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WiFi Hotspots to Cost Wireless Carriers $12B

j.e. writes "Commercial WiFi hotspots and open WiFi networks will take about $12 billion out of wireless carrier revenue pie, says Starategy Analytics. With high prices of mobile data services from wireless carriers, the users are more prone to use a cheap WiFi connection, if one is available."

45 of 222 comments (clear)

  1. In other news by Danimoth · · Score: 5, Funny

    things cost money...

    --
    No smoking sigs indoors.
    1. Re:In other news by White+Roses · · Score: 4, Insightful

      In other other news, when given a choice between otherwise highly similar products, consumers will choose to pay less money . . .

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    2. Re:In other news by iggymanz · · Score: 3, Insightful

      in other news, ISPs are paid money by people who provide free wi-fi

    3. Re:In other news by EvilTwinSkippy · · Score: 5, Insightful

      Tap water costs the bottled water industry billions.

      --
      "Learning is not compulsory... neither is survival."
      --Dr.W.Edwards Deming
    4. Re:In other news by hhawk · · Score: 3, Insightful

      And free air, even the dirty air in our big cities takes probably 500 Billion if not more a year away from the Bottled Air business; there is one.. its just not large.

      That they dont' tell you also, is that data used to be part of my Sprint Plan. Someone they removed it and now want to charge for data; I used 14.4 on Amtrack with my laptop to sync email in 2000; now they have fast speed and they want much more $$$.

      Any serious business user is going to buy a business grade service. Meaning they are using it to make $$$ or the inverse, without it they loss sales, jobs, etc. Everything one else doesn't have a real need and yes, they are NOT going to pay huge sums for it.

      --
      http://www.hawknest.com/
    5. Re:In other news by caswelmo · · Score: 2, Insightful

      Or perhaps... "Small businesses entice customers with free WiFi and see $12B in increased revenue."

    6. Re:In other news by drooling-dog · · Score: 5, Funny
      when given a choice between otherwise highly similar products, consumers will choose to pay less money

      Obviously said by someone who hasn't met my girlfriend...

  2. Having used Cingular's EDGE plan. by Eunuch · · Score: 4, Interesting

    I used the EDGE from Cingular wireless data plan. $80 (0x50 dollars) a month! It worked decent but the worst part was the latency. I was getting 1-2 second latencies. Do not try to game with it at all. Yet I'd still like a single everywhere-network rather than dealing with lots of accounts with various wi-fi hotspots. If they could just get the latency down and improve reception (if your cell is showing half power don't even bother with trying data).

    --
    Transcend Humanity. Please.
    1. Re:Having used Cingular's EDGE plan. by Anonymous Coward · · Score: 2, Informative

      Haven't tried edge myself but (working for an opco) we have been a bit embarrassed by the latency of GPRS....typically around 800ms, sometimes worse. Also true as you say that you want a good signal level. With the data cards we sell we include an external antennae as the results with the one built into the card are not wonderful

      The good news is that we are seeing much reduced latency with 3G, down to about 200ms. OK, that is still not wonderful compared to a good broadband connection, but is a big improvement.

      But as another response indicates, there are going to be limits to how low we (or rather our suppliers) can get the latency.

  3. Statistics Bullshit by Oculus+Habent · · Score: 5, Insightful

    This sounds like crap statistics if I've ever heard them. Cost $12 billion is a little different than "Won't make $12 billion because the services are overpriced."

    --
    That what was all this school was for... to teach us how to solve our own problems. -- janeowit
    1. Re:Statistics Bullshit by raitchison · · Score: 3, Informative

      Exactly what I was thinking. When I read the headline I was imaginging that cellular data use was way more popular than I imagined and that WiFi hotspots are eating into that side of the business.

      Just because the wireless carriers projected ridiculous revenue from their own WiFi hotspots that they won't make doesn't mean the carriers are "losing" anything since they never had the money in the first place.

      I have a suggestion for the wireless carriers to "regain" some of the money they never had to begin with. Charge competitive rates for your WiFi services and you will get more of that business.

  4. An analogy by DamienMcKenna · · Score: 4, Insightful

    "With all these free radio stations people won't buy our records."

    "With all these free movies on TV people won't go to the movies."

    Having said that, cellphone service is nowhere near what it should be in terms of reliability and quality. How many of the main carriers allow you to do what you want with your phone (e.g. bluetooth restrictions in many phones) and your service (forward messages & voicemail via email, etc)?

    Damien

    1. Re:An analogy by rjelks · · Score: 2, Funny

      I'm actually posting from my cellphone right now. You can't get much more reliab....[NO CARRIER]

    2. Re:An analogy by linuxtelephony · · Score: 3, Informative

      And what is worse, the effective usability of cell phones is now WORSE than what they were just 4 to 6 years ago.

