Asia Wi-Fi Services and Pricing Pose Dilemma for Future Growth

Asia Wi-Fi Services and Pricing Pose Dilemma for Future
Growth, According to BroadGroup Report

LONDON, June 11, 2004 -- A new report from BroadGroup, the
London-based consultancy, reveals that consumerist pricing
found in the region is still the cheapest worldwide for
public broadband, with one-hour usage averaging only USD
4.60. However, future growth is likely to be confined to the
four countries of northeast Asia, which dominate the region
with 80% of all installed hotspots.

The report, Marketing Wi-Fi Services in Asia - Service
Provider Strategies and Future Growth, presents a unique
analysis of how far Wi-Fi services have progressed in the
region, and provides extensive insight into the marketing
strategies deployed. Findings reveal that Asia has developed
distinct patterns of response to the Wi-Fi service
opportunity, with broad similarities in marketing strategy
apparent across four geographic blocs, the most important of
which is northeast Asia.

Telcos dominate Wi-Fi service provision, and the report
suggests that the influence of consumerist pricing and
bundling structures has now created effective barriers to
further new entrants. The report also finds a shortfall in
targeting international business travellers -- inbound as
well as inter-regional -- and that a key revenue
opportunity is being missed.

Of the 64 service providers surveyed, across 15 countries,
17% are telcos who collectively control over 68% of all
hotspots deployed. Mobile operators (21% of total) control a
further 24% of all hotspots, leaving some 40 new entrants
competing with less than 8% of all hotspots.

"Future growth will occur primarily in northeast Asia,"
commented Philip Low, the report author. "Outside this area,
infrastructure will continue to increase, but few, if any,
players outside of the telcos have the marketing power
required to create an integrated marketing approach for home
and enterprise users."

The report found that average prices in key trend categories
-- one-month, 24-hours and 1-hour -- had all experienced
declines during the period August 2003-April 2004. The most
dramatic decline of 24% is evidenced for 24-hour pricing,
now down to USD 8.59.

Beginning with an assessment of the potential addressable
market across the region, the report dissects the strategic
positioning of Wi-Fi services, including value chain
activities, collaborative and roaming strategies and their
potential impact on further development.

An in-depth perspective of customer segmentation offers
usable structures for companies marketing Wi-Fi services in
the region. The report also identifies key trends,
country-market differences and in conjunction with other
elements of the marketing mix, including promotion and
branding, assesses their combined strategic impact.

Overall, the report is the first to analyze Wi-Fi service
developments from a marketing perspective, of key value to
players and suppliers in the Asia region.