Tuesday, August 09, 2011

Australia - The decline of the Wi-Fi hotspot driven by the cheapness of mobile broadband - but rise again as operators try to off-load traffic

[it wire] Remember when carrier operated public WiFi hotspots were all the rage? Telstra, Optus and a handful of private operators were rolling them out in coffee shops, airports and on the street. Sure every other coffee shop today has free WiFi, but the big telco-operated networks have all but disappeared. They could be about to make a comeback.

Telstra at one point had over 1000 public WiFi hotspots. In mid 2005 it had 130 in the CBDs of Sydney and Melbourne alone. The Australian reported at the time that Telstra had "switched on blanket WiFi coverage across the Sydney and Melbourne CBDs."

And where are they today? According to Telstra's web site it has just 49. They are located mostly in airports and a few hotels and conference centres.

Optus' network has similarly shrunk. It announced in 2003 that it would install over 500 WiFi hotspots in CBD cafes, airports and hotels over the ensuing 18 months. I'm not sure what the number peaked at but today, according to the Optus web site there are less than 60 in a disparate collection of - mostly - coffee shops hotels and bars. And, the web site says, the service is not available to new customers.

It's not hard to see why telco-operated public WiFi is moribund: the meteoric rise of - and similarly meteoric fall in the price of - wireless broadband. Public WiFi is not even a cheap option: Both Telstra and Optus charge around $12 per hour, which is not particularly attractive in comparison to cellular broadband except for the very infrequent user. Once you've bought your dongle - pretty cheap these days - even the premium priced Telstra will give you 1GB on its mobile network anywhere in Australia for $40 on 30 day prepay. And the MVNOs are a good deal cheaper.

But perhaps it is too early to write RIP over carrier operated WiFi networks. A number of industry commentators claim that, notwithstanding the efficiency gains promised by LTE and beyond it by LTE advanced, such is the growing demand for wireless data that offload to WiFi and/or femtocells will be essential.

Just last week, analyst firm Juniper Research issued a report forecasting that even with the increased deployment and utilisation of LTE networks, global mobile network data delivery costs could surpass $US370b annually by 2016, a sevenfold increase on their 2010 level of $US53b.

Where has all the WiFi gone?

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