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WI-FI TARIFF SURVEY SHOWS PRICING GEARED TO CORPORATE MARKET BUT STRUCTURES STARTING TO COMMODITISE

- TARIFF CATEGORIES CONVERGING - AVERAGE PRICE FOR ONE HOUR USAGE IS EURO 6.47 - COMPETITION FORECAST TO INCREASE FROM ROAMING ENTRANTS - CONSOLIDATION PRESSURES ALREADY EVIDENT London, 13 January 2004 - A new report by BroadGroup, the London based consultancy, reveals that Wi-Fi tariffs are converging on more standardised products as competition emerges from North American roaming entrants wishing to extend the aggregator model. The report, Wi-Fi Tariffs Europe, which dissects service tariff categories offered by 96 providers in 19 countries across Europe and eastern Europe. In addition to shifts in pricing over the 12 month period to evince key trends, the report also suggests that a correlation between larger or more connected players and higher prices increasingly characterises the general market trend, with tariffs geared for corporate users. However entry by North American players with significantly lower price levels, although very limited at present, could impact and extend over time. Based on research across all service providers, the report found that the average price for one-hour connectivity via public access WLANs in Europe is Euro 6.47 (less taxes). It also identifies pricing across the other eighteen price categories. In the meantime, the report noted the differential between average pricing for one-hour usage in Europe, and 24-hours is only 8%. 'Retail prices for public Wi-Fi in Europe remain quite high although there is some evidence of overall decline, but it is slight,' commented Philip Low, managing consultant at BroadGroup and report author. The report also assessed hotspot deployment and found that around 71% of hotspots reside in only 5 countries in Europe. 'The remainder of countries covered in the report have deployed less than the benchmark. Put starkly, Europe and Eastern Europe combined have a lower hotspot population than South Korea. Execution of the announced deployment plans over the next twelve months will really determine the future of public Wi-Fi across the region.' Evidence cited in the report continues to suggest that service providers are still experimenting with tariff categories. Despite apparently unsustainable pricing by some WISPs, there is an increased focus on standardised products suggesting that market is already moving towards commoditised products. There is also evidence that the drive for subscription-based businesses and repeat revenues, has led to an increase in certain tariff categories. The report identifies a clear relationship between pricing and deployment. It believes that the degree of pressure on prices in Europe over 2004, will relate directly to the number of hotspots deployed, and the willingness of service providers to entertain, and ability of aggregators to secure further roaming agreements. Conversely this scenario also suggests consolidation pressures will mount and some service providers will find their models are unsustainable. Deployment also impacts the opportunity for a wholesale market to grow and with it a potential reduction in price levels, and development of consumer propositions.

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