A new JupiterResearch study reports that the adoption of public Wi-Fi by the online population increased 43 percent from 2004 to 2005 - from 14 percent of online users to 20 percent. According to Jupiter's new report, "Public Wi-Fi: Capturing Paying Customers in an Increasingly Competitive Space," 58 percent of online public Wi-Fi users use hotspots only when they are free.

The top two inhibitors to hotspot use by consumers, ahead of cost, are lack of (1) user need and (2) equipment. Wi-Fi service providers need to focus on capturing mobile professionals and home wireless network owners, according to Jupiter.

"While the adoption of public hotspots is growing rapidly, willingness of consumers to pay for access is not keeping pace," said Ina Sebastian, associate analyst at JupiterResearch. "Business users are most likely to pay for use, but there isn't enough frequent use to drive adoption of subscription models yet."

"Low demand for paid public access and alternative access options limit revenue and pose risks associated with investing in more infrastructure," said David Schatsky, president of JupiterKagan. "However, our research reveals significant opportunity for Wi-Fi service providers and provides recommendations for alternate additional revenue streams, which can alleviate limitations of a consumer-centric revenue model."