Wireless access leads charge in growth of Internet services, new study shows

More than a third of Canadian Internet service providers (ISPs) will be offering wireless access to the Internet within the next 18 months, growing from the current level of about one-quarter, a new study indicates. Industry Framework of Internet Service Providers, commissioned by Industry Canada’s telecommunications policy branch and the Canadian Association of Internet Providers (CAIP), shows that by the end of next year, about 35 per cent of all Canadian ISPs will be offering wireless access to the global communications network. The report, presented to Industry Canada at the end of March and made public last week by CAIP, highlighted the current regulatory and financial plight of ISPs, particularly small- and medium-sized ones. Of all Internet providers, 44 per cent have only one to five employees. "The goal of this study should be to guide policy to ensure that the challenges do not ultimately create a predatory competitive environment for small and medium ISPs," the report indicates. "Such ISPs comprise the lion’s share of this sector and provide affordable Internet service to many Canadian businesses and households." The study, conducted by research firm POLLARA, indicates that of the estimated 940 ISPs in the country, 24 per cent are offering wireless access. For the purposes of the study, wireless is defined as cellular/PCS, satellite, MDS and/or LMCS. The study also shows that another 11 per cent of ISPs will begin to offer wireless Internet access, bringing the total number of wireless ISPs to approximately 35 per cent (see table below for complete list). According to POLLARA’s research, 4.5 per cent of all ISP subscribers access the Internet wirelessly. Current and future ISP service offeringsTypes of serviceNew services in 18 monthsCurrently provides serviceTotal (planning and currently)Newer servicesWireless Internet11%24%35%Voice over IP8%15%23%E-commerce/hosting5%54%59%E-commerce credit 2%29%31%Security (PKI)2%12%14% Other servicesWeb site hosting1%76%77%Web design/consulting1%64%65%Software/hardware sales1%49%50%Source: Industry Framework of Internet Service Providers, POLLARA Inc., March 2002Wireless tops the list of future services with voice over IP (eight per cent) and e-commerce applications and hosting (five per cent) coming in second and third, respectively. While the numbers seem to present a rosy picture for the future of wireless Internet services in Canada, the study also notes that the vast majority of Internet providers are struggling to meet financial obligations. According to the research, more than 60 per cent of ISPs have revenue of less than $1 million. Additionally, 20 per cent of ISPs are operating at a loss and nearly 40 per cent of them have margins of less than six per cent. The study also highlighted some of the major challenges ISPs are facing. The most common challenge was dealing with large network providers, which can be broken down into sub-categories: unfair competition and pricing on the part of large ISPs, and costs and difficulties associated with accessing the networks of telcos, cablecos and backbone Internet service providers.

Wireless access leads charge in growth of Internet services, new study shows

News | 06/11/2002 4:00 am EDT

To keep reading, get a free trial.

Already a Subscriber?

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us