Hotspots: How Consumers Choose Where to Make the Connection

AT&T has been expanding its wi-fi footprint in 2008. Last week, AT&T announced that it was buying Wayport, a wi-fi service provider. Back in February, the telco became Starbucks’ new wi-fi partner, providing access in thousands of U.S. locations.

With more and more wi-fi enabled devices in consumers’ hands – from laptops to smartphones to portable gaming consoles – the race is on to become the provider of choice.

What factors influence consumer choice when it comes to wi-fi? Results of a recent survey by Compete suggest that low price, speed, and convenience will attract the most customers.

  • Most wi-fi users are price sensitive; more than 60% said that low price was a key factor in choosing which wi-fi hotspot to use
  • Convenience is important; about half of respondents said connection speed and availability were important factors in their choice
  • The provider is not as important, although finding their wireless carrier hosted connection was a more important factor for consumers than locating a hotspot hosted by their broadband carrier

What are the implications for wi-fi service providers?

The bad news is that, as providers extend their coverage and more options become available, customers probably won’t make a special effort to use a particular provider unless they know they can get fast and inexpensive, if not free, service where they want it. Although there may be some opportunities to have partnerships similar to the one between AT&T and Starbucks, those are relatively few and far between.

The good news is that the increasing number wi-fi enabled mobile phones coming on the market – and possibly the lighter, more portable laptops – will increase the demand for wi-fi over time. Even though they may not be able to charge high access fees carriers might consider the opportunity to offer wi-fi, bundled with data and wireless subscriptions, to bolster consumer loyalty, and ultimately revenue.

Increasing consumer adoption has created opportunities for providers to jump into the market with new solutions. Chances are the cheapest, fastest and most convenient choices will come out on top.

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