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Eircom, the incumbent in Ireland, dropped its hotspot access charges: An hour at an Eircom hotspot now costs 5 euro, compared to 10 euro previously. Eircom also offers a 12 euro monthly subscription to its broadband customers. Folks who aren’t Eircom broadband customers pay 30 euros, which is still half of Bitbuzz’s 70 euro monthly subscription fee. Generally, prices in Ireland and in many places in Europe are pretty outrageous so Eircom’s change in prices may indicate the beginning of a downward trend in access fees.
This story also includes some interesting results from a study that shows that many people would prefer to buy a coffee or a pastry at a cafe and get “free” Wi-Fi access rather than paying 5 euros or so directly for the access. There is a growing perception that Wi-Fi should be part of the experience at a cafe. This may mark an important change in the market here that could lead to more hotspots and possibly even free hotspots, which are virtually non-existent in Dublin.
PlusNet, a broadband provider in the UK, is offering a promotion as part of a new offering: It appears that PlusNet will begin offering customers access to BT Openzone hotspots. For the month of March, access to the hotspots is free. After that, existing customers will pay 7p per minute to access the hotspots. I’m a little confused about what other pricing options are available; the site notes that new customers will automatically be put onto the lowest cost subscription account, which offers 120 minutes of access. Per minute pricing for hotspot access seems so draconian.
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.