Hot-Spot Service Revenues To Grow As Market Demand Increases

Hot-spots are largely the preserve of business travellers (see Executive Travellers Drive Hot Spot Market) but Parks Associates estimates that 2003 service revenues will total $150 million rising to $814 million in 2007. This equates to a compound annual growth rate of 50% over four years.

“Although these service revenues will be a very small portion of total telecommunications revenues, the intangible benefits hot spots can bring for both venue owners and service providers will still provide investment incentives,” said Yuanzhe Cai, research analyst with Parks Associates. “And as this market matures, different market segments will start to use these services.”

For the purposes of the study, hot-spot users were divided into three groups: business subscribers, broadband subscribers and ad hoc users. The report claims that the market will only progress when service providers have developed relevant business models to cater for the different usage habits and demands of these groups.

“The majority of early adopters are business travelers, and they will be a major part of the market for years to come. Companies with prime venues and strong enterprise focus may see some early success,” Cai said. “For the market to move beyond road warriors, however, telecom carriers have to bundle hot spots with their other communications services and provide continuous support for this market.”