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03/12/2008In Europe, Trains and Restaurants Drive Wi-Fi Growth
iPass's semi-annual survey of mobile broadband users has just been released, and it is full of fascinating details: "The second half of 2007 saw another strong performance for Wi-Fi, as hotspot usage by business users increased 89% over H2 2006. Based on data gathered from over two million sessions during the period, the Index again demonstrated European growth rapidly outpacing the US, with Europe expanding its worldwide share of hotspot use to 40%, up from 31%, as America's representation dropped from 59% to 51%. Also, London increased its lead as the world capital of Wi-Fi with usage rising by 156% over the same time period last year... Usage at train stations mushroomed 238% year over year and new deployments on the trains themselves will likely continue this growth..." iPASS GLOBAL WI-FI HOTSPOT ANALYSIS
(July-December 2007) | | REGION | Annual growth rate | % of worldwide total | | EUROPE | 142% | 40% | | LATIN AMERICA | 133% | 1% | | Rest of World | 93% | 1% | | ASIA-PACIFIC | 77%
| 7%
| | NORTH AMERICA | 61% | 51% |
Train travel is part of the European lifestyle. Over 540 billion passenger-kilometres were logged last year, according to the International Union of Railways, and this figure will grow much larger if the EC implements its announced goal of cutting greenhouse gas emissions 20% by the year 2020. That is because passengers on trains generate 42% less CO2 per km than those who travel by car and 71% less than air travellers. Free Wi-Fi is already a reason some people take trains instead of other means of transport. A few railroads in Asia and North America offer similar services, but as Eric Pfanner wrote in the International Herald Tribune last month, "So far, Wi-Fi on trains seems to be a mostly European phenomenon." Still, that could change as other regions shrink their carbon "footprint." Of course, when in-flight Wi-Fi also spreads - as it certainly will - trains will have to find a newer incentive - WiMAX, for example. Another eye-catching detail from iPass's Mobile Broadband Index is that hotspot growth "in restaurants was up 217% year over year, versus only 35% growth for cafes and 26% in bookstores...." That may have to do with the discovery that, in addition to attracting customers, Wi-Fi is a boon to waiters. We saw this for ourselves in Stuttgart last year, when a waiter came to our table and took our order using a handheld tablet, logging our choices with a stylus on his touchscreen. The chef got our order wirelessly and immediately, without the waiter having to walk all the way back to the kitchen. At the end of our meal, the waiter's tablet verified our credit card and printed out an itemized receipt. So efficient! In the same way that cities discovered the benefits of mobile connectivity for their own employees when they built "hot zones" for their citizens, restaurants are realizing the usefulness of what was initially seen as just an amenity for customers. The next step is a Wi-Fi-enabled touch-sensitive screen at every table, so you don't have to wait for the waiter to take your order. Reuters reports that such "e-menus" boost sales by about 11 percent, as they encourage impulsive ordering. They can also entertain diners with on-screen games and reading matter while waiting for the food. iPass's analysis appeared right after Johan Bergendahl (LM Ericsson Telephone's chief marketing officer) said, in a widely quoted speech in Stockholm: "Hot spots at places like Starbucks are becoming the telephone boxes of the broadband era." Soon to be made obsolete by HSPA, he claimed — in the same way that pay toilets are getting so popular that people want to have them in their homes, too. Yeah, right. comScore's new survey of mobile broadband in the US, which also came out recently, corrects that view: subscription based mobile data services may be growing fast, but mainly among the very affluent, who use it when they must, for work. "At this early stage of mobile broadband, usage appears to be more a function of 'need' than 'want'," comScore concluded. The obscene prices that Europe's mobile carriers now charge for international data roaming guarantee that 3G will never kill off - or even seriously compete with - Wi-Fi in public spaces. Information Society and Media Commissioner Viviane Reding boosted her unpopularity with the carriers last month by threatening them with price regulation for data roaming, as she had done earlier with voice roaming. But she's only trying to save them from themselves. In a blog-entry titled "Wi-Fi Hotspot Irrelevance: Give Me Whatever Ericsson's CMO Is Smoking," Glenn Fleishman patiently explained that "operators that run 3G networks can benefit directly from Wi-Fi networks. Until 4G networks are built, Wi-Fi’s local network speed and its typical backhaul speed will far outpace what cellular can deliver, and occupying cellular frequencies with big downloads is a poor use of scarce frequency over which other revenue can be better extracted." Sometimes it takes an outside observer to say what should have been obvious to industry leaders. 
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