- Email: [email protected]
The expansion of hotspots in Belgium
Technology in Society 27 (2005) 243–250 www.elsevier.com/locate/techsoc
The expansion of hotspots in Belgium Pascale Vandepeutte* University of Mons-Hainaut, Warocque Research Center, Place Warocque 17, B7000 Mons, Belgium
Abstract Thousands of hotspots have appeared worldwide in the last few years. This paper briefly describes wireless technologies, 802.11 protocols, and various security issues. The varied and changing business models for hotspots are studied. Belgium’s wireless market, which is experiencing a widespread demand for hotspots, is examined. Despite a high rate of coverage, Internet users are less numerous in Belgium than in neighboring countries, so it is natural that the adoption of wireless services is also slower. Belgium’s wireless market is dominated by telecom operators. Given that the present and continuing goal of all market players is to acquire the best locations, it is simply too early to identify the most effective business models. q 2005 Elsevier Ltd. All rights reserved. Keywords: Hotspots; Wireless communication; WiFi; Business models; Belgium
1. Introduction Wireless communications are changing the way we use the Internet. Mobile phones, PDAs, and laptops are becoming part of everyday life, just as the telephone and television have been for so long. Yen and Chou [1] estimate that ‘mobile data communication is the next big industry push, and with that expectation in mind, companies are making major investments in the technology.’ Interest in this technology is great despite uncertainties about ROI and various issues like security and roaming. Thousands of so-called ‘hotspots’ have appeared worldwide during the last few years. Hotspots are public Internet access points that have been installed in high-traffic venues like airports, hotels, and cafes. Business travelers make up this market’s most lucrative
* Tel.: C32 65 373 295; fax: C32 65 373 054. E-mail address: [email protected]. 0160-791X/$ - see front matter q 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.techsoc.2005.01.008
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P. Vandepeutte / Technology in Society 27 (2005) 243–250
audience. Most currently use GPRS communication for transferring data. Developing and positioning hotspots is seen as an exciting business opportunity. Forecasts are not always consistent. Gartner estimates there will be more than 99 million WiFi (Wireless Fidelity) users by the end of 2006 [2]. But, according to Forrester [3], public LAN (PWLAN) will not be successful for businesses because laptops have a low rate of penetration-only 10% of Europeans own a laptop today, and this figure is expected to rise only to 16% by 2008. Forrester predicts that Bluetooth technology will have a greater future because by 2008, 286 million devices will be equipped with Bluetooth compared to 53 million with WiFi access. The spread of hotspots began in the US and Asia, but penetration also has been spectacular in Europe. Thus, it is interesting to study the expansion of such a new technology in Belgium, which is situated in the heart of Europe. Because of the presence of many international institutions and multinational companies, Belgium is often visited by politicians and business people. It is also a well-known destination for tourists-perhaps because one-tenth of the population is of foreign origin. In this paper, I briefly describe the technology and protocols used in hotspots, as well as the security issues that must be surmounted. Further, my examination of the hotspots market in Belgium shows that it is highly fragmented, and that the present goal of most actors in the market is still to acquire the best locations. Thus it is too early to identify the most effective business models.
2. WiFi technology and 802.11 protocols Wireless technologies include several solutions, such as Bluetooth, GPRS, and WiFi. WiFi is the specific technology that has been adopted for hotspots. The 802.11 protocols standardize various aspects of the wireless technology [4]. 802.11a, 802.11b, and 802.11 g are transport protocols. These differ by rate (802.11a-6 to 54 Mbps; 802.11b-11 Mbps; 802.11g-54 Mbps) and by compatibility (802.11 g is backward compatible with 802.11b but none are compatible with 802.11a). Connection to hotspots requires either desktops, laptops, or PDAs equipped with an 802.11-compatible device. Today, new laptops generally come equipped with chips that include an integrated wireless device such as the Intel development chip, Intelw Centrinoe [5], so they do not need a WiFi network card. The 802.11e and 802.11i protocols contain new functions. 802.11e deals with quality of service (QoS), while 802.11i handles security issues such as interception, intrusion, and unauthorized access. A recent research study by RSA Security found that more than onethird of WiFi access points in Paris and London are open [6], which means anybody with a WiFi card can access the network. Thus, owners must protect their hotspots access points through the use of security solutions, such as authentication processes, firewalls or Virtual Private Networks (VPNs), which increase users’ confidence. Present security solutions, like Wired Equivalent Privacy (WEP), are proprietary. Unfortunately, it can be easily cracked despite its 128-bit cryptographic key [7]. The recently ratified 802.11i standard is a major step toward more secure wireless access. It will provide Advanced Encryption Standard (AES) encryption, which uses the Rijndael algorithm [8] developed by two Belgian researchers, John Daemen and Vincent Rijmen.
