Public WLAN Access in Western Europe and USA: market analysis and forecasts

SUMMARY

Product overview

The market for public WLAN is still developing: many different types of player are emerging, and a footprint is building across both Europe and the USA. However, despite this build-out, the business plans of players are still unproven, and there is little data available on customer uptake and ARPU to date. Added to this, the current uncertainty in the business climate results in a high degree of scepticism towards the prospect of any new market which is expected to grow rapidly and deliver profitable revenue streams. The fact that the market has not developed as fast as it could have done has lead to many questions as to what revenue models for a public WLAN service provider are going to be sustainable in the long term.

This report reviews recent market developments in the USA and Western Europe, and contends that the market potential for public WLAN remains significant. However, several factors need to be addressed for this potential to be realised. The report evaluates the state of the market according to progress in the areas of device availability, network coverage and roaming, pricing and service offerings, regulation, technology standards, and business models. In addition, it makes recommendations for the key players that are active in the public WLAN market: mobile operators, fixed operators, WISPs, service aggregators and site owners.

Public WLAN Access in Western Europe and the USA: market analysis and forecasts answers your key questions:

• What type of players are most active in the public WLAN market in Western Europe and the USA?
• How do pricing and revenue distribution arrangements need to evolve to ensure market growth?
• What are the main uncertainties that need to be overcome for the successful development of this market?
• How quickly will WLAN devices penetrate the business and consumer markets?
• What rate of growth can be expected in numbers of hotspots?
• What options do service providers have for increasing their effective WLAN service coverage?
• How many public WLAN users will there be?
• What will be the total revenue generated by public WLAN services in Western Europe and the USA?
• What strategies will ensure success in the public WLAN market?

Who should read this report?

• Mobile operators: understand how public WLAN will affect the cellular market, and its impact on key cellular customer segments.
• Fixed operators and MVNOs: evaluate how public WLAN services can provide a route for entry into the market for high-speed cellular data services.
• Analysts: learn how the market will evolve and identify those players that are likely to participate.
• Equipment vendors: quantify by country the scale of the equipment and implementation opportunity related to public WLAN networks. Determine key potential types of customer and the motivations that will encourage them to invest in this market.

TABLE OF CONTENTS

0 Summary

1 Despite slow progress, the growth potential of WLAN is still substantial

2 Hotspot coverage is growing across Western Europe and the USA

2.1 There are now just over 4800 hotspots in Western Europe and the USA, and we expect this to grow to 57 000 by 2007

2.2 Investment by both major telecoms operators and independent players is increasing

2.3 Roaming is acknowledged as essential to increasing an operator\'s footprint

3 Technical and regulatory barriers to growth are being addressed

3.1 Interoperability issues with other technologies are being resolved

3.2 The evolution of technology standards will aid the market in the long run

3.3 Security concerns can be addressed with effort from service providers and users

3.4 Regulation is favouring making spectrum available for public services

4 Service propositions and pricing must evolve to boost adoption

4.1 Service development must have the mass market in mind

4.2 Pricing mechanisms are still evolving

5 Several business models have emerged for WLAN

5.1 The distribution of revenue between key players depends on their relative negotiation strength

5.2 Mobile and fixed operators will have the ultimate advantage and independent players should partner with them

6 The public WLAN market could generate USD5.47 billion by 2007

6.1 WLAN devices are rapidly penetrating the market and will allow new value-added services to be offered

6.2 Hotspot deployment will move beyond the high-value locations that currently dominate

6.3 Pricing will evolve to support new service propositions

6.4 The consumer market will take off from 2004

6.5 Total revenue for public WLAN has the potential to reach USD5.47 billion by 2007 for Western Europe and the USA

Actions

• Analysys Research: related reports and services
• Custom Research: meeting your information needs
• Analysys Consulting: business planning for WLAN services

List of Figures and Tables

• Figure 2.1: Hotspots in Western Europe, by country, February 2003
• Figure 2.2: Total hotspots in Western Europe
• Figure 2.3: Total hotspots in the USA
• Table 2.1: Fixed and mobile operators in the WLAN market in Western Europe and the USA
• Table 2.2: Independent operators in the WLAN market in Western Europe and the USA
• Table 2.3: Selected companies that have withdrawn from the public WLAN market
• Table 3.1: Regulatory status for the 2.4GHz and 5GHz bands in selected Western European countries and the USA
• Table 4.1: Pricing mechanisms adopted by key service providers in Western Europe and the USA, February 2003
• Table 4.2: Suitability of pricing options according to different location and user types
• Figure 5.1: The public WLAN value chain
• Figure 5.2: Expected revenue split across the value chain
• Table 5.1: Attractiveness of the main types of location
• Table 5.2: Revenue-sharing agreements with property owners selected by some service providers
• Table 5.3: Dominant business models in Western Europe and the USA
• Figure 6.1: WLAN-enabled access devices in Western Europe, by country
• Figure 6.2: WLAN-enabled access devices in Western Europe, by type of device
• Figure 6.3: WLAN-enabled access devices in the USA, by type of device
• Figure 6.4: Public WLAN hotspots in Western Europe
• Figure 6.5: Public WLAN hotspots in the USA
• Table 6.1: WLAN penetration by type of location in Western Europe and the USA, 2007
• Figure 6.6: WLAN hotspots in Western Europe, by location type
• Figure 6.7: WLAN hotspots in the USA, by location type
• Figure 6.8: Examples of pricing for 24-hour flat-rate access
• Figure 6.9: Examples of pricing for monthly flat-rate access
• Table 6.2: Average monthly ARPU levels for Western Europe and the USA
• Table 6.3: Proportion of owners of WLAN-enabled devices who will take up public WLAN services when available, 2007
• Figure 6.10: Public WLAN unique users in Western Europe, by country
• Figure 6.11: Public WLAN unique users in Western Europe, by type of user
• Figure 6.12: Potential public WLAN users in the USA, by type of user
• Figure 6.13: Total public WLAN revenue in Western Europe, by country
• Figure 6.14: Total public WLAN revenue in Western Europe, by type of user
• Figure 6.15: Total public WLAN revenue in the USA, by type of user