US operators could drive down UK Wi-Fi prices

The arrival of Wi-Fi access providers such as Boingo and IPass in Europe will drive down prices and force home-grown operators to improve their offerings.

That's the conclusion of a report into Europe's Wi-Fi pricing published this week by analyst firm BroadGroup.

It has found evidence that the different Wi-Fi tariffs on offer in major markets such as the UK are converging in response to increased competition from the US companies. There is currently wide variation between the product ranges of different Wi-Fi operators, but BroadGroup thinks this will have to change, especially as it believes some pricing is "unsustainably high".

BroadGroup points out that most pricing is aimed at corporate users, and is therefore higher than a consumer could realistically be expected to pay. The arrival of Wi-Fi aggregators from America - giving users access to multiple networks in return for a single fee - could force operators to lower their prices in order to take part in the potentially lucrative aggregation market.

Philip Low, managing consultant at BroadGroup and report author, said in the study: "Retail prices for public Wi-Fi in Europe remain quite high although there is some evidence of overall decline, but it is slight. Entry by North American players with significantly lower price levels, although very limited at present, could impact and extend over time."

The average cost of an hour's Wi-Fi from a European operator, according to BroadGroup, is €6.47 before taxes.

Last October, Wi-Fi access provider Boingo Wireless added UK network operator The Cloud to its alliance of Wi-Fi networks, while IPass teamed up with Swisscom Eurospot in December 2003.

Graeme Wearden writes for ZDNet UK