Analysts Sour on Commercial Wi-Fi
Source: Wired
At first glance, the South Pacific island of Niue doesn't appear to be a competitive threat to some of the world's largest technology companies. The country, which is about 100 square miles, has 1,750 residents, who survive on an annual budget of $5.5 million, according to a tourist website.
But a U.S. nonprofit organization has accomplished a feat on Niue that may make some wireless companies a little nervous: It has provided every single person on the island with free Wi-Fi Internet service.
Even though it didn't distribute the computers and PC cards necessary to tap into the service, the Internet Users Society Niue built a comprehensive network -- which includes solar-powered repeaters in coconut trees -- to give everyone on the island and its visitors open and free Wi-Fi Internet access. About 300 of the island's residents own computers, according to Bill Semich, president of the nonprofit.
"It's a tiny country," Semich said. "It is the perfect place to get everybody unwired."
But Semich's project may pose a threat to one group: companies such as AT&T, IBM, Intel and T-Mobile, which are trying to build business by selling Wi-Fi service in coffee shops, hotels, airports and other popular venues.
Even though the number of places where people can get Wi-Fi Internet access has exploded -- 20,000 Wi-Fi "hot spots" exist worldwide today and that number is expected to skyrocket to 190,000 in 2007, according to market research firm IDC -- there is little evidence that people are paying to use the service. Wi-Fi users number 687,000 today and that is predicted to spike to 25 million in 2007, but IDC analysts don't break down their numbers between paying customers and those looking for freebies.
However, plenty of anecdotal evidence indicates that groups like Semich's are putting up free hot spots, while the for-pay ones are suffering.
At Starbucks, for example, only "tens of thousands" of customers are paying to use the company's much-publicized Wi-Fi network, out of 22 million who file through the company's stores every week, a company representative said. The network has been up and running since August in 2,100 -- or 60 percent -- of Starbucks coffee shops in North America.
