But it seems that smartphones and smart users are outsmarting the telcos, opting instead to use the built in WiFi hotspots in their phones and settling for WiFi-only tablets.

According to market research company, Telsyte, "Australia’s mobile broadband market grew by only three percent over the past 12 months to December 2013 as the proliferation of public WiFi and smartphone tethering compete with dedicated mobile broadband devices."

Telsyte senior analyst, mobility, Alvin Lee, said that telcos had achieved some success with mobile WiFi modems, but Telsyte expected smartphone tethering would continue to disrupt this market. "The opportunity for dedicated mobile broadband is diminishing even as mobile traffic continues to grow,” Lee said.

He added: "For some, WiFi tethering with a smartphone has replaced dedicated mobile broadband as people are becoming more comfortable with tethering (or sharing the mobile Internet connection with other devices). Furthermore, smart accessories like smart watches are designed to connect to the Internet through wireless smartphone tethering."

The timing of Telsyte's announcement, 19 May, was impeccable. Just a day later Telstra announced plans for a massive nationwide WiFi hotspot rollout. Telstra said it would offer all Australians, irrespective of whether they are a Telstra customer or not, access to two million WiFi hotspots across the nation within five years.

Part of the plan is that Telstra will offer its fixed broadband customers compatible gateways that will allow them to share a portion of their bandwidth with other Telstra WiFi customers in exchange for accessing other Telstra WiFi hotspots.

Telstra small business customers will be offered new network gateways and will be able to convert their fixed broadband service into a Telstra WiFi hotspot. Participating businesses will also be promoted by Telstra as a place people can visit and connect.

If this sounds revolutionary, it's not. For years now New Zealand company Tomizone has been offering a facility whereby anyone can make their WiFi hotspot available to the public. Tomizone charges the guest user a fee and remits a portion of this fee to the hotspot owner. The company started in 2006 and it now claims to have over 20,000 hotspots in its network, in over 100 countries.

Telsyte estimates that more than 80 percent of businesses with more than 20 employees operate WiFi networks that enable employees to access the Internet from their personal WiFi devices. So whether it's Tomizone or Telstra, they can now leverage that for extra income, or reciprocal benefits.


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