      Yes, things were still mostly analog, with a few early adopters having digital, but for roaming your analog service was virtually seamless, especially along major interstates.

      I recently drove west along I-10 with a digital phone, and spent literally hours where I could not get a call out. Yes it was in some of the "mountain" areas, but it was an area that used to have analog coverage that worked (because I drove it and know).

      It really infuriates me what they've done. I spent several years building cellular (analog) networks, even in some mountain areas. I know the service is possible in these areas, but since the "new and improved" digital phones include the ability to restrict what services the phones may roam on (and in some cases, the newer phones won't even do analog), we've gone BACKWARDS. It's pathetic!

      --
      . 62,400 repetitions make one truth -- Brave New World, Aldous Huxley
  5. Just so you know.. by Prophetic_Truth · · Score: 3, Insightful

    97.576% of all statistics are inaccurate.

    --
    time is a perception of a being's consciousness
    time is your 6th sense, the wierd ones are 7+
    1. Re:Just so you know.. by malcomvetter · · Score: 3, Funny

      And 33.23456% are made up right there on the spot.

    2. Re:Just so you know.. by c666hellchild · · Score: 3, Funny

      And 74.3572% are made up on the spot

      --
      -Peace
    3. Re:Just so you know.. by Tackhead · · Score: 2, Informative
      > > > > > 97.576% of all statistics are inaccurate.
      > > > > And 33.23456% are made up right there on the spot.
      > > > And 74.3572% are made up on the spot
      > > ... And apparently most statistics carry a margin of error of approximately 41.12264%
      > I'm not sure your figure is precisely correct.

      ...and nevertheless, 100% of us have a better grasp of business reality than the deluded wankburger who claimed with straight face that WiFi hotspots were responsible for a ($12,000,000,000) entry on his employer's balance sheet. What a horrible existence - to be delusional (even by phone company standards), without any of the mind candy of psychopathy and megalomania that come with being part of RIAA or MPAA respectively.

  6. Boo Hoo by jgerry · · Score: 4, Insightful

    Get a better business model. Or better yet, just go away. Just because people want something, doesn't mean they have to pay YOU to get it. More and more, they may not have to pay at all (open WiFi access points, Linux, etc).

  7. Making up numbers is fun! by Superfreaker · · Score: 3, Funny

    $12 billion out of wireless carrier revenue pie, says Starategy Analytics


    Reading /. has cost my company $101 gabozillion dollars in lost productivity!

  8. Don't think so by DustyShadow · · Score: 4, Interesting

    I won't buy wireless service from a provider and this has nothing to do with wi-fi hotspots. I've never even used a wi-fi hotspot. The main reason that I won't buy wireless service from a provider is because of the insane price. I'm sure most people are in my boat.

  9. WiFi Hotspots to Cost Wireless Carriers $12B by stendec · · Score: 4, Funny
    WiFi Hotspots to Cost Wireless Carriers $12B

    They shouldn't have bought all those hotspots if they're going to complain about the price! It's amazing how stupid some people can be.

  10. This is step 1 by ENOENT · · Score: 5, Insightful

    Step 2 is getting laws against free WiFi accessed passed in Congress.

    Hey, it worked for the RIAA!!!

    --
    That's "Mr. Soulless Automaton" to you, Bub.
  11. I thought the Airwaves were a Public Trust? by CygnusXII · · Score: 3, Insightful

    I thought the FCC gaurded the airwaves and held them in trust, for the American people? Does Joe and Sally Citizen need for the FCC to auction off the Bandwidth to the highest bidder? I think not. The sad part is all the hobbiest that are gonna get screwed, when the bandwidth they propogate is wanted for some other new technology. All this is is a sign that Joe and Sally Citizen are willing to do some grass roots, initiative type activities and spread the Bandwidth around.Screw the MAN!! so to speak, and for once utilize what is rightfully theirs. I understand that not all WiFi spots are opened purposfully and meant for use, but you cannot say that all of them are not meant to be so, either. I check for available spots before I go on any trips, and I keep Netstumbler and a few other tools with me always.

    --
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  12. wireless overpriced by dslbrian · · Score: 5, Insightful

    Poster forgot some words, it should read:

    With the artificially inflated exorbitantly high prices of mobile data services from wireless carriers, the users are more prone to use a cheap WiFi connection, if one is available.

    No sympathy for wireless carriers here, now they get to suffer for their own bad pricing plans...

    1. Re:wireless overpriced by Glonoinha · · Score: 3, Informative

      Bingo. I looked into data services on my GSM phone.

