14th January 2004 - new report by BroadGroup, the London
based consultancy, reveals that Wi-Fi tariffs are converging
on more standardised products as competition emerges
from North American roaming entrants wishing to extend
the aggregator model.
The report, Wi-Fi Tariffs Europe, which dissects service
tariff categories offered by 97 providers in 20 countries
across Europe and eastern Europe. In addition to shifts
in pricing over the 12 month period to evince key trends,
the report also suggests that a correlation between
larger or more connected players and higher prices increasingly
characterises the general market trend, with tariffs
geared for corporate users. However entry by North American
players with significantly lower price levels, although
very limited at present, could impact and extend over
Based on research across all service providers, the
report found that the average price for one-hour connectivity
via public access WLANs in Europe is Euro 6.47 (less
taxes). It also identifies pricing across the other
eighteen price categories. In the meantime, the report
noted the differential between average pricing for one-hour
usage in Europe, and 24-hours is 57%. Most pricing categories
Retail prices for public Wi-Fi in Europe remain
quite high although there is some evidence of overall
decline, but it is slight, commented Philip Low,
managing consultant at BroadGroup and report author.
The report also assessed hotspot deployment and found
that around 71% of hotspots reside in only 5 countries
in Europe. The remainder of countries covered
in the report have deployed less than the benchmark.
Put starkly, Europe and Eastern Europe combined have
a lower hotspot population than South Korea. Execution
of the announced deployment plans over the next twelve
months will really determine the future of public Wi-Fi
across the region.
Evidence cited in the report continues to suggest that
service providers are still experimenting with tariff
categories. Despite apparently unsustainable pricing
by some WISPs, there is an increased focus on standardised
products suggesting that market is already moving towards
commoditised products. There is also evidence that the
drive for subscription-based businesses and repeat revenues,
has led to an increase in certain tariff categories.
The report identifies a clear relationship between
pricing and deployment. It believes that the degree
of pressure on prices in Europe over 2004, will relate
directly to the number of hotspots deployed, and the
willingness of service providers to entertain, and ability
of aggregators to secure further roaming agreements.
Conversely this scenario also suggests consolidation
pressures will mount and some service providers will
find their models are unsustainable. Deployment also
impacts the opportunity for a wholesale market to grow
and with it a potential reduction in price levels, and
development of consumer propositions.
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