Britain hottest in Europe for Wi-Fi

The UK is leading Europe in the race to spread wireless Internet access - despite predictions of a Wi-Fi bust

Britain is leading Europe's boom in the deployment of wireless Internet hot spots, according to a report published on Wednesday, even though many industry observers agree that the technology does not yet have a satisfactory business model to back it up.

The study from research firm Gartner estimates that across Britain the number of Wi-Fi hot spots -- areas such as cafes and airport lounges where users are able to connect to the Internet via wireless networking equipment -- will reach 4,100 this year. Gartner said 456,000 Britons will use hot spots this year, rising to 1.5 million by 2005.

The figures place Britain at the top of the European league tables for public Wi-Fi growth. Britain will have 27 percent of Europe's hot spots by the end of the year, ahead of Germany's 23 percent.

However, this distinction may not be the honour it first seems, as some analysts believe the money being poured into installing Wi-Fi hot spots is mostly being wasted. Analyst group Forrester believes that there won't be enough people using Wi-Fi-enabled devices in the future to support the operators that are rolling out wireless local area networks today.

According to Forrester, there will be just 53 million Wi-Fi-enabled laptops and PDAs in Europe by 2008, of which just 7.7 million users will be prepared to pay to use Wi-Fi hot spots.

"Simply, basic constraints on the number of devices in use and users' willingness to pay a significant amount for Internet access on the go will limit public WLAN users to numbers well short of planned networks' carrying capacity. Additionally, the sky-high costs of providing Internet backhaul from hot spots will kill many hot-spot business cases," predicted Lars Godell, Forrester senior analyst, when the Forrester figures were released in June.

Many figures in the Wi-Fi industry argue that the business model of charging a monthly fee for access to a wide-ranging network of hot spots is flawed, saying that instead access should be offered for free, as a customer incentive, like air conditioning and piped-in music.

In Britain, companies ranging from pub-game operators to train firms are rushing to offer hot spots.

Train operator GNER is looking to enable a fleet of up to 40 high-speed trains with high-speed Internet access on its London Kings Cross to Aberdeen and Inverness route.

BT's wireless ISP, Openzone, has forged deals that give its customers access to hot spots across Europe and the US, as well as to a UK network called The Cloud.

Inspired Broadcast Networks in March announced that it was planning to launch 3,000 wireless LAN hot spots this year, forming a network it has named The Cloud. Many of these Wi-Fi hot spots will be based in pubs, as Inspired Broadcast Networks is planning to connect its wireless equipment to gaming machines that already have a broadband connection.

ZDNet UK's Graeme Wearden and's Andy McCue contributed to this report.