P. Vandepeutte / Technology in Society 27 (2005) 243–250
245
Roaming, defined as the ability of a user in one mobile network to use another operator’s network transparently, is another problem. This well-known situation for mobile phones is not yet resolved. Nevertheless, partnerships are being developed primarily for international roaming.
3. Locations of hotspots Fig. 1 shows the locations of hotspots, based on the attending level and the wireless session time [9]. As expected, airports, hotels, and conference centers are places where people are most inclined to use wireless services. Business people do not like to lose time, so they utilize laptops to read and send e-mail and connect with their corporate networks. Fig. 2 shows laptop applications while traveling [10]. Broadband access is perceived by large and mid-size hotels as a necessary service offering to clients. It can be offered in guestrooms via a wired connection or in guestrooms and common areas via WiFi. Costs are estimated to be less for WiFi than for individual wired guest rooms [11]. Other venues like restaurants, cafes, train stations, gas stations, and conference rooms are other locations where installation of a PWLAN is becoming highly sought after. The number of hotspots is growing dramatically worldwide. Intel [12] references more than 43,000—50% located in the US. Large cities are particularly well-equipped: New York, London, and Vienna are among the top cities with the most hotspots [13]. Boingo is one of the companies providing wireless access in the Big Apple, and it has more than 90 hotspots located in cafes, restaurants, hotels, and convention centers. Wireless access is also provided free by some communities. For example, the Downtown Alliance in Lower Footfall Airports Events
Shopping centres
Railway stations
Conference centres Road service stations
Sports venues Holiday venues Nightclubs Universities/ Supermarkets / Colleges Dept Stores Restaurants Museums Coffee shops Libraries Cinemas
Hotels
Hospitals Time for WLAN session Fig. 1. Hotspots locations.
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P. Vandepeutte / Technology in Society 27 (2005) 243–250 100
Percentage
80 60 40 20 0 Check email
Prepare document
Log on the Internet
Log on the corporate network
Scheduling
Presentations
Entertainment
Activities
Fig. 2. Laptop activities while traveling.
Manhattan has launched hotspots in eight open spaces in parks and plazas. No log-in procedure is needed, and the service is free. The French train company, SNCF, is experimenting with WiFi on its TGV line from Paris-Bordeaux-Pau. This experiment, called ‘Clic TGV,’ is a partnership with IBM, and is limited to sending and receiving e-mail. A server onboard the train offers general and tourist information as well as films for viewing. Dell is another partner of SNCF, on the Paris-Montpellier TGV line.
4. Models of various business services With the arrival of the Internet, classical business models have been reshaped. In the case of wireless, as the market continues to emerge, business models are still not mature. Rao and Parikh [14] analyzed three wireless broadband strategies: a traditional wireless Internet service provider (WISP), a software-driven initiative, and a community-based network. They cover major concerns with bandwidth scarcity, security challenges, and technology evolution. In Germany, T-Mobile launched a PWLAN service in November 2003. It was free until the end of 2003 but is now prepaid. Pricing is V7.95 per hour or V24.95 for 24 h. Vouchers can be paid by SMS sent from mobile phones. The Canadian company RoomLinX offers wireless access to guests in hotels [15]. The hotels do not charge room guests but they do charge corporate customers for wireless access service in meeting rooms, and RoomLinX takes a percentage (usually 50%) of the meeting room access revenue. This model is compelling: the revenue obtained is higher than what is generated from fees for in-room access. RoomLinX is also negotiating a monthly fee that would enable hotels to provide 24/7 network support. In the US, I SPOT Access Networks operates free PWLAN in Iowa and Nebraska [16]. I SPOT offers different services to four types of community participants: consumers (called members) who benefit from access, affiliates and sponsors who benefit from new promotional opportunities, and network partners who generate new revenues.
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247
The airport in Nice, France offers wireless access in the departure area via six access terminals. When the service was launched, it was free. However, in the future, three options will likely be offered: a prepaid card, payment with a bank card on the portal website, and partnerships and roaming with providers [17].