      They wanted three cents per kilobtye.
      That's $30 a Meg - are those motherfuckers crazy?

      Download one really good porn avi or mpg and you are talking about $20,000. For $20,000 you should have dozens of real live women delivered to wherever you happen to be using your cell phone, lubed up and ready for sex.

      --
      Glonoinha the MebiByte Slayer
  13. headline should read... by sootman · · Score: 4, Insightful

    "Wireless carriers will not earn $12B because better options exist."

    Note: you can't lose what you don't yet have.

    Interesting fact: you are not entitled to a profit. If your business model sucks, or if your product is too costly, it will fail. See also: airphones. Remember them? All gone now, because using cell phones (which everyone already has) before and after the flight is good enough.

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  14. In other news by LiquidCoooled · · Score: 2, Funny

    In other news, Linksys employees were seen dancing in the streets.

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    liqbase :: faster than paper
  15. *vroom* by Willow_mt · · Score: 5, Funny

    I'm getting the sudden urge to go wardriving...

  16. Outside the US by Datasage · · Score: 4, Informative

    There are some places in the world were gprs is a cheaper option to dialup. For my girlfriend in jakarta, the dialup option charges her for how much time she spends online. While she can get unlimted access via gprs for about $20-$30 per month from indosat. Other than some major latency and connection issues to a couple sites, she can get dialup speeds pretty easily.

    --
    In America we are imprisoned by our fear of them.
  17. Re:WIMAX by merreborn · · Score: 3, Interesting

    An open hotspot with WIMAX-class range would attract an awful lot of leachers in any tech-savvy neighborhood. Likeley far more than most residential broadband connections could handle.

    I doubt we'll ever see many free, open WIMAX hotspots. Open WiFi hotspots only really work because the limited range effectively limits the number of people that can leach any such connection to a handful.

  18. What about me? by tyler_larson · · Score: 5, Funny

    I've already lost trillions on my canned-air venture this year alone. I figured that, as vital as breathing air is, people would be willing to pay my reasonable rate of $200 per cubic foot.

    Apparently there's a free alternative that people are taking advantage of, driving my company out of business. How can I undersell free? Better label those free-breathers out there as "air pirates" and start a "get the facts" campaign about the total-cost-of-breathing.

    --
    "With sufficient thrust, pigs fly just fine. However, this is not necessarily a good idea...."
    RFC 1925
    1. Re:What about me? by MAdMaxOr · · Score: 5, Funny

      1/2 liter per breath
      = 0.017657 cu. ft. / breath
      = $3.5314 / breath
      = $42.4 / person /minute
      = $22,273,246 person / year
      = $1.56 * 10^17 / planet / year

      Looks like you lost about 156 quadrillion dollars!

  19. Re:Boo hoo! by sr180 · · Score: 2, Informative
    No, you look at how much traffic is now going through the cheaper or free wireless network, and then work out how much it would cost if it was going through your expensive and overpriced wireless carrier. That is how much money you are losing.

    Obviously completely incorrect because people will use it A LOT at the lower price, and almost NOT AT ALL at the higher price. Smells like RIAA and MPAA maths to me.

    --
    In Soviet Russia the insensitive clod is YOU!
  20. Why buy when you can WiFi? by Anonymous Coward · · Score: 3, Insightful

    Having watched many MANY people gleefully tout their new "connected" "enabled" or otherwise crappified phone only to be disappointed by the utter lack of basic service requirements like convenience, reliability, ease-of-use, I can assure you the only thing that's costing them $12B is their lack of those three and a failure to understand what people really want. They want it all and they want it now and they want it free. WIth the proliferation of WiFi hotspots, they can get it... so... you can't sell snow to eskimos... whatever.

    Besides it doesn't COST you $12B when you haven't spent $12B. duh!

    I know. run-on. bad punctuation, but hey, you didn't pay to read this!

  21. Moderate Insightful by Blackbrain · · Score: 5, Insightful

    This should be +5 insightful, not funny. It is only a matter of time before some "media friendly" senator attaches a rider to an education package that bans open WiFi access. Or more likely, a Homeland Security bill because Terroists might use open WiFi links in an attack.

    --
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    1. Re:Moderate Insightful by Vitriol+Angst · · Score: 2, Insightful

      It is pretty sad when a statement like "free wi-fi costs company $12 Billion" is even a headline" Think about the logic for a second. It's like saying "free air breathers cost oxygen tank manufacturers".

