Wi-Fi Hotspots: Avoiding a Dotcom Redux

Guest commentary: Amidst increasing concern that the Wi-Fi bubble is going to pop the way the the dotcom one did, Scott Smith finds reckless deployment and suggests some key metrics to track.

For those with the experience of having watched numerous new communications technologies take root in the big boom and even bust of development over the past decade, it all seems a bit too familiar. With so many other sectors down in the dumps at the moment, Wi-Fi has come along to provide industry veterans and watchers alike a desperately needed shot of excitement, activity, employment, and possibly even revenues.

But as the money flows, the ad machines crank up, and the marketers of the world stay busy creating new logos and grab the remaining few fun names for Wi-Fi start-ups, no one is really checking to see who is on the other end.

Who are the heavy users of Wi-Fi? How much segmentation is there? What do these hordes of promised users want? Is it an army of road warriors, a wave of casual Web surfers, or a mixed bag of many user types? How much physical business is hotspot deployment creating for the facilities owners? How do operators differentiate their marketing and pricing, if all they know about are traffic volumes?

Where do we enable VoWLAN, and where do we give service away for free? How can this industry take root with only secondary ways of gathering business intelligence about levels of spending from billing, and patterns of usage from network operations? In short, how can the Wi-Fi "industry" take the big step forward from spray-and-pray hotspot deployment and marketing based on traditional service and equipment marketing placement, and plan business strategies based on detailed, segmented intelligence about this new service area?

At the rate hotspots are being deployed, now thousands per month globally, there can be little sustainable argument that hotspot coverage is proceeding with hard ROI data to back up the patterns. I have spoken to a number of operators who, at the moment, have little else to rely on except visual observation ("I saw a few groups of co-workers in here over the past few weeks"), raw network traffic and sign-ons (if they are captured), and a loose correlation with food and drink receipts. Beyond that, no one seems to be tracking and analyzing patterns. As a result, they have a hard time putting a figure on how successful their customers investments in hotspots have been.

A representative of one company touting its high rate of hotspot deployment told me with a straight face recently that business intelligence doesnt matter to them. "We set up hotspots for our clients, and who uses them is their problem. We just put them out there, and we will worry about making money later." Re-read that last statement: we will worry about making money later. Either a mad oil-rich prince secretly funds this and many other companies, or they havent looked around lately and realized that the industry is in the state it is in precisely because of that approach over the last five years.

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