5. The case of Belgium Fig. 3 shows that only 33% of the population in Belgium are Internet users, which is much less than in neighboring countries [18]. So it is natural that the adoption of wireless services is also slower there than in other countries, despite the high rate of coveragebroadband access (ADSL or cable) is available for 98% of the Belgian population [19]. Nevertheless, in 2003 one of every three computers purchased in Belgium was a notebook, and one of every three notebooks was wireless, typically supplied with the Intelw Centrinoe processor inside. Table 1 indicates the major players in Belgium and the number of active hotspots they manage. Most of these players are telecom operators. Belgacom and its affiliate, Proximus, are the major operators with the longest record of service in the field. Another operator, Telenet, recently acquired the Belgian WISP pioneer, Sinfilo. Swisscom Eurospot (created as a result of the purchases of Megabeam Networks and WLAN AG) is an European operator that targets four types of locations: airports, hotels, train stations, and convention centres. All Telecom, established in January 2000, provides broadband wireless access for the hospitality industry in France and Belgium. Between these five players, the number of hotspots stands at 665. Hotspots can be found in a variety of locations. For example, 33 Total-Fina gas stations provide WiFi access via Belgacom; 33 Carestel restaurants have been equipped by Sinfilo; Sweden Netherlands Finland Danmark Luxembourg Germany Austria United Kingdom Portugal EU15 Belgium
33
France Italy Irland Spain Greece 0
10
20
30
40
Fig. 3. Internet users per 100 inhabitants.
50
60
70
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P. Vandepeutte / Technology in Society 27 (2005) 243–250
Table 1 Major players in wireless communications in Belgium Type
Name
Number of hotspots in Belgiuma
Telecom operator Mobile phone operator Telecom operator Telecom operator Wisp
Belgacom Proximus Telenet Swisscom Eurospot All telecom
347 35 129 21 133
a
Remarks
Belgacom affiliate Acquired the Wisp Sinfilo
By the end of June 2004.
about 100 cafes run by Interbrew (the famous brewer of Stella Artois beer) are planning to provide WiFi access via Belgacom). Fifteen to 20 million passengers (66% business travelers) pass through the Brussels airport every year. Following the example of other airports, the Brussels airport offers wireless access via Swisscom Eurospot: 28 access points in the airport were installed during Summer 2002 in Terminal A, Terminal B, and in the business lounges [20]. Many football fields now provide wireless access; most have signed with Sinfilo although a decision is still pending for the largest one.
6. Business models in Belgium The best places for providing WiFi service in Belgium are highly prized, and because they are not numerous, competition is high between the two dominant operators, Belgacom and Telenet, who negotiate fiercely to obtain the best locations. The owner of a good location can negotiate from a position of strength, and consequently the owner may try to get the hotspot established free of charge or negotiate a partnership between the owner and the provider. When the hotspot is active, the owner pays either a subscription or a commission to the provider. For these reasons, it is difficult to gain a clear sense of which business models would be most effective. And as a result of this strong competition, some absurd situations can also be found. For example, ‘dueling’ hotspots might be installed by competitors in the same physical area. For instance, most Total-Fina gas stations and Carestel restaurants are situated along freeways. The Carestel restaurants wanted to attract clients who had stopped to fill their vehicles with gas. So they installed Sinfilo hotspots. In response, Total-Fina installed Belgacom hotspots in order to recover what people were spending in Carestel restaurants. No roaming was possible between the two, as the wireless users could not change from one hotspot to the other. Deployment of hotspots can also be a marketing strategy. For example, Interbrew entered into a partnership with Belgacom to install hotspots in their cafes. People who have a Belgacom Adsl subscription can get free access to the hotspots until end of September 2004; others can buy prepaid cards. At the Brussels airport, the goal is to eenhance passenger satisfaction. The airport receives a profit from the commission on the turnover of wireless transmission data as well as from increased spending in the airport restaurants and shops [21]. Recently, the city
P. Vandepeutte / Technology in Society 27 (2005) 243–250
249
Table 2 Comparison of prepaid cards fees (end of June 2004) Player
Minimum
24 h
Others
Remarks
Swisscom Eurospot
4,5 V for 30 min
2900 V
Telenet (Sinfilo) Belgacom
9,99 V for 60 min* 7,5 V for 60 min
2000 V -
2 h: 9 V, 7 days: 65 V (download volume 500 Mb), 30 days: 115 V (1 Gb), 365 days: 949 V (12 Gb) 2 h: 5 V, 65 V per month when taking a one year contract -
Proximus
10 V for 60 min*
2000 V
5 days: 50 V
Purchase on line by credit card. Prices for use in Benelux *Unused time valid 90 days ADSL subscribers can access freely until September 30th 2004 *Unused time valid one month
authorities of Brussels announced plans to deploy dozens of hotspots that would bring WiFi free access to the entire city [22]. However, this free access would be counterproductive for the ISPs, who are accustomed to receiving fees for WiFi Access. Table 2 compares the fees for prepaid cards issued by various players. Currently, consumers can get free access or buy prepaid cards for varying amounts of time-per hour, per 24 h, etc. With prepaid ‘per hour’ cards, the hour is generally counted from the first use of the card, independent of the time actually used, even if people need to use the connection for just a few minutes. In Belgium, there are no roaming partnerships between the three mobile phone operators, so roaming is not yet planned for hotspots because the hotspots themselves are a strategic differentiator. The market is self-protecting. Nevertheless, roaming deals are being studied or considered in the near future with international operators. For example, Boingo recently signed a roaming agreement with All Telecom Security is a major issue, because wireless communications are not well protected. To deal with this issue, most hotspots access points support VPN software. Moreover, access points are themselves protected by firewalls.
