June 23rd, 2005

Free Wi-Fi Works in Multi-Purpose Environments

Some of the first press around the realities of free Wi-Fi was online today. The city of Orlando decided to shut down their free service because they didn’t feel that the level of use justified the cost.

This should neither come as a surprise nor as bad news for the public hotspot industry. Only a handful of online consumers are using the service at all today, and the majority are not willing to pay. That said, we’ve seen consumer interest nearly double from 2004 to 2005. Paid models such as that of T-mobile have experienced a similar uptake. Anyone or any municipality deploying public Wi-Fi should have realistic expectations around adoption and willingness to pay.

Also, according to our research, a small minority of municipal deployments have the exclusive goal of providing access to downtown visitors. Most of the networks are providing connectivity to government agencies and businesses, offering advertising opportunities to local businesses, allowing field workers to be more productive, etc. – they are multi-use networks which do not rely on one benefit stream alone to justify their cost. One of the difficulties, however, in justifying capital outlays and operational costs is that many of the benefits are difficult to quantify.

Orlando would likely find the return on their investment positive if there were more entities leveraging the services. Also, free trials are a great way to develop consumer interest in the services – and willingness to pay for the service longer term.

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