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Pricing and Marketing Wireless Hotspots

18th February 2003

BroadGroup, the London-based consultancy, revealed today that analysis conducted for a new report suggests that pricing for public access wireless LANs reveals sharp divergences in approach across the US, Asia and Europe.

The report, Pricing and Marketing Wireless Hotspots, has assessed and interpreted marketing and pricing strategies across Europe, North America and Asia Pacific, covering fifty players in 21 countries, and over one hundred and thirty pricing schemes.

"A key finding of the report is a marked difference in the approach to strategic pricing in the emerging hotspot sector," commented Philip Low, managing consultant at the group, "and provides an early indication of how business models will evolve, and which of them will be sustainable in the longer term".

The research suggests that pricing is indelibly linked to long term success in the emergent hotspot market, and reflects not only the strategic positioning of service providers relative to their perceived target market, but more fundamentally, characterises the orientation of the service provider who are currently tending to adopt either a "mobile", "location" or "Internet subscription" type pricing model.

Germany, Austria and the Nordic countries were found to be the most developed in terms of hotspot deployment but collectively Europe represents less than 12% of the global total number of hotspots, although the very high number of hotspots in Korea biases this outcome.

Overall, the pricing survey found that Europe is the most expensive region in the world for public access wireless LANs. Monthly subscription pricing schemes are offered by 37% of service providers surveyed in the report, with European prices for this category averaging US$62 per month, compared to US$39 in the US, US$16 in Asia and US$41 globally.

The most popular scheme - 24 hour pricing - offered by almost 40% of all service providers covered, and predominantly European, averages US$ 14.39. The cheapest provider in Europe is defaultcity in Sweden at only US$3.40. Few providers in Asia offer 24-hour pricing suggesting many are missing out on the opportunities for travellers and business visitors at airports and hotels.

"Prices will probably become clearer and more tiered over the next twelve months as competition intensifies. At present customers are primarily business early adopters and deployment will play a key role as take-up extends to the wider business community and beyond".

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