Public Wi-Fi: Europes Magic Broadband Bullet?

While they may ultimately be competitors, both companies have a common raison dêtre: Broadscape director Theo Platt agrees with Wialess.coms marketing director Brian Parker that public Wi-Fis user base mainly comprises DIY road warriors and work groups from local offices at the moment. This works against large national operators, who hope users will want a national name and network but are currently placing their hotspots in "destination" locations such as hotels and airports, rather than local gathering areas or on the way to local meetings. And both are seeing happy customers in the café and bar—clients who are finding the systems easy to swallow and quick to pay for themselves with minimal fuss.

Love them or hate them, what the large operators are doing (along with Intel, Microsoft, McDonalds, Starbucks and their ilk) is providing marketing budget for the entire nascent Wi-Fi industry, both in the U.S. and Europe. Brand-name recognition is very important in the European market as a whole, since users in this region are less likely, in general, to make a large investment in a service run by an unknown name, but do feel comfortable making free or low-cost usage of a service that is associated with known names.

As happened with the free ISP boom of the late 1990s in Europe, there is still plenty of room for free public Wi-Fi to take off and grow; the economics of running these services remain favorable thanks to low equipment costs for both provider and user—costs likely to drop as usage increases. And, like the free ISP wave, these independent operators probably have two to three years to grow their businesses, spreading Wi-Fi as a model along the way.

The smart ones will do as their fixed-line predecessors did: grab good real estate and build a user base, then wait to sell out to the big operators when the time is right. In the meantime, the European market will get a needed shot in the arm from a new source, and most importantly, usage will be stimulated.

Scott Smith is Managing Partner of Cumulus Research Partners, a London consulting firm that specializes in helping companies understand the social impact of new technologies.