Europe will have 37 million Wi-Fi hotspot users in five years' time, but few of them will be frequent users with subscription accounts. That is the conclusion of an independent report from ON World, a Californian wireless research company.
The firm concludes that providers will miss out on a massive market if they don't lower prices. Just 15 per cent of customers would use hotspots at least once a week.
ON World said that European hotspot service prices were more than double the average price in the US and four times the average in the Asia Pacific region where Wi-Fi thrives.
As hotspots spread to central and eastern European countries - where mobile phone and broadband penetration are high - pricing models are still being aimed at international business travellers logging on in airports and hotels.The 15 per cent who would be frequent users would be business customers. Recreational use would be hardest hit by pricing.
But IDC was not so gloomy about the take-up of hotspot services. Evelyn Wigger, its Wi-Fi analyst in the Netherlands, told TechWorld that five years is a long time in such an emerging technology market and she expected that by 2009 most mobile phone companies would be offering Wi-Fi as an almost invisible integrated service all over Europe. That could make it hard to determine how many people were frequent hotspot users but she still anticipated that most customers would use Wi-Fi more than a few times a month.
"2009 is too far away to say anything sensible, many things can happen between now and then," she said. "Probably next year, or the year after prices will come down. Wi-Fi will be integrated into another mobile offering - for example as a GPRS add-on. The customer doesn"t need to know which technology they are using.
"Mobile companies are already working on it. Most in Europe have some sort of Wi-Fi offering." ON World agreed that Wi-Fi would "ultimately be offered as part of a network operator's extended network and would enable mobile operators to finally profit from their 3G investments, especially by offering dual mode (cellullar/Wi-Fi) mobile phones."
But in the meantime, providers are losing out on a major opportunity. ON World said that Korea Telecom - at a cheap rate - made $65 million in Wi-Fi hotspot revenue last year.
In terms of numbers, ON World said that Europe would have 174,000 hotspots by 2009, up from 8,500 at the end of last year. The world total would be 720,000, up from 41,000.