March 23, 2006



Posted: 08.01.05

Wireless Hotspot Activities Heat Up

Alternatives range from free services and pay-as-you-go to tightly managed networks that offer centralized billing, access to multiple networks and a more business-like approach.
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By Tim Scannel

Palmetto Health is a healthcare collaborative based in South Carolina that includes three hospitals, more than 1,300 beds and a medical staff of more than 1,000 professionals. In addition to its first-rate medical facilities and staff, Palmetto Health offers patients and visitors a service that has little to do with medicine but can be no less therapeutic to an individual in need of a quick e-mail fix or a splash on the Internet. Earlier this year, the hospital became the first in midland South Carolina to offer free wireless Internet access to patients and visitors at internal Wi-Fi hotspots set up at three of its locations. The public wireless service is an extension of the hospital’s own Bluesocket BlueSecure network, which is used by doctors, nurses and other hospital staff for improved point-of-patient care. Public hotspot users are channeled away from the hospital’s mission-critical network and routed directly to the Internet to avoid any security problems.

In launching the internal Wi-Fi network, Palmetto Health has joined a growing number of businesses offering free 802.11 wireless access to anyone with a wireless card or embedded wireless capability. These businesses include hotels and restaurants that view wireless access as a way to pull in new customers and showcase their use of cutting-edge technology.

Free Vs. Fee-Based Services

Despite the increased availability of free 802.11 wireless services, pay-as-you-go and subscription-based Wi-Fi services are growing rapidly as more mobile workers look to on-the-road wireless services to maintain contact with their companies, customers and supplies. T-Mobile HotSpot, one of the largest and most aggressive players in the Wi-Fi market, presently claims more than 500,000 customers and has more than 25,000 locations worldwide, including positions in such high-profile locations as Starbucks coffee houses, Borders and FedEx/Kinko’s shipping and printing centers.

In June, T-Mobile announced it was adding more than 100,000 hotel rooms and nearly 40 more airports to its wireless portfolio. The company is also working toward network-sharing deals with competing providers such as Wayport and Boingo Wireless, two relative veterans in the Wi-Fi wars with more than 9,000 and 17,000 locations, respectively.

The problem with most Wi-Fi networks today is that there are too many alternatives and too many separate pricing models. For example, a typical Wayport hotel connection costs $9.95 per day, while an airport link is priced at $6.95 from the time you log on until midnight that day. This could be a bargain if you use your hotel connection for more than just e-mail and make use of voice over IP (VoIP) networks like Skype, which offer free local and long distance Internet-based calling and international connections for just a few cents per minute.

This is an especially cost-effective maneuver if you are traveling internationally and use a Skype-enabled handheld to make local or international calls
and avoid hidden hotel fees and exorbitant cellular
roaming charges.

Per-day Wi-Fi rates can be pricey, though, if you
are hopscotching across the country or the world and making connections at each airport. While companies such as T-Mobile and Boingo Wireless offer monthly or yearly subscriptions for wireless access through participating locations, non-subscribers may be forced to sign up for a separate per-day rate at each location, since participating airports and hotels get a cut of the wireless revenues.
Pricing for access to public Wi-Fi hotspots is expected to drop considerably over the next few years, however, as more free systems become available and demand for these networks increases. In fact, per-user revenues could drop from an average $30 per month today to $3 or less by 2008, says market watcher Pyramid Research.

Meanwhile, the range of free and not-so-free hotspot services and alternatives remain confusing, especially for mobile road warriors faced with the task of filing monthly expense reports and validating all that sporadic hotspot activity. One of the most obvious solutions is to sign up with a national service provider that offers a flat per-month rate for 802.11 wireless access and has a network that is large enough to cover almost any area of the country.

T-Mobile is clearly the leader in this respect, since it has the largest aggregated network of hotspots in the world and plans to grow this network considerably over the next few years. Pricing ranges from 10 cents per minute on a pay-as-you-go plan to $39.95 per month for an all-you-can-eat hotspot access account. Corporate rates and plans are also available, and T-Mobile offers Download Manager software on its Web site that can aggressively sniff out and lock onto an available 802.11 signal (the software can be used without a T-Mobile subscription and is a handy little application to have in your mobile bag of tricks).
Wayport’s wireless services are available in many hotels, as well as in such recognizable places as McDonald’s restaurants and Hertz car rental agencies. Most people will sign up for the company’s per-day rate of $9.95 through a hotel connection. However, Wayport also offers a variety of longer-term packages, including prepaid connection cards ($25 for three connections, $50 for eight connections) and no-contract monthly plans ($49.95 per month). The Wayport service is not the most inexpensive, and connections are less available than T-Mobile’s; however, it does have a longer history of providing 802.11 hotspot access to business travelers and more experience in developing wireless remote access and divisional computing solutions to major corporations.

Boingo Wireless is one of a handful of wireless service aggregators that has built a business on striking deals with hotspot providers to offer users consolidated billing and support. The company, established by Earthlink founder Sky Dayton, offers one of the least expensive service plans in the industry ($21.95 per month), as well as a wide range of services and hotspot locations. Earlier this year, it also became one of the first companies to cover all bases in mobility by offering wireless access aboard select airlines through a partnership with Boeing and its in-flight Connexion wireless service. Boingo wireless access is now available on Connexion-equipped flights from Lufthansa, Scandinavian Airlines System, Japan Airlines, ANA and Singapore Airlines. Several others have also announced plans to offer similar services sometime this year.

Other cellular service providers, including Sprint PCS, are dipping their toes in the hotspot business, as next-generation phones with built-in 802.11 enter the market. In April, the company announced new deals that boosted user access to 19,000 Wi-Fi hotspots and networks internationally. That number is expected to rise to 25,000 before the end of this year, sources say.

Taking a Wider Wireless Approach

Of course, tapping into 802.11 hotspots isn’t the only way to surf the Web. Cellular service providers are taking advantage of any apparent confusion over Wi-Fi service and access plans by offering wireless wide area network equipment and plans that let your notebook or handheld computer access the Internet, exchange e-mail and securely transfer files through corporate firewalls and
virtual private networks.

Emerging technologies, like city-wide WiMAX wireless services, could also put a significant dent into the business models of coffee shop hotspots. Philadelphia, for example, already offers free wireless services along its parkway and recently announced plans to expand that wireless bubble to encompass its entire 135-square-mile area. As part of this plan, the city will sell wholesale wireless access to ISPs, telecommunications companies and others that will in turn handle all of the billing, marketing and customer service issues for users. The expected monthly cost to consumer and business users for this city-wide wireless service is $16 to $20, which is considerably less than current wired broadband access rates. •
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