Train 'hot spots' to hit $420 million by '08

Train 'hot spots' to hit $420 million by '08
LEDBURY, England—By 2008, train travelers are expected to spend a total of $420 million per year on in-transit wireless local-area networking (WLAN) hotspot services, according to a report from BWCS.

Within five years, some 625 million people will be traveling on WiFi-enabled trains around the world every year, according to BWCS, a market research firm based in Ledbury.

According to BWCS, as more and more prime hotspot venues-- such as airports and large hotels are signed up—attention is turning to so-called "mobile hotspots." Trains and planes have been identified as offering the biggest revenue potential because of the volume and type of passenger they carry.

BWCS' research has found that today's train hotspot solution providers have already marked out train services as low hanging fruit and are racing to sign exclusive deals with operators. For long-distance high speed train operators, onboard wireless internet connectivity enables them to offer a host of business and entertainment services.

The potential is huge in the marketplace. Rail industry figures put the volume of global rail travel at somewhere in the order of two trillion passenger kilometers in 2002. "That represents a lot of people spending a lot of time on trains without access to email or the Internet," said BWCS wireless analyst Peter Kingsland.

However, would-be service providers must look beyond the headline figures, warns Kingsland. "Right now, your average crowded commuter train won't offer a quick return on investment," he said. "This is because the primary hotspot device, a laptop, requires the traveler to be seated with sufficient time and privacy to use it. Solution and service providers need to choose their routes to ensure that they have the right passenger profile."

There are considerable technical challenges to provide these services in trains moving at 300 plus kilometers per hour. "Maintaining reliable connectivity at these speeds and through tunnels is a huge task. So far only a couple of vendors have achieved this in a commercial setting, but others are involved in trials and we would expect the number of public announcements to ramp up considerably over the next 6-12 months," he added.