In the past two years,
hundreds of new companies have begun setting up
Wi-Fi access points (called "hotspots")
in cafes, hotels, airports, book stores and other
public spaces. These “hotspot operators”
or “HSOs” install Wi-Fi access points
and then turn around and sell high speed wireless
Internet access for a fee.
Hot
spot operators enjoy a low barrier to entry: as
little as a few hundred dollars for equipment and
$50-$100 per month for a DSL line. Larger hotspots
require additional equipment, antennas, and faster
connections such as T1 lines. Still, the cost of
establishing a hotspot is far lower than setting
up a cellular node – Wi-Fi uses unlicensed
spectrum vs. licensed spectrum that can cost billions
of dollars, and the equipment necessary to set up
a hotspot costs hundreds of dollars versus hundreds
of thousands or millions in cellular. The contrast
is startling.
Forces
outside the industry are rapidly arming users with
Wi-Fi radios. People are already getting Wi-Fi in
their laptops and PDAs for use in the office or
home. One day soon, the majority of connected consumers
will have one or more Wi-Fi devices, which is all
the equipment they need to connect to Wi-Fi hotspots.
This is a completely new concept in the wireless
industry, which to date has had to subsidize the
cost of each phone or other device that connects
to a network. Such costs don’t exist in the
Wi-Fi hotspot business.
Further,
Wi-Fi is fast, 11 million bits per second (11Mb)
and up, or over 100 times faster than a modem connection.
Wi-Fi is significantly faster than the “2.5G”
wireless services provided by cellular carriers,
which typically deliver throughput between 40k and
60k. The actual speed experienced y hotspot users
is determined by the hotspot’s connection
to the Internet, which can range from low-end DSL
(384k) to one or more T1s (1.5Mb and up), but this
still promises much faster speed than any other
available technology.
When
you factor in the low cost to set up and run Wi-Fi
hotspots, the rapid spread of inexpensive Wi-Fi
cards and devices and Wi-Fi's use of totally free
spectrum, it becomes clear that Wi-Fi delivers a
price per bit that no other wireless technology
can touch. With
Wi-Fi’s low barrier to entry and mass appeal,
hundreds of thousands of Wi-Fi hotspots will saturate
heavily trafficked areas in the next few years.
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