22 November 2007
Following on three years of growth, commercial WiFi hotspots now face a dim future in South Africa, at least among corporate workers, with a new study by technology research firm World Wide Worx showing a steady move toward the use of more affordable 3G technologies.
Mobility 2007, World Wide Worx’s latest annual study of mobile technology, released in Johannesburg on Tuesday, shows that the corporate use of WiFi – small networks that allow wireless access to the internet – has fallen back after a steady rise, while the use of 3G – wireless broadband provided by the mobile networks – has rocketed.
“We have been warning for several years that commercial WiFi hotspots, especially in hotels and conference centres, are in danger of pricing themselves out of the market,” said World Wide Worx MD Arthur Goldstuck. “And, now that a monthly subscription to a basic 3G service is cheaper than a few hours on most commercial hotspots, the chickens have come home to roost.”
The study found that the proportion of South African corporations whose staff use 3G data cards rose from 58% in 2006 to 82% in 2007. In contrast, the proportion that facilitate WiFi access by their staff fell from 74% to 66%.
“Technologies and old business models cannot survive in an environment where customers of the technology are informed and experienced in the use of these technologies,” said Len Pienaar, head of FNB Mobile and Transact Solutions, which partnered with World Wide Worx on the study.
Another factor that is having an impact on WiFi is the promise of WiMAX, a high-speed long-distance broadband technology which is being piloted by a number of service providers in South Africa. As many as 8% of corporations say they are trying it out, which exactly matches the proportion that is dropping WiFi.
Among small and medium businesses (SMEs) the picture is slightly brighter, the survey found, with WiFi deployment rising from 33% of respondents in 2006 to 36% in 2007. But the numbers are deceptive: the majority of these SMEs – 26% – are using WiFi to network their offices more efficiently, rather than enabling their staff to use it in wireless hotspots.
By contrast, the use of wireless broadband services by SMEs has jumped sharply, from 16% in 2006 to 31% in 2007. As with corporates, most SMEs using 3G are doing so to remain connected when out of the office and as a back-up, rather than as a primary form of connectivity.
“It only takes one or two episodes of paying R30 for 30 minutes access at a hotspot to realise that a 3G subscription costing less than R100 a month makes far more sense,” Goldstuck said. “Thanks to mobile technology, paid WiFi in hotel rooms is going the same way as phone calls from hotels – their exorbitant pricing can’t compete.”
The findings make it clear that businesses are conscious of both cost and convenience, and will embrace those technologies that make business sense and are easy to use.
“We experienced massive e-commerce growth at the turn of the millennium due to innovation and a surge in internet usage,” Pienaar said. “The Mobility 2007 findings illustrate that we are about to experience significant growth in the mobile market.”
“As such, it’s really exciting to imagine the impact that mobile technologies will have on m-commerce in the South African market.”