      The wireless companies may or may not be charging too much--I couldn't guess at what the overhead is to start up the network. But the real problem is that we have been taught a psychology that companies have any rights at all. If a company does not provide utility, then it should fail in the market. I've made this comment before about the music labels. Through PR and the courts they are trying to prevent obsolescence. If artists can get paid and music is free, then what exactly is wrong with that for the consumer? Will music get worse than it is now? Will concerts end? No, no and no. Companies have to provide a service. They can't say that citizens finding cheaper and better options is unlawful.

      But, I suspect the company to push for legislation to solve the issue, rather than face an actual open marketplace.

      --
      >>"ad space available -- low rates!!!"
  22. Misleading title by argent · · Score: 5, Insightful

    Should read, "WiFi to save wireless users $12B", or "WiFi to get up to $12B slice of wireless pie".

    Not making as much revenue as predicted is not a "cost".

  23. They have this backwards. by hal2814 · · Score: 2, Insightful

    Lack of decent bandwidth and latency issues are costing wireless plans billions. WiFi's not the best thing on earth, but it sure beats the wireless broadband provided by Verizon. That money didn't belong to wireless providers to begin with. Another alternative could be that lack of hotspots costing WiFi programs billions since users are stuck with wireless in that case.

  24. WIFI from the bottom up? by Raindeer · · Score: 2, Interesting

    Whenever I hear discussions on Wifi hotspots I get the idea that we're building wifi connections the wrong way round. We're building wifi on the open road, that sometimes reaches into our houses/businesses. We could do it from the bottom up, based on the wifi access points in peoples houses.

    How hard would a standard be, which would make it possible to extend the official network of the ISP to a users access point, maybe with a VLAN solution. This way if I open up my laptop and there is an access point available of Joe User, I can only hook up to it by propperly logging in to the ISP's network or use the airport/credit card system. This will require many roaming agreements etc, but it would bring security and convenience at the same time. It should be done in such a way that the person opening up his network in this way can throttle the speed of the guest users and/or the times they can access. So I would like to see a rule like "Guests can only connect when I am not connecting" or "Guests only get 1mbit"

  25. Aw jeez, it's the RIAA all over again by serutan · · Score: 4, Insightful

    I'll believe wireless carriers lose $12 billion when I see their gross revenue actually drop by $12 billion. As our massive experience with file downloads and other things has shown, many if not most of the people who use a free service either wouldn't use it if it weren't free, or are already paying for the same service from someone else anyway.

    I wish wireless carriers and others would grow up and quit whining when people figure out that their products and services can be had for free.

  26. These are just market forces in action... by nickfrommaryland · · Score: 2, Insightful
    Let's face it, WiFi technology is still in it's infancy. When new technologies come to market, two things happen:
    1. The suppliers of a technology will try to make as much money as possible from the technology.
    2. The consumer of the technology will try and get the technology for as little as possible.

    Take the T-Mobile hotspot, for example. If you plan on using it a lot (and that's a lot of time spent at Starbucks), you can get away with spending a mere $29.99 a month. If you're not so sure, the price jumps to $39.00 a month, but you're free to quit. The price will jump even higher if you move to a per day or per hour plan.

    Now take many local public venues (e.g. libraries, coffee houses, etc.) Many of these places will offer free access for their patrons. We have become quite spoiled by these free hotspots (I know I have, and I will prefer one of these places any time).

    If there are more and more of these public access points offered, we will find more and more that, because of competition and free market forces, the price of WiFi access will plummit, possibly to near-zero. We (the consumer) just need to keep at it. If the technology is not profitable for businesses, wifi may become relegated to the realm of "promotional offer" or "advertising gimmick."

  27. "WiFi Hotspots to Save Wireless Users $12B" by ewg · · Score: 2, Insightful

    It's all a matter of perspective.

    The casino gaming industry talks about its "earnings", not "winnings", or heaven forbid, its customers' "losses".

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  28. To Find These Hotspots by Anonymous Coward · · Score: 2, Informative

    This reminds me of a very cool hotspot search engine. Dowza. It lists free and paid hotspots with map, Google ads only.

  29. Misleading Title by tom's+a-cold · · Score: 4, Informative

    I spent $10 on a bottle of wine. So should the headline read "Wine purchase costs banana growers $10"?

    It's the same logic the RIAA and MPAA use, and it's fallacious.

    It's not their money. It's not being taken from them. It's not costing them shit. It's just diverting money they think should be theirs to other, more worthwhile. uses. But there's no real evidence that it ever would have been spent on what they have to sell, rather than saved, or spent on any other thing in the world that can be bought.

    These people's sense of entitlement to what they haven't earned is sickening. Bunch of corporate welfare scroungers. Next they'll go whining for the government to seize the money for them.

    --
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