Wi-Fi is Hot Hot Hot

Just when you think the dog days of summer are here, something comes along to add sizzle to the heat. Agents can find just such an opportunity with selling Wi-Fi broadband wireless connectivity.

According to the Telecommunications Industry Association’s 2004 Telecommunications Market Review and Forecast, spending in the U.S. wireless market (transport services, handsets, infrastructure, equipment and professional services) totaled $134.5 billion in 2003. Wireless spending will grow at a compound annual rate of 9.1 percent from 2004 to 2007, reaching an estimated $190.8 billion. Wi-Fi is a significant driver for the market as a whole, TIA notes, representing a small but rapidly growing component of wireless communications services. Spending on Wi-Fi services is predicted to increase from $21 million in 2003 to $270 million by 2007.

While employees of large businesses currently make up the largest single segment of business users of wireless data, by 2009 small business employees a sweet spot for agentswill comprise nearly 40 percent of all such users. More opportunity could be in the pike: A survey of 1,000 firms by In-Stat MDR found that nearly a third would be very interested in a service that would let them use a cellular phone over a Wi-Fi network.

There are two plays for channel partnersselling hotspot access and selling corporate wireless LANs. For the former, some service providers are offering programs that make selling subscriptions for upfront commissions lucrative.

For instance, Boingo Wireless Inc. offers consumer and corporate Wi-Fi plans via an agent program. The latter allows agents to earn upgrade and renewal commissions on that account in addition to the one-time upfront sign-up bonus.

T-Mobile USA operates hotspots in 3,000+ Starbucks, Borders Books and airport locations. Master agency Venicom Inc. is capitalizing on the network by selling subscriptions that give users access in all T-Mobile hot spots for a monthly fee: $29.99 for existing T-Mobile users, $39.99 for the freestanding service and $19.95 for Venicom subagents. Venicom receives up-front commissions for each sale, but the real proposition is in the power of the bundle.

We find that its a great add-on product to BlackBerry, says Goble. We bundle BlackBerry and the Wi-Fi with a voice plan, and then the commissions can be upwards of $300, and its a killer package that people want.

ABI Research projects annual hotspot access point shipments to reach about 1 million by 2008.
Selling Wi-Fi services combined with cellular and other operator offerings could help stimulate more consumer interest in hotspots, explains Edward Rerisi, ABIs director of research. The Wi-Fi market continues to be competitive, but the market is large enough for players to carve a niche in this segment.

Then theres the business market for WLANs. Here, an agent can sell the circuits needed to provide bandwidth to the WLAN, whether that be DSL, cable, T1 or other pipe, and then bring in the equipment for additional revenue. Alternatively, an agent could partner with a VAR for the equipment piece. Additionally, management software and services, integration and other value-added services provide even more revenue possibilities.

A few other aggregators and WISPs offer turnkey packages for agents to sell. One such is SkyRiver Communications Inc., which offers complete WLANs for the hospitality and multi-tenant office/residential markets. Its agent program pays partners a one-time percentage of the hardware sale and installation fees, and the agent can bring his or her own broadband service to the deal. SkyRiver master agents, including World Telecom Group and Ontario, Calif.-based Allcom, offer other revenue opportunities.

We provide the Internet connection that ties the system together the WLAN is hooked up to the Internet, says Tom Sullivan, co-founder of Wi-Fi Guys LLC, which deploys Wi-Fi in hotels and offers agents commission on its Wi-Fi service and upfront payments on equipment. We saw an opportunity to sell more Internet connections to our hotel clients, DSL, T1s. We interconnect that with our equipment to hook it up to the wireless network.

According to DellOro Group, the Wi-Fi-based wireless LAN market will grow 23 percent in 2004 to $2.2 billion, continue to grow in 2005, and will peak in 2006. While other segments may slow down in growth after that, the enterprise market for WLANs is expected to maintain a five-year compound annual growth rate of more than 20 percent, to reach $1 billion in 2008. “In the coming years, the enterprise wireless LAN market will increasingly thrive as enterprises continue to embrace WLAN technology for its convenience and as a means to improve productivity, says Greg Collins, senior director at analyst firm.

The take-off in the WLAN market has been driven largely by productivity gains and cost savings over Ethernet installations, attractive aspects for enterprises and small and medium businesses looking to cut costs. At the same time, technology enhancements have made Wi-Fi a truly viable option for secure networking.

As far as productivity goes, Cisco Systems Inc. released a study in November 2003 showing that enterprises, particularly in vertical markets, can reap almost 27 percent more productivity by using Wi-Fi access to the network.

Wi-Fi-based LANs offer several other advantages for a business, such as rapid adds, moves and changes within the enterprise environment, since it allows on-the-fly setup and simple self-configuration. Guest access is another attractive area, since Wi-Fi allows company visitors to get online without hassle and without having to wait for an IT manager to do the setup. An application called hoteling is also popular, which refers to the ability of telecommuting workers to open their laptops at home or at the office, and be on the same network regardless.

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