Latin America: Will the Wi-Fi craze catch on in the region?

Key points:

• By year-end at least 20 operators in the region will have launched Wi-Fi, albeit most with limited coverage, totalling some 350-400 hotspots
• Low laptop and PDA penetration remains the first barrier to Wi-Fi adoption in the region
• The culture of university or company campuses, which is common in the US, is rare in Latin America, as is the US concept of the suburb, which also enables Wi-Fi networks
• In large cities like Mexico City, São Paulo and Bogotá, security concerns make people wary of carrying their laptops with them to public places such as coffee shops, where connection hotspots exist

The Wi-Fi--wireless Internet connection--buzz is hitting Latin America with full force. Operators are offering Wi-Fi throughout the region, announcing hotspot deployments or evaluating if and how Wi-Fi might fit into their portfolio of services, says Business Latin America

Amid the Wi-Fi hype invading the region, Pyramid Research, a US telecoms consultancy, has taken a step back to analyse briefly the main challenges ahead in Latin America for this new service and point to some promising growth areas.

• The Wi-Fi craze is on. Operators like Telmex (Mexico), Oi and Brazil Telecom (Brazil), and Telefónica CTC and Manquehue (Chile), among others, have launched Wi-Fi plans in their respective markets, while others are announcing deployment plans and regulators are working hastily to set up frameworks of rules to oversee those offering the service. Pyramid expects that by year-end at least 20 operators in the region will have launched Wi-Fi, albeit most with limited coverage, totalling some 350-400 hotspots
• Big barriers remain. Despite widespread optimism about the revenue-generating potential of Wi-Fi, a number of strong hindrances to its adoption remain in Latin America. Although we expect laptop usage to increase, low laptop and PDA penetration remains the first barrier.

  Second, the culture of university or company campuses, which is common in the US, is rare in Latin America, as is the US concept of the suburb, which also enables Wi-Fi networks. And third, in large cities like Mexico City, São Paulo and Bogotá, security concerns make people wary of carrying their laptops with them to public places such as coffee shops, where connection hotspots exist

• Short-term opportunities. Operators throughout the region are trying out different business models for Wi-Fi, ranging from free bundling with DSL services to Wi-Fi access using prepaid cards. Pyramid believes that in the short term the prime opportunity lies in private Wi-Fi networks rather than public hotspots. The business sector and high-end residential users--both of which are Internet savvy, value the advantages of mobility and are likely to have laptops or handheld devices--will be the early adopters who will fuel short-term growth

However, these clients, especially the former, do not represent a large or captive audience, which makes it increasingly difficult for operators, because equipment vendors will also be targeting business customers to sell them Wi-Fi network solutions directly.

Source: Business Latin America.