7. Conclusion At present, most consumers expect that hotspot access will be free, like water and light are free, in airports, cafes, and restaurants. So WiFi providers must think about how to scale their offers so services can be offered at the lowest price. The return on investment is difficult to estimate, largely because figures on use of hotspots are difficult to obtain from ISPs. However, they did indicate that it is growing every month. The major Belgian telecom operators have not neglected the wireless markets. Both Belgacom and Telecom offer business solutions. However, their main concern is to acquire the best locations for wireless access, such as major sports fields or train stations. Security and roaming are two major issues that will need to be resolved if hotspots are to become as pervasive as GSM. Users expect to be able to change from one provider to another at no cost, with no excessive configuration changes, and with seamless
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availability-just as it is for mobile phones when abroad. To this end, several partnerships are being developed worldwide. No one can predict the real future of hotspots and their viability, but one can affirm that given the increasingly nomadic life- and work styles of 21st century individual, wireless communication is no longer just a trend, it is in our near future.
References [1] Yen DC, Chou DC. Wireless communication: the next wave of Internet technology. Technology in Society 2001;23(2):217–26. [2] http://stayonline.net/pr/PRa6SVnC.html. [3] Focquaert K. Data News, June 20, 2003 http://www.vnunet.be. [4] For more information about the 802.11 protocols, see http://searchnetworking.techtarget.com. [5] Intel website. www.intel.com. [6] http://www.rsasecurity.com. [7] http://www.informit.com/articles/article.asp?pZ102230andseqNumZ10. [8] http://csrc.nist.gov/CryptoToolkit/aes/rijndael. [9] www.strategyanalytics.com. [10] Instat website. Cahner’s In-Stat Group report. www.instat.com. [11] http://lubomira.free.fr/_data/wifi.pdf. [12] Intel website. http://intel.jiwire.com. [13] Intel website. http://www.intel.com/corporate/pressroom/emea/eng/archive/2003/111303en.htm. [14] Rao B, Parikh MA. Wireless broadband drivers and their social implications. Technol Soc 2003;25(4): 477–89. [15] Blackwell G. Rethinking the WiFi Hotspot Business Model. http://www.wi-fiplanet.com. Accessed April 5, 2002. [16] http://www.ispotaccess.com. [17] Six N. Internet sans fil pour tous a` l’ae´roport de Nice. http://solutions.journaldunet.com. Accessed December 6, 2002. [18] www.statbel.fgov.be. [19] http://www.point-topic.com/content/operatorSource/profiles/Belgium/Belgacom.htm. [20] Intel website. http://www.intel.com/francais/eBusiness/casestudies/megabeam/index.htm. [21] Intel website. http://www.intel.com/english/network/connectivity/resources/doc_library/case_studies/ megabeam.pdf. [22] http://www.muniwireless.com/archives/000183.html.
Pascale Vandepeutte is Lecturer in E-business at the University of Mons-Hainaut, Belgium. Her current research focuses on emerging technologies as well as on the evolution of business models. She is a member of the European Forum for Electronic Business (EEMA) and takes part in its web services and wireless Interest Groups. Her research has been published in Revue bancaire et financie`re and in the Journal of International Business Research. She received a PhD degree in Sciences from the University of Mons-Hainaut in 1986 and, prior to joining the University of Mons-Hainaut in 1999, she taught computer programming and networking to students in an engineering course.
