Suddenly, it seems, everyone’s doing WiFi.
Since the begining of the year an increasing number of Canadian companies have announced projects to make the short-range wireless technology – also known as 802.11 – available in public locales so mobile device users can link to the
Internet from airports, hotels and coffee shops.
Their plans promise golden opportunities to resellers and IT integrators, assuming users are willing to pay to do ‘Web on the go.’
These new offerings include:
• Toshiba of Canada’s “Toshiba Hotspots,” where resellers not only install the company’s wireless routers but get a slice of the online charges. Toshiba, which is running its own North American network operations centre for the service, wants to have 1,000 hotspots across this country in 12 months;
• Mariott International Inc.’s hotel conversion plan, which will see paid wireless access available in lobbies and restaurants in its prime hotels in Toronto, Montreal, Ottawa and Calgary;
• Bell Canada’s “AccessZone,” a pilot temporarily offering free wireless Internet access in international airports and downtown train stations in Toronto and Montreal.
Meanwhile, wireless Internet providers are emerging from stealth zones. Ottawa’s BOLDstreet Inc. promises to announce a channel partner program for resellers doing installations this month, while Toronto’s Spotnik Mobile, pursing a different model, says it will soon follow up its deal with Telus with the signing of more carriers and service providers.
They’re up against Vancouver-based FatPort Corp., which says it already has 42 hotspots, mainly in Western Canada. Perhaps feeling the heat, FatPort just lowered its prices.
Models for a paying public hotspot vary: Toshiba and BOLDstreet see the user buying access either on the spot by the hour, or online with a credit card; Spotnik thinks users will prefer charging the cost to their cellphone or home Internet account.
WiFi isn’t new, but the number of WiFi-enabled devices is small: In-Stat MDR estimates about 367,000 WiFi-equipped laptops, handhelds and routers were sold in Canada last year. However, that’s tiny compared to the number of people actually using the technology. One integrator estimates only two per cent of business travellers are toting 802.11-capable devices. Most use them in their homes or offices. IDC estimates enterprises are responsible for 80 per cent of worldwide sales of WiFi access points and network cards.
So why are companies going public about WiFi now?
In part it has to do with the usual pace of adoption of new technology here. Hotels and Starbucks coffee shops in the U.S. have been offering WiFi connectivity for months; we’re just catching up. The cost of WiFi chips is plunging, helping push sales of WiFi devices (see chart).
Accelerating the movement is Intel Corp., which will release a new notebook chip bundled with a WiFi-enabling module called Centrino this month. As this issue went to press Intel was holding a press conference in Toronto to hype Centrino technology along with new laptops using it from Acer, Dell, Fujitsu, IBM, MDG and Toshiba.
Pushing WiFi hotspots, says Dave Senf, Toronto-based manager of worldwide e-business operations at IDC Canada, is a way manufacturers can push demand for the technology. IDC estimates that by the end of this year there will be 48,000 public hotspots in Canada and the U.S., and 84,000 next year.
Another factor is that software companies are increasingly interested in adopting their applications for wireless access, adds Piero Romani, national director of solutions enablement at NexInnovations Inc., which has built wireless infrastructures for several clients.
“We’re seeing a lot more activity from application vendors, who are creating vertical-specific applications, he says. “You get a lot more customer interest in the technology when there really is an application you can bolt on to streamline your operation.”
WiFi’s rise is also linked to the death in January of the HomeRF Working Group, a consortium of companies backing the competing wireless technology including Proxim Inc., Motorola Inc. and Siemens AG. However, WiFi had the endorsement of PC manufacturers and the Institute of Electrical and Electronic Engineers (IEEE).
But while acknowledging there’s growth in the wireless industry, Senf says the model resellers should focus on – enterprise, hotspot or home – is still up in the air.
“The rationale for deployment in the enterprise is still fuzzy,” he says. “It’s got that cool factor, the ability to be a corridor warrior and not have to find an Ethernet cable.” Some companies may find cost savings going wireless instead of installing cable, he adds.
But against that are security risks and the need for special software to manage multiple access points.
As for public hotspots, Senf says IDC projects slow growth in the next few years. “If you build it, will users come?” he asks. Will they pay? Will they buy multiple subscriptions when they learn the airport doesn’t have the same connectivity as their favourite coffee shop?
Those looking for lessons should note that U.S. WiFi fee-for-service provider Joltage was shocked into silence this year.
“The reality is the users aren’t there yet,” admits Tom Camps, president and CEO of BOLDstreet, one of Toshiba’s partners which will provide technology and back-office solutions to resellers to market.
“There isn’t a company on this planet in this space that is profitable. Two weeks ago T-Mobile, which has the best brand-name location in the planet in Starbucks (in the U.S.), lowered their prices. If people are beating down the doors you don’t lower the prices. They’re trying to find a sweet spot to generate demand.”
That’s one reason why Mark Wolinsky, co-CEO of Spotnik Mobile, is targeting carriers and ISPs. “To turn this into a telco-grade service you need strong financing, good partners and good technology.”
Still, with IDC predicting 60 per cent of North American workers will be mobile employees by 2006, many see opportunities to be seized with room for channel players. Toshiba is luring resellers with the promise of sharing 30 per cent of a customers’ online fees, plus the usual margin for the hardware, installation and maintenance.
For providers it’s more than that, suggests Camps of BOLDstreet. “It’s less important to have locations than to have subscribers,” he says, “because that’s who has the money.” His company is run as a sales and marketing organization using those subscribers, he says, so it can survive until the users come and when the inevitable industry consolidation happens. Similarly Wolinsky says his pitch to retailers is that Spotnik will let them market their location to its customer base.
“There’s an ecosystem starting to form,” says Senf of IDC Canada of the emergence of wireless hotspots, hardware and software vendors “It’s important that vendors and resellers identify their positions within that ecosystem and learn what users want and how to maximize their profitability.”
