WiFi hot-spot bubble set to burst

By Matt Whipp

Posted on 19 Jun 2003 at 16:30

Forrester Research is predicting that a proliferation of Bluetooth devices and an abundance of WLAN access points at home and in the office will burst the spot-com bubble come 2008.

'With all the hype today about the rollout of WLAN public hotspots, it's as if the dot-com boom and bust never happened,' said Forrester Senior AnalystLars Godell. 'We believe that much of the money being poured into public WLAN today to enable access - from places as diverse as bars, marinas, hotels, and airports, as well as train, bus, and metro stations - is being wasted.'

The report suggests fledgling hot-spot market emerging today has much to do to convince the public of its convenience and cost-effectiveness, and businesses of its security and seamless operation between different countries.

It also relies on people wandering around with laptops, a device that only about 10 per cent of us in Europe own today, expected to increase to just 16 per cent in 2008. And of those, it predicts just 20 per cent will own a laptop that is WLAN-enabled to make use of hot-spots, but that nearly a third won't bother to do so.

By that time, Forrester expects that 80 per cent of WLAN kit shipped will be going to fixed homes and offices, rather than the field workers of corporate enterprise.

Bluetooth, however overhyped the technology has been to date, will have become cheap enough to integrate in 2008 to have permeated into 239 million phones (compared with 26 million today) whereas WLAN will end up in a niggardly 2 per cent of them.

Why? Goddell believes mobile operators will be flexing their muscles. 'WLAN will only creep into... phones as part of a dual-mode chip solution in high-end hybrid devices like the Nokia Communicator and Sony Ericsson P800. Powerful mobile operators will convince handset makers not to contribute toward the killing of one of their overpriced cash cows - mobile voice - through enabling free or very cheap Wi-Fi calls.'

It's an interesting take on the future of hot-spots, as at the launch of Toshiba's hot spot in a box, Cordless Group industry analyst George Bartley thought that these same network operators were best placed to move hot-spots forward: already having in place a per-minute billing system and roaming agreements they would be the Wireless ISP (WISP) of choice.

If the telcos cool on hot-spots, then the cost-savings of IP telephony through a decent network of hotspots must appeal to businesses, presenting a market that will undoubtedly be taken advantage of - if not by the mobile operators, then someone else. Unless, of course the hot-spot roll-out can be stalled beforehand.