The growth of the public wireless local area networking (P-WLAN) market is set to continue in both the USA and Western Europe, driven by business travellers' appetite for cheap and fast remote access to the Internet, according to a new report published this week by Analysys.
The report, Public WLAN Access in Western Europe and the USA: market analysis and forecasts, anticipates that revenue will grow from USD10.9million (â‚-9.99m) in Western Europe to USD2.64billion (â‚-2.42bn) in Western Europe by 2007.
Hotspots, which are currently being installed in airports, hotels, conference facilities, cafÃ©s, restaurants and rail stations, are estimated to grow from Western Europe's curent 1400 to 30,000, over the same time period.
"Whilst take-up of public WLAN services has been slower than we anticipated, it still represents a significant opportunity for operators and other service providers," said Maja Kecman, main author of the report. "In both Europe and the USA, telecomms operators have shown interest in the WLAN market as a complement to their existing networks, but have been cautious about investing in an uncertain market where there are still technological and regulatory issues to be resolved," Kecman explained.
Market uncertainty is compounded by the fact that no single business model has yet emerged, said the authors. The report outlines five main business models, the most common of which involves the hotspot site owner and operator (or wireless Internet service provider) acting as the main players in the P-WLAN value chain.
"We expect the dominant business models to evolve significantly in the next three or four years," said the report's co-author, Monica Paolini. "By 2007, the US market will be characterised by a non-integrated value chain, with retail service providers not having exclusive control of the network infrastructure. In Europe, we expect fixed and mobile operators to prevail as they are able to leverage their existing customer base and backhaul agreements more effectively."