Where’s the money in WiFi?

 Sean O’Mahony can tell you to the penny how much revenue FatPort Corp., the wireless Internet service provider he heads, is pulling in for the day. At 11 a.m. Eastern Time Tuesday, it totalled $126.13.

To be fair, that

covered people who were on “”pay for use”” only, not those on a monthly fee program.

But it proved O’Mahoney’s point. “”The one question people ask me is, ‘Where’s the money in Wi-Fi?’ Well, there isn’t any.””

Not yet. In fact, according to IDC Canada Ltd., revenues for Wi-Fi hotspots in cafes, hotels and other public places will hit a mere $50 million by 2005.

Still, O’Mahony and others who spoke at an Intel-sponsored roundtable Tuesday were optimistic about the future of hotspots and believe it will lead to increased Wi-Fi use in corporations and homes.

“”People like it and are willing to pay for it,”” O’Mahony said of the hotspot concept.

However, pricing is still a question. He noted that earlier this year, when FatPort cut its fees in half, usage doubled.

Vancouver-based FatPort has 2,300 subscribers and 85 locations across the country. That will hit 200 by the end of the year, he said. Spotnik Mobile Inc., financed by Telus Corp., has 75 locations installed and 290 signed up, mainly in the Toronto area. IDC Canada estimates there will be 1,200 around the country by the end of 2004.

“”We think we’re getting close to critical mass to having something people demand,”” Spotnik CEO Murray McCaig told the seminar.

However, he and others cautioned that Wi-Fi usage will take off only when corporations feel wireless local area networks are secure and major telephone carriers and Internet service providers back the hotspot concept.

“”Until the enterprises start to sign on to the service and roll this out to their mobile work forces, we’re not going to see huge adoption numbers,”” McCaig said.

Asked to explain WLAN security best practices, Intel Canada manager Doug Cooper insisted Wi-Fi security is no longer an issue, but getting acceptable testing standards by corporate users is a problem.

Both FatPort and Spotnik are expanding their business models. McCaig said in an interview that his company will announce shortly that it will only be selling service through Internet service providers and stop trying to sign up locations itself.

O’Mahony said one key to increasing adoption is offering an “”all you can eat”” service through a provider so the user will only be billed once for wireless. To that end, FatPort will soon announce a deal with a cellular provider to sell a laptop wireless card with both Wi-Fi and high-speed cell access and unlimited monthly use. The company hasn’t yet set the monthly fee.

Comment: info@itbusiness.ca

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including ITBusiness.ca. Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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