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NYT: Making Free Wireless Wi-Fi Internet Pay

Posted by timothy on from the aye-there's-the-rub dept.

securitas writes "The New York Times' Matt Richtel writes about the the challenges of finding a sustainable business model for 802.11 Wi-Fi wireless Internet. The problem for entrepreneurs, telecom companies and others is that the proliferation of free wireless access hotspots at the municipal and grassroots level has obviated commercial carriers' revenue and profit models in many cases. One user quoted in the story sums up the attitude of many wireless users: 'The Internet is free here.... Why would I pay?' IHT, published by the New York Times in Paris, is carrying an abbreviated version of the story."

1 of 152 comments (clear)

  1. why people will pay by mandalayx · · Score: 5, Informative

    Many reasons. For example, a whole lot of information is free, but many people pay for information.

    *Reliability - Someone guarantees that it's going to be there for you.
    *Convenience - More hot spots. Less time configuring. Paid services are often suited towards the mainstream user--one who might be scared of the prospect of finding hotspots.
    *Speed - Don't these free hotspots get bogged down and/or are throttled?
    *Security - I actually don't know a single thing about this, someone please help me out on this one.

    Obviously you're not going to get everyone to pay, but that's okay. Not only are there those who don't mind paying, remember that there are plenty of places still left with non free WiFi. (I'm talking about people who intentionally leave their AP open)

    Just because something is free doesn't mean that it's bad. The failing businesses just didn't do their homework on the market. I was disapointed, though, to see a leading pay WiFi provider spread this piece of FUD:

    Mr. Sims said he is not worried about the growth in free hot spots because he believes commercial networks can offer more reliable, more secure Internet access. Free service is fine for casual and periodic use, he said, but "when you absolutely, positively have to get that report downloaded or get access to your company system to conduct business, free probably isn't going to cut it."

    Even if that statement is completely false, it will probably hit a chord in that Reliability bullet point above for the "mainstream" user.

    I'm not sure that this is a "Tech" story as much as a Business story. The article's basic thesis is that the opportunity for pay WiFi businesses is getting dimmer. That's a message to short the stock of some of these guys or to not go and do my own version of T-Mobile Hotspot.

    I think there are some (smaller) opportunities left, though, so I'm interested to hear what kind of niche businesses slashdot readers are profiting from. Final quote, which predicts the commodititization of WiFi:

    While Wi-Fi "offers a revenue generating opportunity," he said, "it's real benefit to SBC is as a customer retention and acquisition tool."

    Sounds quite a bit like what that Sun guy said about hardware last week.