Surfing in the middle of the street

This year, wireless internet access in public places will expand greatly as new players enter the market and old ones expand their networks. In 2006, the number of hotspot operators increased and companies like Vodafone, Orange, Zapp and Euroweb operate nationwide networks with about 120 locations, according to Irinel Burloiu, Intel business development manager. The local subsidiary of Intel initiated a project in 2005 to establish a nationwide network for wireless internet access. In 2006, the company estimated the existence of more than 300 hotspots individually operated in the hotel and cafe segment.
Irish-based Free-hotspot.com plans to install in Romania several hundred free hotspots around the country in hotel restaurants and bars, gas stations and other places people pass through. Until now, most hotspots in Romania were operated by mobile telephone operators and the internet was accessed using a pre-paid code. The majority of these spots were in Bucharest hotels, in resorts and in several big cities. Hotspots were also installed in 11 universities through a program developed by Intel under which access is free.
The public authorities did not want to miss the train and announced initiatives to establish hotspots in city centers. In Timisoara, for example, wireless internet access has been free of charge in Piata Unirii for over half a year.
And installing a hotspot at a location, attracts new customers. Free-hotspot.com has installed hotspots in over 10 locations in Bucharest, Cluj-Napoca and several hotels throughout the country. The company is currently looking for partners to help with installing and maintaining the hotspots.
“I cannot give an exact number of hotspots which are going to be installed, but a total of 200 openings this year in Romania is an extremely realistic and modest target for our company,” said Joe Brunoli, vice president of Free-hotspot.com.
The service is free of charge as it will be financed from advertising revenue. “Advertising will appear on the user's screen for a few moments each time he opens a new web page,” Brunoli said. Advertising contracts with local companies will be signed when enough spots are functional. On the international level, companies like Sony, Vonage, Ford, Citroen, and Buena Vista are regular users of this kind of advertising.
The company's business model is based on its international character. The investment pays off, regardless of the response of local companies to this type of advertising. “There are companies in Dublin that wish to advertise in Romania through free hotspots: private companies such as English language schools, Multilanguage recruitment specialists and others,” Brunoli said.
Local companies which should be interested in international advertising are real estate agencies, investment companies and the tourism sector.
The investment in each hotspot goes up to EUR 100, but the company's main expenses are in public relations and marketing. In the opinion of the site's vice president, each location should generate income of between EUR 50 and 150 per month for the company and this should double in 2008. The Irish company's plans for 2008 include installing up to 1,000 hotspots in Romania.
Vodafone currently operates a national network of 39 hotspots, mainly in hotels or business centers, company officials said. Their main competitor, Orange is also targeting the places where the flow of business people is higher.
All the mobile telephony operators plan to expand their hotspot networks but not as aggressively as the Irish-owned business.
“Because of the low degree of notebook usage in Romania, the hotspot solution from Orange caters only to hotels at the moment, but we are considering expanding it to other locations too as the penetration rate of notebooks in the population increases,” Carmen Nistor, senior product manager of Orange Romania said.
Free-hotspot.com will put about EUR 20,000 monthly into advertising campaigns, while the market development funds will be much bigger and decided with the company's local partners.
Operators also expect the number of notebook sales to increase in 2007, which would facilitate access to hotspots. “Notebook sales in Romania increase by about 100 percent each year, with about 100,000 units sold in 2005, according to IDC, meaning about 400,000 units in 2007,” Brunoli said.

Roxana Mihul