European WLAN market to boom, then bust
The Wild West spirit that has accompanied the rapid spread of wireless Internet services across Europe is slowly coming to an end.
The European market for public wireless LAN (WLAN) services, after a significant boom phase, will encounter a bust phase for lack of viable business models, leading to industry consolidation. Eventually, the sector will be dominated by a handful of large mobile operators vying for high-end business users, according to a new study published Monday by Giga Research, a subsidiary of Forrester Research.
Although the European hotspot market lags Asia and the U.S. by between 12 and 18 months, Giga projects it to grow from around 1,000 hotspots in 2002 to 32,500 in 2007. By then, however, new 3G (third-generation) mobile broadband networks will begin to seriously rival WLAN service, according to the study.
For public WLAN services to become viable in Europe, service providers will need to correct cumbersome log-on and payment procedures as well as security and quality of service (QoS) issues, Giga analyst Bernt Ostergaard said in the report. And they will need to offer attractive pricing schemes.
European business users, in particular, are looking for public WLAN services that mirror offerings already widely available in GSM (Global Service for Mobile Communications) networks, such as roaming, integrated billing on their mobile phone bill and mediation agreements between operators and clearing houses.
