Tucked in a café in the heart of a Montreal student ghetto is a hot spot. It’s not too hard to find if you know where to look.
Not hot as in the discussion or the jazz, but in a Wi-Fi hot-spot, short for a public wireless Internet access centre. These hot-spots are perhaps the biggest wireless
technology (other than cell phones) ever hyped by non-tech firms. And they are popping up at a frenetic pace that shows no sign of slowing down.
Take the Second Cup coffee chain: The company recently introduced 12 hot-spots in Toronto, Calgary and Montreal.
There are an estimated 500 of them in the country, up from around 80 just a year ago. The total is notching up each day through providers like Vancouver-based FatPort, Montreal-based Tadaa Wireless, Bell Canada and Toronto-based Spotnik Mobile Inc., which is owned by Telus Mobility.
In its worldwide ranking, the Jiwire Web site cites Canada eighth for its number of hot-spot locations. The U.S. is number one, with nearly 14,000 locations so far.
And it’s not just café operators that are eating up wireless. Announcements are starting to come out, listing airports, restaurants convention centers and hotel chains that are serving up wireless Internet access to their customers.
Hot-spots are usually located in major cities where wireless mobile users are likely to congregate, but even the Cedar Meadows Resort in Timmins, Ont., found its place on the Wi-Fi hot-spot map.
With Wi-Fi (for wireless fidelity, based on IEEE 802.11 short-range networking technology) becoming a standard feature in nearly every laptop, solution providers are looking for ways to capitalize on this rapidly-growing market.
In many cases, independent operators collaborate with carriers and/or large service providers to provide mobile users with a combination of universal access and local services. The technology’s low-fuss, low-cost installation and ease-of-use means hot-spot locations enjoy a low barrier to entry: It can cost less than $1,000 for wireless gear along with the regular monthly cost for a DSL line.
“”Wi-Fi has been presented as opening up a number of interesting possibilities because of the service provider and the business model that can be used to generate revenue, and there have been some big splashy announcements around that,”” said Mark Quigley, research director for Canada at the Yankee Group.
He suggests the branding is moving the technology from the fringes to the centre of wireless computing. How far it gets will likely depend on how well providers gain endorsements from major Canadian businesses and giants in the tech industry.
Barely in business more than a couple of years, none of the young companies claim to be making a profit. But they hope as popularity grows that brand-name awareness will as well, and profits may eventually follow in a couple of years.
Most recently, Spotnik got on track with Via Rail Canada, signing a deal that will see its MobileSpot wireless service rolled out on some Via 1 trains. It is being introduced as a free Internet service trial to the top-paying passengers travelling between Montreal and Quebec City until the end of March. Spotnik’s partners Telus Mobility, Cisco Systems Canada and palmOne will help drive the solution.
It parallels Bell Mobility’s free trial on Via trains between Toronto and Montreal.
FatPort, a wholly owned subsidiary of Ignition Point Technologies Corp., claims it is running nearly neck-in-neck with leader Spotnik Mobile and offers the most extensive hot-spot coverage across Canada.
The company, which employs nine people, recently signed deals with the Earls restaurant chain (with more than 50 locations), as well as Fairmont Hotels Coastal Resorts, McDonald’s and the Hospitality Network.
“”The install is usually very easy for us to do,”” said Malcolm McDonald, FatPort’s marketing manager. “”In most restaurants, it’s just a matter of us going into the office and finding their DSL connection. One of the reasons that Earls was so attractive is they already had high-speed Internet, as mandated by their head office.””
The business model makes sense for restaurants like Earls, which wants to add a service for customers, he said.
“”Their Internet connection is not simply a drain off them or an expense,”” he said. “”They also generate some revenue from it. Hopefully, it’s enough to cover the cost of having the DSL connection.””
Wi-Fi branding today is a lot different than just three years ago, McDonald said.
“”Back in the early days (2.5 years ago) when we first started out, for the first six months anytime we saw a customer on our network we’d have a little happy dance,”” he said.
“”Now we have 200 to 300 people a day across Canada using the service. We have about 125 locations — the number fluctuates, mostly up. In the past three months, we’ve added four locations a week on average.””
McDonald says his company, which is in every province west of Quebec, is willing to accept more of the cost of installation if it adds an attractive location. Once a location is up, FatPort pours in marketing, branding and promotion on its Web site.
In Quebec, Tadaa Wireless has captured a large chunk of the market with 30 hot-spot locations so far. Elsewhere, the company partners with other providers. Its biggest victory is the city’s train station, which Jiwire ranks 12th most-used hot spot in the world.
Tadaa Wireless also services hotels including the Crowne Plaza and Four Points Sheraton, and such eateries as Second Cup, M.B.Co., Café Depot, Café Supreme, Café Vienne and Commensal. Its higher-end locales include Queue de Cheval restaurant, Hotel Nelligan and Hotel Place d’Armes.
Mobile users tend to stumble across the locations rather than seek them out. But that’s changing as providers sign up deep pocket partners.
For example, Spotnik and Via’s deal includes plenty of branding and promotion. The trains will be wrapped with Telus and Spotnik brands and the logos of trial sponsors, along with the bilingual message “”Online. Onboard.”” Passengers will see signs in train stations, banner advertising on Via’s Web site and promotion material if they subscribe to Via’s e-newsletter.
Passengers who need a little troubleshooting on the technology can wave over on-board wireless “”conductors”” travelling with the train.
Intel Corp. is also working more closely with providers to throw hot spot technology in front of consumers. Under a deal with FatPort announced late last month, the chip giant is offering marketing services to tie in with this month’s launch of the latest version of its Centrino chips for notebooks.
Wi-Fi also seems to be having a spin-off effect. As hot spot locations grow, wireless networking is starting to appeal to consumers and smaller businesses just starting to reach a comfort level with the technology.
Tadaa Wireless Communication Group’s president Daniel Yeboah said his company is getting more involved in networks at companies with 50 to 100 employees, and residential projects.
Wireless technology challenges are facing providers, however.
“”The business model (for hot-spots) hasn’t been quite figured out yet,”” said the Yankee Group’s Quigley. “”There are still a lot of unanswered questions in terms of how companies are actually going to make money providing the service.””
Also, mobile users must have an account with the particular service provider at each location. The ability to roam on one hot-spot network is not yet at the same level as cell phones.
“”For Wi-Fi, the biggest thing that needs to happen is more providers need to come to terms with a standard framework for roaming across carriers.,”” said Doug Cooper, country manager for Intel Corp. “”That’s really been probably the main hold-back for business adoption
