Gartner: No Money at Hotspots...Yet

By Eric Griffith

March 27, 2003

The latest from Gartner says that while the number of users of WLAN equipment in North America will continue to grow through 2007, hotspot providers shouldn't count on making money until then.

At the Gartner Symposium/ITxpo 2003 in San Diego this week, research and advisory firm Gartner said that even though the number of "frequent" WLAN users in North America will shoot from 4.2 million this year to 31 million by 2007, the chances are slim that the providers of public access hotspots will see any profit until the audiences reaches that saturation point.

It comes down to the standard chicken-and-the-egg problem. With only around three or four thousand hotspots in the United States and Canada today, it's not enough to drive people to using Wi-Fi in public. However, according to Ken Dulaney, vice president and research director for Gartner, "100,000 hotspots within the next five years is an innovation that cannot come too soon." The company expects this growth will be driven by applications that need broadband connections.

The firm is recommending that businesses who want WLANs today embrace 802.11b, which the say will still be the "technology of choice for hotspot frequenters" for some time to come.

Non-hotspots -- that is, enterprise networks -- will also continue to grow significantly as companies look past WLAN's previous security issues. They expect more than 50 percent of WLAN deployments will be within vertical markets such as education and healthcare over the next year.

Gartner's previous reports have pegged 11b as the "superior solution" for businesses until at least late in this year. They expect a mix of 802.11g/a will be replacing it early next year, bringing additional bandwidth for uses such as multimedia and voice. They singled out 802.11a (which runs in the 5GHz band, compared to 11b/g which is in the crowded 2.4GHz band) as having "significant technological advantages over 802.11b networks" including less interference and more channels for traffic to travel on.



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