The Wireless Revolution
	Wireless Public Access
	the Hot Spot Value Chain
	Hot Spot Facts
	Who Will Win?

The Wireless Revolution

The wireless revolution is upon us and is sweeping the globe. Cahners In-Stat estimates that the Wi-Fi hardware market will grow to $5.2 billion by 2005. The same explosion that we've seen in cellular phones is about to catch on with mobile computing. Apple computer recently introduced two new laptops because they believe in the near future half of all computer sales will be laptops. Intel recently released its Centrino brand wireless laptop solution, demonstrating that wireless computing is here to stay and on the rise.

Our generation is an on-the-go population. More and more business people are working outside of the office, driving the need for wireless connectivity.

• Annually there are 43 million business travelers in the US, of which 70% carry laptops. On a daily average 15 million North Americans work on the road.
• 31% of business travelers use their laptops for 3 hours or more a day.
• By 2005 laptop computer use in USA will grow to 60 million units, while worldwide usage is predicted at 150+ million units.
• Forecast for wireless connectivity: Regular wireless users are estimated at about 2 million in 2002 and predicted to grow to 20+ million by 2006 in USA alone.
• Shipments of wireless enabled laptop computers is expected to grow 15+ million in 2005, compared to 2.9 million in 2001.

All this growth in wireless computing and Internet is creating a blossoming wireless Internet industry.

• In the US the public Wireless LAN market is forecast to include 21 million users and to generate US$3 billion in annual revenues by 2007.
  (Source: Analysis Research, Stand: May, 2002)
• WLAN worldwide service revenues will be reaching $9.5 billion by 2007.
• The majority of WLAN service revenues will come from business users in airports, business hotels and exhibition centers. In fact, use of WLANs in cafes, bars and restaurants will begin to decline, leaving 'dead spots' in revenue and service.
• There is the possibility that the contribution made by residential customers can substantially increase in latter years as consumer devices (PDAs, phones) and consumer hotspots (cafes, restaurants) proliferate.
  (Source: Alexander Resources, Stand: February, 2003)
• Based on the current rate of consumer acceptance to wireless technology, the Boston Consulting Group estimates global mobile commerce will generate revenues of $ 100 billion by 2003.
  (Source: Cahner's In-Stat Group., Stand: October 18, 2000)
• Wireless public area access service revenue is expected to grow from $3.9 million in 2001 to $224.7 million in 2005.
  (Source: In-Stat/MDR reports, Stand: June, 2002)
• Some estimate that there are nearly 2 million potential hot spot locations nationwide, with only a small fraction of these being tapped today. Clearly there is a large potential for future growth.

Wireless Public Access Over the Next Several Years:

• The number of locations available for public access is estimated to grow worldwide from 2,000 in 2001 to 42,000 in 2006.
• Providers must still find the delicate balance between the pioneer mentality of expanding footprint and the reality of actual subscription levels.
• Marketing and branding efforts must be brought to the forefront as the amount and caliber of competition in this market escalates.
  (Source: In-Stat/MDR reports, Stand: June, 2002)
• 90% of public access revenue will be derived from pay-per use access in 2002, largely due to the relatively undeveloped state of the market. However, in 2006 almost 50% of individuals public access connectivity will be subscribers to one or more services.
  Source: In-Stat/MDR reports, Stand: June, 2002

The HotSpot Value Chain

The hotspot value chain is evolving different paces and in different directions worldwide. Factors affecting this include:

• The higher proportion of laptop PC users in North America.
• he amount of investment by wireless and wire line service providers, as well as the emergence of nontraditional providers such as franchises.
• Disparities in regional networks of competing and complementary 2.5G and 3G technologies.
• Regulatory issues in Europe at both 2.4GHz and 5GHz
  (Source: Gartner Research, Stand: October 10, 2002)

HotSpot Facts

• The principal wireless public area markets to have emerged focus primarily on delivering services to the business traveler.
• Service providers are attempting to create a footprint that touches them on multiple locations including, airports, hotels, train stations, and cafes.
• The hotspot market in the United States and North America will continue to dominate the market through 2006. However, as a percentage of deployments, the North American market is expected to decline between 2001 and 2004. During this period, other regions are expected to outpace North America in growth of footprint.

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Who Will Win?

• Wide availability of access and roaming agreements are key to success
• From a commercial standpoint:
  1. Mobile operators have an advantage but they will need to move fast
  2. Independent WISPs have a clear focus and can move quickly
  3. System integrators have an opportunity to enable the market for users that value a dependable and wide-footprint service

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