Hotspot Myths Revealed

Alongside the tooth fairy and Bigfoot, you might want to add the viable commercial
hotspot to the list of imaginary items. Or so says a new report entitled "Public
Hotspots: One Truth and Two Myths."

The Dallas-based market research firm Parks
surveyed 1,345 Internet households asking about usage patterns
and preferences for hotspot pricing, locations and services. Among the findings:
the hotspot audience pictured in television advertisements and the minds of
marketing departments does not match up with reality.

Most (90 percent) of respondents interested in hotspots are "road warriors"
traveling cross-country for work. Both the casual wireless user dropping into
a Starbucks or Borders or McDonald’s for a quick Wi-Fi connection and the local
salesperson (known as "windshield warriors") made up only a slight
percentage of those people interested in taking advantage of public hotspots.

"Road warriors and business travelers are likely to be the early adopters
of hotspot services — the industry has that one right," said Yuanzhe (Michael)
Cai, research analyst with Parks Associates.

The survey also reflects previous indications showing airports and hotels are
the most viable venues for successful hotspots. Unlike the cafe or fast-food
restaurant, where the benefit of public Wi-Fi is seen more for the venue, hotspots
located where road warriors linger should receive the most attention.

Cai says Wi-Fi service providers are too focused on rolling out new hotspots
and increasing coverage.

"They do not pay attention to the needs of existing and potential customers.
For example, prepaid plans are the favorite among potential users, yet the current
options are very limited," said Cai.

Hotspot providers need to concentrate on increasing security and improving
quality of service, according to the research firm.

This leads to the biggest myth surrounding hotspots, according to Cai. The
"build it and they will come" belief is built on the assumption that
the low level of use of existing hotspots is due partly to a lack of consumer

The survey of Internet users found only a dismal three percent
of U.S. households have used hotspots, yet more than 92 percent of respondents
have heard of, but never used, public Wi-Fi venues.

What about the people who have tried hotspots? How do they respond?

"Many people who have experienced hotspot services are not interested
in using the services in the future," according to Parks Associates. Cai
wouldn’t elaborate on the reasons for dissatisfaction.

In a previous report, "Public Hotspots: Moving Beyond Road Warriors,"
Cai found only five percent of the three percent of people who have used hotspots
convert into subscribers.

If there is low usage of hotspots and the use public Wi-Fi does get garners
mostly bad reviews, why all the optimism from Intel and others confident of
hotspot growth?

"Most of the reasons are supply drivers, not demand side," says Cai.

In other words, it’s another case of the folks selling the shovels being the
ones to really profit from the Wi-Fi gold rush. Intel and others see hotspots
as the perfect platform to sell their laptop computers, chips and other gear
necessary to operate and connect to public WLANs.

As AT&T, Sprint, and others move from hesitant pilot programs to full-blown
rollouts of hotspots, the old warning of look before you leap seems all the
more important.

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