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Press Release

ASIA WI-FI SERVICES AND PRICING POSE DILEMMA FOR FUTURE GROWTH

London, June 10th 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 north-east 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 north-east 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 north-east Asia,' commented Philip Low, the report author. 'Outside this area, infrastructure will continue to increase, but few players 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, and assesses their combined strategic impact. Overall, the report is the first to analyse Wi-Fi service developments from a marketing perspective, of key value to players and suppliers in the Asia region.

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