Hot spots heat up in Asia Pacific
Published: 05 Dec 2003 09:50 GMT
Market scepticism hasn't dampened industry fervour in Asia-Pacific for rolling out public wireless-access points, known as hot spots, nor has it put brakes on user subscriptions, according to a study by analysts IDC.
From mid-2002 to mid-2003, hot-spot subscriptions grew 13 times in Asia-Pacific outside Japan, said Tim Crowley, a senior analyst with IDC.
The number, however, is tiny compared with the number of Internet access subscribers in the region, and will remain so until 2008.
Companies most gung-ho about hot spots have come from North Asia, and include Korea Telecom, China Telecom and China Netcom.
But the country that generates the highest average income from each hot spot is India, as many of its access points are located in business hotels, rather than in cafes and restaurants, said the report.
The hot-spot infrastructure build is happening even though there is market doubt over whether players can make money from providing access.
"Despite the existence of several different business and revenue models across the region, and the absence of proven business plans, service providers are moving forward with providing public WLAN services as a value-added service for subscribers," said Crowley.
Today, the majority of hot spot providers are telecoms firms offering the service as part of a broadband access package, said IDC. Hot spots are also owned and operated by small, specialist operators or resellers.
The average revenue per user (ARPU) for public wireless LAN access and the overall revenue the business generates for telcos will be tiny compared with Internet access revenues, and will continue to remain so up to 2008, said IDC.
Though the current monthly ARPU is only about $8 (£4.63), subscriber numbers are expected to reach 700,000 by the end of 2003 for the region, generating total revenue of almost $44m. The subscriber market projected to hit close to 7 million subscribers by the end of 2008, with total revenues going past $600m.
However, in comparison with the total Internet access services market, including both dial-up and broadband, this represents only 0.03 percent of total revenue in the first half of this year, according to IDC.
To stay competitive, the analyst firm said that industry alliances that provide users with Wi-Fi roaming will be crucial, and this is already being seen in recent announcements in Singapore.
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