Public Wi-Fi usage expected to boom, biz model remains uncertain

The recent explosion of wireless data services has inflicted a heavy toll on traditional cellular networks that were not designed to handle the demand. While carriers continue to furiously bolster their networks with additional capacity and new technology, many are also looking to offload some of that demand onto Wi-Fi networks.
This is being helped by the increased inclusion of Wi-Fi chipsets into data-hungry mobile devices like laptops, tablets and smart phones. However, while the capabilities are there for consumers to divert their usage to local area networks, a new report from In-Stat shows that the business model for companies deploying public Wi-Fi networks remains in flux.
“We are a decade into the introduction of hot spot services and the market is still working out the revenue model,” said Amy Cravens, market analyst for In-Stat. “Initially the market was based on pay-as-you-go revenues, with providers hoping it would evolve into ongoing subscriptions and corporate accounts. And while there has always been a free access component, branded hotspot venues like McDonald’s and Starbucks, have made free access pervasive, which may lead to a public that is resistant to pay.”
While some companies, like Boingo Wireless, have remained in the space, there have also been numerous flame outs, like the once highly-vaunted Cometa Networks Inc.
The business model for such operations is currently split between those operations that charge a fee for such access, typically at around $10 for 24 hours, and those locations that provide free access as a way to entice people into an establishment.
The In-Stat report noted that annual venue growth is expected to remain strong over the next several years before slowing, while airport locations will continue to dominate total connections with more than several thousand sessions recorded each month.
As for devices connecting to those public hot spot networks, In-Stat noted handheld mobile devices are expected to account for half of all public Wi-Fi connections by 2012.