customer signs up for a 12-month contract.

• Notify the local technical community via direct mailing (email or regular) of HotSpot locations in their area.

• List your locations in online HotSpot directories, e.g. Broadband Wireless Exchange Magazine (www.bbwexchange.com), Ezgoal.com, Hotspot-Locations.com, 80211hotspots.com, WiFinder.com, and Swiss Hotspots.ch. Also register with Riverwalk Software. This company maintains a directory of HotSpots/FreeSpots which is available for download to computing devices in any of the following formats: in Microsoft Excel, Palm Address Book, Handmark's MobileDB, and comma delimited ASCII formats. HotSpot providers can add their sites to the database by emailing <[e-mail]>. Freeware providers can add the directory to their site by contacting <[e-mail]>.

• Issue press releases every time a new HotSpot goes online. Or when your company reaches a milestone, e.g. 100^th HotSpot goes online, or one millionth end-user to sign up for your service, partnership agreements and so forth.

• Send out monthly or quarterly newsletters via email to everyone that's signed up to receive such mailings.

• List your website with all major search engines and develop linkage relationship with other websites.

• Advertise HotSpot locations in local newspapers and magazines.

• Develop promotional programs with venue owners, e.g. buy two donuts with a large coffee and get one hour of free access, or buy one hour of Internet access and get a free coffee.

---