The expansion of hotspots in Belgium Pascale Vandepeutte* University of Mons-Hainaut, Warocque Research Center, Place Warocque 17, B7000 Mons, Belgium
Abstract Thousands of hotspots have appeared worldwide in the last few years. This paper briefly describes wireless technologies, 802.11 protocols, and various security issues. The varied and changing business models for hotspots are studied. Belgium’s wireless market, which is experiencing a widespread demand for hotspots, is examined. Despite a high rate of coverage, Internet users are less numerous in Belgium than in neighboring countries, so it is natural that the adoption of wireless services is also slower. Belgium’s wireless market is dominated by telecom operators. Given that the present and continuing goal of all market players is to acquire the best locations, it is simply too early to identify the most effective business models. q 2005 Elsevier Ltd. All rights reserved. Keywords: Hotspots; Wireless communication; WiFi; Business models; Belgium
1. Introduction Wireless communications are changing the way we use the Internet. Mobile phones, PDAs, and laptops are becoming part of everyday life, just as the telephone and television have been for so long. Yen and Chou [1] estimate that ‘mobile data communication is the next big industry push, and with that expectation in mind, companies are making major investments in the technology.’ Interest in this technology is great despite uncertainties about ROI and various issues like security and roaming. Thousands of so-called ‘hotspots’ have appeared worldwide during the last few years. Hotspots are public Internet access points that have been installed in high-traffic venues like airports, hotels, and cafes. Business travelers make up this market’s most lucrative
* Tel.: C32 65 373 295; fax: C32 65 373 054. E-mail address: [email protected]. 0160-791X/$ - see front matter q 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.techsoc.2005.01.008
244
P. Vandepeutte / Technology in Society 27 (2005) 243–250
audience. Most currently use GPRS communication for transferring data. Developing and positioning hotspots is seen as an exciting business opportunity. Forecasts are not always consistent. Gartner estimates there will be more than 99 million WiFi (Wireless Fidelity) users by the end of 2006 [2]. But, according to Forrester [3], public LAN (PWLAN) will not be successful for businesses because laptops have a low rate of penetration-only 10% of Europeans own a laptop today, and this figure is expected to rise only to 16% by 2008. Forrester predicts that Bluetooth technology will have a greater future because by 2008, 286 million devices will be equipped with Bluetooth compared to 53 million with WiFi access. The spread of hotspots began in the US and Asia, but penetration also has been spectacular in Europe. Thus, it is interesting to study the expansion of such a new technology in Belgium, which is situated in the heart of Europe. Because of the presence of many international institutions and multinational companies, Belgium is often visited by politicians and business people. It is also a well-known destination for tourists-perhaps because one-tenth of the population is of foreign origin. In this paper, I briefly describe the technology and protocols used in hotspots, as well as the security issues that must be surmounted. Further, my examination of the hotspots market in Belgium shows that it is highly fragmented, and that the present goal of most actors in the market is still to acquire the best locations. Thus it is too early to identify the most effective business models.
2. WiFi technology and 802.11 protocols Wireless technologies include several solutions, such as Bluetooth, GPRS, and WiFi. WiFi is the specific technology that has been adopted for hotspots. The 802.11 protocols standardize various aspects of the wireless technology [4]. 802.11a, 802.11b, and 802.11 g are transport protocols. These differ by rate (802.11a-6 to 54 Mbps; 802.11b-11 Mbps; 802.11g-54 Mbps) and by compatibility (802.11 g is backward compatible with 802.11b but none are compatible with 802.11a). Connection to hotspots requires either desktops, laptops, or PDAs equipped with an 802.11-compatible device. Today, new laptops generally come equipped with chips that include an integrated wireless device such as the Intel development chip, Intelw Centrinoe [5], so they do not need a WiFi network card. The 802.11e and 802.11i protocols contain new functions. 802.11e deals with quality of service (QoS), while 802.11i handles security issues such as interception, intrusion, and unauthorized access. A recent research study by RSA Security found that more than onethird of WiFi access points in Paris and London are open [6], which means anybody with a WiFi card can access the network. Thus, owners must protect their hotspots access points through the use of security solutions, such as authentication processes, firewalls or Virtual Private Networks (VPNs), which increase users’ confidence. Present security solutions, like Wired Equivalent Privacy (WEP), are proprietary. Unfortunately, it can be easily cracked despite its 128-bit cryptographic key [7]. The recently ratified 802.11i standard is a major step toward more secure wireless access. It will provide Advanced Encryption Standard (AES) encryption, which uses the Rijndael algorithm [8] developed by two Belgian researchers, John Daemen and Vincent Rijmen.
