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Summary:

The number of Wi-Fi hotspots around the world is expected to crack one million locations by 2013 as carriers continue to embrace the hotspot in face of growing data demand. Gone are the days where simple Wi-Fi is a second-class citizen when it comes to networks.

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Updated. Wi-Fi hotspots will continue to grow in terms of locations, the total number of connections and their importance to network operators who face growing data demand. In its latest report, In-Stat research provides some numbers to give some sense of scale for the hotspot trend, estimating that in 2015, wireless hotspots will account for nearly 120 billion connect sessions. Helping to grow the connection number will be improved, automatic log-ins and more hotspots to tap in to.

Around the globe, In-Stat expects one million hotspot locations available by 2013, and based on the number of publicly available new Wi-Fi networks I’m seeing in my rural backyard, I’m not surprised. Businesses of every size are turning to Wi-Fi not only as a convenience for customers but also as a way to expand foot traffic, advertising opportunities and engagement. Traditional brick-and-mortar stores don’t have the most people on their networks, however. That distinction belongs to transportation hubs and convention centers, where the large crowds account for 30 percent of all Wi-Fi hotspot connects.

Laptop computers are still the No. 1 device for Wi-Fi hotspot use, which makes sense as Wi-Fi radios are standard fare for notebooks. Smartphones and tablets are catching up, however, even though many have integrated 3G or 4G radios. Device owners are apt to take advantage of free or low-cost hotspots to reduce the risk of mobile broadband data overages as carriers migrate away from unlimited data plans. The Wi-Fi connections are often faster and can use less power, which can save battery life on these mobile devices.

Network operators see the benefits of Wi-Fi offload and are likely to aid in the expansion of hotspot locations by partnering with businesses directly or through existing hotspot networks, such as Boingo Wireless. In July, for example, Japanese network operator KDDI said it would build out 100,000 Wi-Fi hotspots by March 2012 that will seamlessly work with the carrier’s WiMAX network. A seamless network transition, in addition to automatic log-in software — similar to Boingo’s current application — essentially turns Wi-Fi into the “other” cell network in this case.

Update: By way of email, In-Stat analyst Amy Cravens offered me additional context to the prediction of one million hotspot locations by 2013, saying there were an estimated 420,000 hotspot venues in 2010 and figures 630,000 by the end of 2011.

  1. I wonder why carriers didn’t jump towards UMA technology (except T-Mobile). Will IMS start a push towards using wifi not just for data but also for voice?

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    1. That’s a great question, Stuart. I think part of the reason is lack of control over the network quality, and therefore over the voice service.

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      1. Kevin and Stuart, is it mostly the carriers holding back UMA? T-Mobile has recently provided UMA “Wi-Fi” calling to more of their Android phones via a proprietary UMA “Wi-Fi calling” app produced for them by Kineto Wireless. Google’s flagship Android phone, the Nexus S, has been blocked (by Google? Samsung?) from use of T-Mobile UMA service. No one seems to have a good answer as to why, but it suggests Google / Andy Rubin doesn’t care about UMA despite all the benefits … btw T-Mobile / Kineto makes UMA Wi-Fi calling available for the Samsung Galaxy S which is essentially the same as the Nexus S.

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      2. @Brendan UMA and WiFi Calling are two different services. I’ve used both on T-Mobile. The key differences are WiFi to mobile hand-off (UMA does this, WiFi Calling does not) and call quality (UMA is better). Currently, I believe on T-Mobile’s BlackBerry phones have UMA. Its Android phones have WiFi Calling.

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    2. UMA required extra equipment in the network, and specialized upgrades in the handset. This meant that any carrier who wished to use it would immediately need to invest in network upgrades. This was not desirable.

      T-Mo, as well as about 5 other carriers globally, got on board early on. T-Mo in the USA is notoriously spectrum-constrained, so they have an extra incentive to get voice and or data calls off of the cellular network.

      But most carriers were turned off by the fact that UMA would require upgrades in every handset. So if T-Mo offers UMA, it STILL does not work in all their phones. And it has always been harder to get a phone from Samsung, LG, Nokia, Motorola, or whoever with customizations. So UMA had scalability, lack of momentum, increased cost, and reduced choice problems. No surprise, then, that it did not take off.

      No conspiracy here. Just that it’s very tough to get a proprietary standard into the market.

      Kineto has since re-launched their solution (the former UMA), and it now requires less customization on the phone. A simple Android app, and a Wi-Fi radio (or any fast IP connection) on a decent smartphone platform are all it takes. They are also integrating their solution into a 3GPP standard. That’s a better recipe for success.

      Derek Kerton

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  2. “Seamless network transition” – yes Sir.
    WiFi will have to play a huge role with the anticipated volume of data. The carrier pricing game-play is going to be policy based and I can see some services offered at different levels (of service) and different prices per logged network. Wifi is going to be billed differently – will not be free under the carrier wings.

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  3. Keith Erskine Tuesday, August 30, 2011

    I noticed this trend on my recent trip to the Berkshires. Every restaurant and coffee shop has WiFi available. One reason could be to have an easy way for LBS services to locate their customers in the site.

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