Counting the Hotspots that Count

Counting hotspots should be easy, right?

Wrong.

As network aggregators and network operators strive to position themselves
within the Wi-Fi market, the pressure is on to show big numbers. Whoever has
the most hotspots will be best positioned to capture market share, or so the
logic goes. Trouble is, reliable numbers are hard to come by.

"There are about 2,000 [public-access] hotspots out there — and that’s
everybody," said Iain Gillott, an independent consultant with iGillott
Research
in Austin, Texas. "Yet I have heard everything up to about
5,000 hotspots. It is just all over the place."

It’s not that the aggregators are making up their numbers. Analysts say the
big problem here is duplication. Take for instance Wayport,
which has hotspots in many hotels. Now, a user who subscribes to the aggregator
Boingo can also access Wayport hotspots, because
of agreements between Wayport and Boingo, explained Chris Kozup, an analyst
at Boston-based Meta Group.

If both Boingo and Wayport count that hotspot in their tally, the numbers will
quickly get skewed. Apparently, that is just what has been going on. "There
are so many different relationships and crossovers in terms of roaming agreements,"
said Amy Cravens, industry analyst at In-Stat/MDR
in Scottsdale, AZ.

To help clear the air, Cravens recently put out a comprehensive report tallying
up hotspots among the major WISPs and aggregators. By her count, the November
numbers for the top three came up as follows:

  • Boingo: 700 operating Wi-Fi locations
  • GRIC: 650, with 1,000 expected by year’s end
  • iPass: 375 Wi-Fi locations

Plus, as T-Mobile pointed out when we first wrote about
this report
, that doesn’t even count the ubiquitous Starbucks Coffee shops
with Wi-Fi, which they say was up to 2000 at the end of last year.

This business of counting hotspots is a hot issue. In a typical press release,
for example, GRIC went out of its way on December 3 to state that its "total
broadband access locations — both wireless and wired — topped the 1,000 mark
for the first time." This was not a side note: Rather, the hotspot count
was the subject of the release.

So why all the fuss about numbers? After all, 2,000 (or is it 3,000?) hotspots
across all of North America doesn’t amount to much. Yet the operators have taken
pains to assert their numbers, each claiming their hotspot count as a competitive
advantage.

Some analysts says it is because the operators have little else to count right
now.

"Here is what it boils down to: There are not enough hotspots out there.
There is not enough coverage out there. It is like cellular in the early days,
when people used to tell you they had so many towers. They were flexing muscle
to show how big they were," said Gillott.

"Now that they have much better coverage, they don’t talk about towers
any more. In fact they keep it secret," since the tower count could be
perceived as competitive information, he explained. "Now they talk about
customer service and how many customers they are adding and how many minutes
you can have for $30 or whatever."

As Gillott sees it, the quibbling over hotspot numbers is simply an indication
of how far the industry has not come. Plenty of others back his view.

"To get subscribers, you want to paint the picture that you have a broad
coverage, and that is what these numbers are all about," said Kozup. He
added that the hotspot count at this point merely serves as a diversion from
what will ultimately become the real competitive issue among the operators.
"Numbers are one thing, but in my mind what is important is the business
quality of the location."

What kind of traffic does a location encounter? It is generally understood
that a hotspot in a coffee shop has more value than a hotspot in, say, a grocery
store. In this sense, the mere counting of hotspots has very little value —
or, as some would see it, no value at all.

"It does not matter how many hot spots you have," said Eddie Hold,
a wireless analyst with research firm Current
Analysis
in Sterling, VA. "If you have hotspots in the most irrelevant
places, no one is going to use them. So it is the quality of the hotspot that
counts. If they really wanted to take the argument to the next stage, then the
question is: How many users are using that hotspot, and how much revenue is
that hotspot generating?"

To Hold’s way of think, the fact that they are not saying this only
shows that "it is really early days, and people are still just getting
into this idea."

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