P. Vandepeutte / Technology in Society 27 (2005) 243–250
245
Roaming, defined as the ability of a user in one mobile network to use another operator’s network transparently, is another problem. This well-known situation for mobile phones is not yet resolved. Nevertheless, partnerships are being developed primarily for international roaming.
3. Locations of hotspots Fig. 1 shows the locations of hotspots, based on the attending level and the wireless session time [9]. As expected, airports, hotels, and conference centers are places where people are most inclined to use wireless services. Business people do not like to lose time, so they utilize laptops to read and send e-mail and connect with their corporate networks. Fig. 2 shows laptop applications while traveling [10]. Broadband access is perceived by large and mid-size hotels as a necessary service offering to clients. It can be offered in guestrooms via a wired connection or in guestrooms and common areas via WiFi. Costs are estimated to be less for WiFi than for individual wired guest rooms [11]. Other venues like restaurants, cafes, train stations, gas stations, and conference rooms are other locations where installation of a PWLAN is becoming highly sought after. The number of hotspots is growing dramatically worldwide. Intel [12] references more than 43,000—50% located in the US. Large cities are particularly well-equipped: New York, London, and Vienna are among the top cities with the most hotspots [13]. Boingo is one of the companies providing wireless access in the Big Apple, and it has more than 90 hotspots located in cafes, restaurants, hotels, and convention centers. Wireless access is also provided free by some communities. For example, the Downtown Alliance in Lower Footfall Airports Events
Shopping centres
Railway stations
Conference centres Road service stations
Sports venues Holiday venues Nightclubs Universities/ Supermarkets / Colleges Dept Stores Restaurants Museums Coffee shops Libraries Cinemas
Hotels
Hospitals Time for WLAN session Fig. 1. Hotspots locations.
246
P. Vandepeutte / Technology in Society 27 (2005) 243–250 100
Percentage
80 60 40 20 0 Check email
Prepare document
Log on the Internet
Log on the corporate network
Scheduling
Presentations
Entertainment
Activities
Fig. 2. Laptop activities while traveling.
Manhattan has launched hotspots in eight open spaces in parks and plazas. No log-in procedure is needed, and the service is free. The French train company, SNCF, is experimenting with WiFi on its TGV line from Paris-Bordeaux-Pau. This experiment, called ‘Clic TGV,’ is a partnership with IBM, and is limited to sending and receiving e-mail. A server onboard the train offers general and tourist information as well as films for viewing. Dell is another partner of SNCF, on the Paris-Montpellier TGV line.
4. Models of various business services With the arrival of the Internet, classical business models have been reshaped. In the case of wireless, as the market continues to emerge, business models are still not mature. Rao and Parikh [14] analyzed three wireless broadband strategies: a traditional wireless Internet service provider (WISP), a software-driven initiative, and a community-based network. They cover major concerns with bandwidth scarcity, security challenges, and technology evolution. In Germany, T-Mobile launched a PWLAN service in November 2003. It was free until the end of 2003 but is now prepaid. Pricing is V7.95 per hour or V24.95 for 24 h. Vouchers can be paid by SMS sent from mobile phones. The Canadian company RoomLinX offers wireless access to guests in hotels [15]. The hotels do not charge room guests but they do charge corporate customers for wireless access service in meeting rooms, and RoomLinX takes a percentage (usually 50%) of the meeting room access revenue. This model is compelling: the revenue obtained is higher than what is generated from fees for in-room access. RoomLinX is also negotiating a monthly fee that would enable hotels to provide 24/7 network support. In the US, I SPOT Access Networks operates free PWLAN in Iowa and Nebraska [16]. I SPOT offers different services to four types of community participants: consumers (called members) who benefit from access, affiliates and sponsors who benefit from new promotional opportunities, and network partners who generate new revenues.
P. Vandepeutte / Technology in Society 27 (2005) 243–250
247
The airport in Nice, France offers wireless access in the departure area via six access terminals. When the service was launched, it was free. However, in the future, three options will likely be offered: a prepaid card, payment with a bank card on the portal website, and partnerships and roaming with providers [17].
