JUL 2, 2003 5:00am ET

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Survey: Hotspot Growth Not Enough

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The number of public hotspots has risen from just over 1,200 in 2001 to more than 71,000 in 2003, but it's still not enough to meet users' needs, according to a recent survey by Gartner Inc., Stamford, Conn. The consulting and research firm says the number of hotspot users will increase from 2.5 million last year to 9.3 million by year's end; 4.7 million of the total are from North America.

"The vast majority of the 2.5 million hotspot users in 2002 were infrequent users attracted by opportunities to use a service just once or twice, often free of charge," says Ian Keene, vice president at Gartner. "Many more hotspot locations are needed if user numbers are to rise greatly."

A hotspot is a location where network access points facilitate public wireless broadband network services to visitors with mobile computers. A handful of provider organizations have begun exploring the use of hotspots as "visitor networks" for guests and visiting remote employees to access the Internet, intranets and e-mail.

The survey also revealed that retail outlets, such as coffee shops, gas stations and restaurants, were the leading hotspot hosts, totaling 50,287 in 2003. There will continue to be a rapid increase in retail location hotspots through 2005, according to the survey.

"Some of these hotspots won't succeed because they fail to attract enough customers or because customers use the service for long periods without enough money on goods and services," Keene says. "Network service providers need to figure out how to generate revenue directly from hotspot users, as opposed to relying on revenue from supplying broadband lines. They should consider adding hotspot access to their services, rather than positioning it as a stand-alone source of revenue."

For more survey information, go to www.gartner.com.

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