Wi-Fi has seen its share of success and failures. Coined by a group of manufacturers in 1999, Wi-Fi has since been praised as a tremendous...
Wi-Fi has seen its share of success and failures.
Coined by a group of manufacturers in 1999, Wi-Fi has since been praised as a tremendous opportunity and criticized for not generating revenue.
But as a number of major pieces fall into place, including a broader mix of users accessing the technology, it appears Wi-Fi is entering a new stage of its life.
Take the T-Mobile HotSpot division of Bellevue-based T-Mobile USA, which has been providing wireless Internet at thousands of locations, including Starbucks, since 2002.
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The company plans to disclose some key performance data Monday, giving a rare inside look at both T-Mobile HotSpot and the broader industry.
In addition, the company is announcing roaming Wi-Fi relationships with other carriers that will bring the number of hotspots accessible by T-Mobile customers from 12,000 to 25,000 worldwide. In the U.S, the number will grow from almost 6,000 to 6,500, including access points at hotels, airports and other locations worldwide.
T-Mobile first got into the Wi-Fi business in 2002, when it was still known as VoiceStream Wireless. The wireless carrier purchased bankrupt MobileStar, a Wi-Fi provider, and the chief executive at the time, John Stanton, gained much attention for promising to spend “hundreds of millions of dollars” on more locations.
VoiceStream was purchased the year before by German telecommunications company Deutsche Telekom and became the U.S. unit of DT’s T-Mobile International wireless division. In the years since, the Wi-Fi operation has expanded to provide hotspots at FedEx Kinko’s, Borders cafes, airline frequent-flyer clubs and hotels, Hyatt hotels and Red Roof Inns.
Today, 300 of T-Mobile USA’s 24,000 employees work at T-Mobile HotSpot in Bellevue and Dallas.
The business is headed in a positive direction, said Joe Sims, T-Mobile’s vice president and general manager.
Here are some key statistics T-Mobile is releasing Monday:
• Since launching in 2002, there have been a total of 15 million sessions at T-Mobile hotspots. Of those, more than half, or 8 million sessions occurred last year, 3 million in the past 90 days, and 1 million in the past month.
• In the past month, there were 450,000 active, paying customers.
• Sessions have grown from an average of 23 minutes in 2003 to 45 minutes in 2004 and to 64 minutes in May.
“You can see the trend and the growth that’s occurring here. Customers are using us more often, more frequently and for longer periods of time,” Sims said.
Julie Ask, lead wireless analyst at Jupiter Research, said Wi-Fi has grown because of a number of factors, including the statistic that nearly 100 percent of laptops shipped today come with Wi-Fi chips.
“The awareness is up, there are more devices out there; the setup has become easier; and more people are comfortable with the security,” she said. Despite the uptick, the numbers are still low. Ask said that according to her most recent data, only 15 percent of people who have been online have accessed a public hotspot. The number of people who paid for that access is even smaller and the number of monthly or annual subscribers is smaller still.
That represents a positive start for T-Mobile, Ask said.
“They are building the market while educating the consumer,” she said. “It’s not an easy place to be. They are doing all right.”
But T-Mobile is far from dominating the market. Not only are there other major Wi-Fi providers, including Wayport and Boingo, but also free hotspots and numerous technologies provide competition. And municipalities across the nation are looking at options to provide citywide Wi-Fi free or at reduced prices.
Other major cellphone carriers have Wi-Fi efforts, but one giant, Verizon Wireless, recently decided to abandon that operation and focus instead on wireless broadband through third-generation cellular technology, called 3G. T-Mobile USA’s strategy has been to pursue Wi-Fi over 3G; it isn’t expected to have the latter until 2007 or 2008.
T-Mobile sells Wi-Fi through a variety of plans, including $6 for one hour of access, $9 for a day pass and $29.99 a month for unlimited national usage. It offers discounts to those who also have T-Mobile cellular voice plans (about 40 percent of Wi-Fi subscribers also have voice plans).
Sims said growth will come as more people use the service, and as T-Mobile adds hotspots. Today’s announcement means T-Mobile customers will be able to use Wi-Fi for discounted rates at 39 more airports (for a total of 72) and 525 hotels, including Marriott, Hilton, Ritz-Carlton, Doubletree and Renaissance.
The company is also expanding its roaming relationships with the Wireless Broadband Alliance, which has partners in France, Switzerland, Portugal and the Philippines. In all, T-Mobile customers will have access to 12,200 T-Mobile HotSpot locations worldwide and more than 13,000 international roaming relationships.
“These aren’t small Wi-Fi providers,” Sims said. “These are global carriers in each one of these countries that are doing the same thing we are doing.”
Sims said Wi-Fi is following a similar path as the cellular industry when it comes to roaming.
He said in the early days of cellphones, he had three phones — one for home, one for U.S. travel and the third for trips abroad. When he left any of those areas, he was charged a roaming fee.
“Now, roaming is included,” he said. “We are in second phase with Wi-Fi. People are just starting to get comfortable with having one account. The T-Mobile account can be used… for a small roaming fee for the convenience.”
Tricia Duryee: 206-464-3283 or email@example.com