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February 24, 2005

Wi-Fi Pricing Still High in Europe

By Nancy Gohring

The price to access hotspots is still high in Europe and those high prices are a common complaint: Apparently BT at least doesn’t believe that reducing prices will attract more customers, even though it seems really obvious that lowered prices would surely draw more users.

Mike Masnik at The Feature notes that BT ought to expect competition from free hotspots. It’s difficult, though not impossible, to compete against free access. T-Mobile in the U.S., for example, has positioned its hotspot offering as a very secure, reliable service, mainly targeting business users. T-Mobile reasons that such users will be willing to pay for the access rather than visit a free hotspot because of the reliability and security. If more and more free hotspots start popping up in BT’s markets, it’ll have to offer some sort of angle for customers or they’ll find there’s no need to pay for the access. But BT may be gambling that the free hotspot concept just may not happen extensively enough to threaten its high-price model.

Or, as a post on ISP Review suggests, BT may well be waiting for competitors to drop prices first and then it will follow suit. Also, with the results BT is getting from its hotspot service, I can see why it may find it unnecessary to drop prices. ISP Review reports that take-up of BT’s Openzone service grew by 400 percent last year and is growing by 20 percent a month. If people are paying the price BT is asking, no reason to drop the price.

Posted by nancyg at February 24, 2005 10:45 AM

Categories: pricing

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