Surf the internet at high-speed, wirelessly, anytime and anywhere? Have a cup of coffee while working remotely at high speed? Are WLAN Hotspots the “next big thing?” This is the question that many have been asking for the past few years. Everywhere you turn there seems to be a “hotspot”, at the local bookstore, coffee shop or even library. Yet nobody is making money off public hotspots in the U.S. yet. Why not? The first reason is a lack of security, the second is pricing that is far too high, and the third is the failure to offer the hotspot as a feature extension to a rich portfolio of services that include mobile services, and home internet access.

Mind Commerce studies have demonstrated that to break even and start making a profit, the average hotspot must have 20 to 25 users per day. The current prices being charged are too high and are causing a sluggish growth in subscriber number, with an average of 10 users per day. Based on our analysis, WLAN hotspot service should cost approximately $15 US (as a feature to accompany existing mobile subscription or similar) per month in order to experience the type of growth that would constitute a “revolution”.

Half a million customers paying $15 US per month equates to $7.5 million US a month or approximately $90 million US a year in revenue.  In Korea, a country notably ahead on the WLAN hotspot curve, a subscription with unlimited access costs approximately $13 US a month. The growth consequently has been far greater than it has been in the U.S.

There is a fundamental philosophical battle on-going with opinions divided between one side that wants to provide free WLAN access, and the opposing side wanting to charge up to $29 US a month for access. The trend has been that certain sectors which were thought to want to charge for access and gain revenue from the WLAN have realized that they want to use it instead to enhance their main business. For example, in the past 6 months there has been a growing trend amongst hotels to offer the service free to guests in their rooms, while possibly charging for WLAN access in conference rooms and lobbies.

Public Access WLAN Case Studies 2007