5. The case of Belgium Fig. 3 shows that only 33% of the population in Belgium are Internet users, which is much less than in neighboring countries [18]. So it is natural that the adoption of wireless services is also slower there than in other countries, despite the high rate of coveragebroadband access (ADSL or cable) is available for 98% of the Belgian population [19]. Nevertheless, in 2003 one of every three computers purchased in Belgium was a notebook, and one of every three notebooks was wireless, typically supplied with the Intelw Centrinoe processor inside. Table 1 indicates the major players in Belgium and the number of active hotspots they manage. Most of these players are telecom operators. Belgacom and its affiliate, Proximus, are the major operators with the longest record of service in the field. Another operator, Telenet, recently acquired the Belgian WISP pioneer, Sinfilo. Swisscom Eurospot (created as a result of the purchases of Megabeam Networks and WLAN AG) is an European operator that targets four types of locations: airports, hotels, train stations, and convention centres. All Telecom, established in January 2000, provides broadband wireless access for the hospitality industry in France and Belgium. Between these five players, the number of hotspots stands at 665. Hotspots can be found in a variety of locations. For example, 33 Total-Fina gas stations provide WiFi access via Belgacom; 33 Carestel restaurants have been equipped by Sinfilo; Sweden Netherlands Finland Danmark Luxembourg Germany Austria United Kingdom Portugal EU15 Belgium
33
France Italy Irland Spain Greece 0
10
20
30
40
Fig. 3. Internet users per 100 inhabitants.
50
60
70
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P. Vandepeutte / Technology in Society 27 (2005) 243–250
Table 1 Major players in wireless communications in Belgium Type
Name
Number of hotspots in Belgiuma
Telecom operator Mobile phone operator Telecom operator Telecom operator Wisp
Belgacom Proximus Telenet Swisscom Eurospot All telecom
347 35 129 21 133
a
Remarks
Belgacom affiliate Acquired the Wisp Sinfilo
By the end of June 2004.
about 100 cafes run by Interbrew (the famous brewer of Stella Artois beer) are planning to provide WiFi access via Belgacom). Fifteen to 20 million passengers (66% business travelers) pass through the Brussels airport every year. Following the example of other airports, the Brussels airport offers wireless access via Swisscom Eurospot: 28 access points in the airport were installed during Summer 2002 in Terminal A, Terminal B, and in the business lounges [20]. Many football fields now provide wireless access; most have signed with Sinfilo although a decision is still pending for the largest one.
6. Business models in Belgium The best places for providing WiFi service in Belgium are highly prized, and because they are not numerous, competition is high between the two dominant operators, Belgacom and Telenet, who negotiate fiercely to obtain the best locations. The owner of a good location can negotiate from a position of strength, and consequently the owner may try to get the hotspot established free of charge or negotiate a partnership between the owner and the provider. When the hotspot is active, the owner pays either a subscription or a commission to the provider. For these reasons, it is difficult to gain a clear sense of which business models would be most effective. And as a result of this strong competition, some absurd situations can also be found. For example, ‘dueling’ hotspots might be installed by competitors in the same physical area. For instance, most Total-Fina gas stations and Carestel restaurants are situated along freeways. The Carestel restaurants wanted to attract clients who had stopped to fill their vehicles with gas. So they installed Sinfilo hotspots. In response, Total-Fina installed Belgacom hotspots in order to recover what people were spending in Carestel restaurants. No roaming was possible between the two, as the wireless users could not change from one hotspot to the other. Deployment of hotspots can also be a marketing strategy. For example, Interbrew entered into a partnership with Belgacom to install hotspots in their cafes. People who have a Belgacom Adsl subscription can get free access to the hotspots until end of September 2004; others can buy prepaid cards. At the Brussels airport, the goal is to eenhance passenger satisfaction. The airport receives a profit from the commission on the turnover of wireless transmission data as well as from increased spending in the airport restaurants and shops [21]. Recently, the city
P. Vandepeutte / Technology in Society 27 (2005) 243–250
249
Table 2 Comparison of prepaid cards fees (end of June 2004) Player
Minimum
24 h
Others
Remarks
Swisscom Eurospot
4,5 V for 30 min
2900 V
Telenet (Sinfilo) Belgacom
9,99 V for 60 min* 7,5 V for 60 min
2000 V -
2 h: 9 V, 7 days: 65 V (download volume 500 Mb), 30 days: 115 V (1 Gb), 365 days: 949 V (12 Gb) 2 h: 5 V, 65 V per month when taking a one year contract -
Proximus
10 V for 60 min*
2000 V
5 days: 50 V
Purchase on line by credit card. Prices for use in Benelux *Unused time valid 90 days ADSL subscribers can access freely until September 30th 2004 *Unused time valid one month
authorities of Brussels announced plans to deploy dozens of hotspots that would bring WiFi free access to the entire city [22]. However, this free access would be counterproductive for the ISPs, who are accustomed to receiving fees for WiFi Access. Table 2 compares the fees for prepaid cards issued by various players. Currently, consumers can get free access or buy prepaid cards for varying amounts of time-per hour, per 24 h, etc. With prepaid ‘per hour’ cards, the hour is generally counted from the first use of the card, independent of the time actually used, even if people need to use the connection for just a few minutes. In Belgium, there are no roaming partnerships between the three mobile phone operators, so roaming is not yet planned for hotspots because the hotspots themselves are a strategic differentiator. The market is self-protecting. Nevertheless, roaming deals are being studied or considered in the near future with international operators. For example, Boingo recently signed a roaming agreement with All Telecom Security is a major issue, because wireless communications are not well protected. To deal with this issue, most hotspots access points support VPN software. Moreover, access points are themselves protected by firewalls.
