Hotspot Market’s Maintaining Its Heat

The high-tech market research firm finds that the hotspot market has evolved past the initial build-out period which has characterized the last four years of the hotspot market, and that the marketwill move into a more mature stage, where growth in venue footprint will continue at a more even pace than it has in the past. Overall, worldwide hotspots are expected to grow from 43,850 locationsin 2003 to more than 200,000 locations in 2008, largely driven by hotel and branded deployments.

In addition, as part of this market maturity, the hotspot market is experiencing extraordinary service revenue growth. “While revenue in previous years had been relatively small, the market is finally beginning to mature, resulting in significant revenue growth,” said Amy Cravens, a senior analyst with In-Stat/MDR. “Nearly half of business professionals have at least tried hotspots, and a growing percentage of them are regular users. While providers will have a continued challenge of converting occasional users into regular subscribers, they are finally seeing the revenues that legitimize the market.”

In-Stat/MDR has also found that:

— Subscribers continue to be, primarily, business users that are accessing these networks via laptop computers. However, In-Stat/MDR expects that the usage of wireless LAN-enabled handhelds/PDAs to increase over the next 18 months.

— Voice will be the next big thing to emerge in the hotspot market, with some trials and limited offerings already under way. Fatport, for example, has launched Voice over IP (VoIP) in their hotspots.

— The largest sector of the hotspot market, in terms of absolute number of venues, will continue to be the cafe market.

— Regionally, there will be some variance in how the hotspot footprint continues to develop. To date, Asia Pacific has led the world in number of hotspots deployed, primarily because of an unprecedented deployment in South Korea, which accounts for more than half of the region’s total venues in 2004. While over the last several years Asia Pacific has dominated the worldwide market in venue deployment, there are no signs on the horizon of other deployments in the region that will match the scale of the South Korean deployment, and thus, Asia Pacific’s growth will slow dramatically from 2003 to 2004.

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