The NSW government has scrapped plans to offer free Wi-Fi in Sydney, citing spiralling costs and overseas failures for killing the project.
NSW Minister for Commerce Eric Roozendaal said yesterday the project would be scrapped after repeated delays with the Expression of Interest (EOI) process and the closure of a number of city-wide Wi-Fi networks overseas.
"What's clear from the EOI is that the market believes the delivery of free wireless broadband is not practical for the Government at this current time — based on technical and financial grounds," said Roozendaal in a statement.
"The Department of Commerce received 15 responses to the EOI process and while they were diverse and innovative, none could establish a clear benefit for NSW taxpayers," he said.
Wireless provider Unwired had been tipped for some time as the leading contender in the bid.
The NSW state Labor government first declared its intentions to set up a CBD-wide Wi-Fi network in Sydney in late 2006, and had also planned to establish coverage in other business centres across greater Sydney such as Parramatta, Penrith and Liverpool, as well as Newcastle and Wollongong.
"Universal access to wireless broadband in our CBDs will further boost the state's economy and make NSW more attractive for expanding or new businesses," said NSW Premier Morris Iemma in 2006.
However, NSW Commerce Minster Roozendaal yesterday said that the decline of similar initiatives in San Francisco and Paris was a major reason for scrapping the project in Sydney.
"The overseas experience is that large-scale Wi-Fi projects have proved ineffective in meeting the needs of local businesses and the community.
"Most schemes sponsored by overseas governments have collapsed and require further funding to the tune of tens of millions of dollars. With technology changing so quickly, I cannot expose NSW taxpayers to that sort of risk," said the Minister.
Senior telecommunications analyst for research firm IDC, David Cannon, said he was "not surprised to hear these plans have been cancelled", given the cost of deploying Wi-Fi networks en masse. He said Los Angeles had also feted a similar initiative but decided not to go ahead with it.
"The return on investment really is quite feeble, especially in a country like Australia and a city like Sydney, where there's multiple 3G networks and existing hot spots in libraries and cafes," said Cannon.
"In all reality they'd [NSW government] be facing very stiff competition from the 3G market, which would arguably provide a better service ... they'd be struggling to compete against that kind of infrastructure," Cannon added.
"The popularity of BlackBerry's and other similar handheld devices is already challenging the use of Wi-Fi for portable computers," according to Roozendaal.
"Major telecommunications companies now have multiple products out on the market and are already developing and implementing their own wireless broadband services," he added.