7. Conclusion At present, most consumers expect that hotspot access will be free, like water and light are free, in airports, cafes, and restaurants. So WiFi providers must think about how to scale their offers so services can be offered at the lowest price. The return on investment is difficult to estimate, largely because figures on use of hotspots are difficult to obtain from ISPs. However, they did indicate that it is growing every month. The major Belgian telecom operators have not neglected the wireless markets. Both Belgacom and Telecom offer business solutions. However, their main concern is to acquire the best locations for wireless access, such as major sports fields or train stations. Security and roaming are two major issues that will need to be resolved if hotspots are to become as pervasive as GSM. Users expect to be able to change from one provider to another at no cost, with no excessive configuration changes, and with seamless
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availability-just as it is for mobile phones when abroad. To this end, several partnerships are being developed worldwide. No one can predict the real future of hotspots and their viability, but one can affirm that given the increasingly nomadic life- and work styles of 21st century individual, wireless communication is no longer just a trend, it is in our near future.
References [1] Yen DC, Chou DC. Wireless communication: the next wave of Internet technology. Technology in Society 2001;23(2):217–26. [2] http://stayonline.net/pr/PRa6SVnC.html. [3] Focquaert K. Data News, June 20, 2003 http://www.vnunet.be. [4] For more information about the 802.11 protocols, see http://searchnetworking.techtarget.com. [5] Intel website. www.intel.com. [6] http://www.rsasecurity.com. [7] http://www.informit.com/articles/article.asp?pZ102230andseqNumZ10. [8] http://csrc.nist.gov/CryptoToolkit/aes/rijndael. [9] www.strategyanalytics.com. [10] Instat website. Cahner’s In-Stat Group report. www.instat.com. [11] http://lubomira.free.fr/_data/wifi.pdf. [12] Intel website. http://intel.jiwire.com. [13] Intel website. http://www.intel.com/corporate/pressroom/emea/eng/archive/2003/111303en.htm. [14] Rao B, Parikh MA. Wireless broadband drivers and their social implications. Technol Soc 2003;25(4): 477–89. [15] Blackwell G. Rethinking the WiFi Hotspot Business Model. http://www.wi-fiplanet.com. Accessed April 5, 2002. [16] http://www.ispotaccess.com. [17] Six N. Internet sans fil pour tous a` l’ae´roport de Nice. http://solutions.journaldunet.com. Accessed December 6, 2002. [18] www.statbel.fgov.be. [19] http://www.point-topic.com/content/operatorSource/profiles/Belgium/Belgacom.htm. [20] Intel website. http://www.intel.com/francais/eBusiness/casestudies/megabeam/index.htm. [21] Intel website. http://www.intel.com/english/network/connectivity/resources/doc_library/case_studies/ megabeam.pdf. [22] http://www.muniwireless.com/archives/000183.html.
Pascale Vandepeutte is Lecturer in E-business at the University of Mons-Hainaut, Belgium. Her current research focuses on emerging technologies as well as on the evolution of business models. She is a member of the European Forum for Electronic Business (EEMA) and takes part in its web services and wireless Interest Groups. Her research has been published in Revue bancaire et financie`re and in the Journal of International Business Research. She received a PhD degree in Sciences from the University of Mons-Hainaut in 1986 and, prior to joining the University of Mons-Hainaut in 1999, she taught computer programming and networking to students in an engineering course.