Wireless Hotspots Could Impact ISPs
Monday, March 19th, 2007
By George Leong, B.Comm. for Profit Confidential
Several times each week, I venture out to my local hotspot where I can gain Internet access via my laptop’s wireless network card. There’s a trend developing that could ultimately impact current providers of Internet services such as AOL, EarthLink, and others.
I remember back in the early 1990s when the Internet started gaining popularity. People used to surf the Net via dial-up, which was often slow and cumbersome, given the size of some of the data transfers. And while dial-up is still used by many Internet users, it is quickly becoming archaic. Today’s file types, including online video and other streaming medias, require faster connections. This is achieved via high-speed broadband services.
Now there is a rapidly growing trend that’s leaning toward wireless Internet connections, which is making surfing the Net via easy portability more mainstream. We are seeing the development of wireless hotpots engulf not only coffee shops and other establishments, but we are also seeing the establishment of wide- scale wireless networks that are spanning across major areas in large cities. For the consumer, this means added portability and the ability to access the Internet more often. For those individuals who are working in jobs that are mainly out of office, this emerging trend of wireless networks makes sense.
Major U.S. cities such as Philadelphia, Houston, and New Orleans are already offering free wireless access to anybody with a wireless network card. Each day, we are seeing more and more free Wi-Fi access across the nation.
According to Jupiter Research, in its report “Public Wi-Fi: Capturing Paying Customers in an Increasingly Competitive Space,” 58% of consumers will use hotpots only when they are free of charge. Also, the adoption of public Wi-Fi surged from 14% to 20% from 2004 to 2005. The report also suggested that Wi- Fi service providers should try to attract mobile professionals and home wireless network owners.
This report should be a real concern for those companies in the Internet Service Provider (ISP) area. The reality is that consumers are going to demand more portability via wireless hotpots. And as cities develop wide hotspot coverage, this will impact dial up and even high-speed, at-home services. In cities where access is free or cheap, the major ISPs such as AOL and EarthLink will be hurt.
I, for one, am looking forward to the day when I can surf anywhere in the city at a low cost that’s relative to what I’m currently paying out each month for my at-home service.
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George is a Senior Editor at Lombardi Financial, and has been involved in analyzing the stock markets for two decades where he employs both fundamental and technical analysis. His overall market timing and trading knowledge is extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi’s popular financial newsletters, including The China Letter, Special Situations, and Obscene Profits, among others. His trading advice on stocks and options is also found on his daily trading site, Daily Profits. He has written technical and fundamental columns for numerous stock market news web sites, and he is the author of Quick Wealth Options Strategy and Mastering 7 Proven Options Strategies. Prior to starting with Lombardi Financial, George was employed as a financial analyst with Globe Information Services.
