A report by BroadGroup, a London consultancy, reveals that WiFi tariff categories in 20 European and Eastern-Europe countries are converging on standardised products, and that competition emerging from North American entrants is having an impact.
The report, WiFi Tariffs Europe, dissects service tariff categories offered by 97 providers, and finds that prices have shifted as a result of consolidation, and may shift more in response to North American competition. Tariffs remain geared for corporate users.
The average price for one-hour connectivity via public access WLANs in Europe is 6.47 euro (less taxes). Most pricing categories are prepaid.
"Retail prices for public WiFi in Europe remain quite high although there is some evidence of slight overall decline," comments Philip Low, managing consultant at BroadGroup and report author.
Not so hot
The report reveals that around 71% of hotspots reside in only five countries in Europe. "Europe and Eastern Europe combined have a lower hotspot population than South Korea," comments Low.
Service providers are still experimenting with tariff categories. "Despite apparently unsustainable pricing by some WISPs [wireless Internet service providers], there is an increased focus on standardised products, suggesting that market is already moving towards commoditised products. There is also evidence that the drive for subscription-based businesses and repeat revenues has led to an increase in certain tariff categories."
The report identifies a clear relationship between pricing and deployment. It believes the degree of pressure on prices in Europe over 2004 will relate to the number of hotspots deployed, as well as the ability of service providers and aggregators to secure further roaming agreements.
"Conversely, this scenario also suggests that consolidation pressures will mount and some SPs will find their models unsustainable. Deployment also impacts the opportunity for a wholesale market to grow and with it a potential reduction in price levels, and development of consumer propositions."
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