Analyst: Canada lagging in hotspot deployment

By the end of 2002 there were less than 20,000 hotspots found globally. By the end of this year, there will be almost 46,000 – but according to the findings of a report released on Monday, Canada represents a small slice of the Wi-Fi pie.

The latest Global Wi-Fi report from Pyramid Research (PYR) indicates that North America will lag behind Asia-Pacific by more than 13,000 deployed hotspots by year-end – Asia-Pacific will have 24,292 and North America will have 10,970 – 1,100 of which will be in Canada.

John Yunker, an analyst with Cambridge, Mass.-based PYR said that although Canada’s hotspots will only make up 1,100 of the almost 11,000 North American hotspots by the end of the year, the numbers have to be put into perspective.

If you look at the U.S., 10,000 sounds like a lot of hotspots, but a third of those are T-Mobile’s Starbucks locations, which is a money losing operation, Yunker said.

“If you take Starbucks out of the equation, the number in the U.S. drops considerably.”

Although there is a significant difference between Asia-Pacific and North America, Yunker noted that hotspots are throwing Asia “off the charts.” For example, Korea Telecom alone will deploy 15,000 hotspots by year-end, said Yunker.

“If you were to take [Korea] out of the equation, Asia, North America and Europe would all be in a dead heat,” he added.

Although North America’s numbers seem small when compared to Asia-Pacific, Yunker said having over 10,000 hotspots is significant. He added that in the future, hotspot counting will be less relevant than the type of business model being used.

The number of hotspots alone don’t necessarily make a network valuable, it’s the type of location and the business model behind it, Yunker said.

“Korea is such a small country and most of the people live in cities so it’s natural to do hotspot deployments there,” Yunker explained. “If you take Canada or the U.S. where there’s huge areas of wide open space and there is a lot more suburban living going on, it’s a little more challenging to get a high Wi-Fi hotspot per capita deployment.”

Yunker said that as Wi-Fi technology continues to evolve, users will see carriers, both fixed and mobile, using Wi-Fi to complement existing services.

Wi-Fi is not going to be a cash cow by any means. It will be used more strategically to gain customers or retain customers or sell them additional services and products, Yunker said.

Because wireless technology is changing quickly, Yunker said it is possible that technologies including WiMAX – a technology which can be used as an alternative to traditional T-1 technology, as a point-to-point digital circuit provided by telephone companies or as a digital subscriber line (DSL) substitution for broadband connection to the Internet – may take over at hotspots, but that the locations themselves aren’t going anywhere.

“The thing about hotspots is that it’s hard to say that they will go away anytime soon just because it is a very efficient and cost effective way to deliver broadband data within a local area. It doesn’t get much better than that,” he explained.

Although WiMAX has been a recognized standard since January by the Institute of Electrical and Electronics Engineers (IEEE), Yunker said it will probably live in Wi-Fi’s shadow for at least another ten years. [Please see Emerging wireless standards offer alternative to T-1.]

The reason that some users may believe that Wi-Fi is a passing fad is due to the absence of a real business model for commercial Wi-Fi service, Yunker said. He added that this will not kill Wi-Fi because the top two locations to use the technology are the home and office.

“[Wi-Fi] is one of those things – it’s kind of addictive. It’s hard to give up.”

According to a study released by IDC Canada Ltd. in August entitled Use of Corporate Wireless LAN by Canadian Enterprises, Q1 2003, 31 per cent of large businesses and 18 per cent of medium-sized firms are currently using wireless LANs (WLANs). According to IDC, this represents a three per cent increase in WLAN use in both market segments from a year ago.

Additional information about Pyramid Research can be found online at

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