Spades To The Hotspot Diggers

By Craig Liddell

September 26, 2002

Australia's Pacific Internet sees potential broadband customers in hotspot providers.

Pacific Internet sees potential broadband customers in hotspot providers.

The growth of wireless providers that wholesale to ISPs, says Iain McKimm, Pacific Internet Director of Technology and Strategy, is an area of opportunity. "Each provider is interested in a niche market, such as food halls, restaurants or open spaces such as Circular Quay or Southbank. Rather than compete, they focus on what they do best." He describes their growth as a key driver of wireless adoption.

"By contrast, SkyNetGlobal had a flawed business model," McKimm continues, "as users were required to subscribe to one service." Customers are unconcerned about who provides a service, given its reliability and security.

Regardless of the business model, when a Wireless ISP deploys a hotspot they need a connection back to the Internet. In most cases that is through a DSL line. So as hotspots proliferate so do fat DSL connections, and as such a sales opportunity for fledgling broadband ISPs like Pacific Internet.

Recent experience in Singapore indicates the potential, according to McKimm. "Starbucks recently deployed hotspots within their cafes. Intel was a partner and Pacific provided DSL. Last-mile is not a big deal in Singapore due to the high-density. Each cafe had a notice on the front door that users could identify as a wireless hotspot. Starbucks considered the service as value-add and are now moving to a wholesale model with Singapore Telecommunications (SingTel)."

McKimm outlines two other key issues in the market. Firstly, he questions whether Senator Richard Alston's move to deregulate wireless hotspots is positive. "That may be similar to what happened in the ISP market with deregulation. However, the majority of companies have been very professional and obtained licences to operate a hotspot."

"A large number of wireless operators are looking for low cost entry and the ability to wholesale," McKimm concludes. "Other opportunities for the Australian market include co-branding with brand name food outlets or locations."

McKimm says Pacific will spend the next three months fine-tuning their wireless services prior to deployment next year. At the moment he will be happy with the increased demand for premium DSL accounts.

Reprinted from

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