Wi-Fi Week: Should all hot spots be free?

BT is allowing free access to its Openzone Wi-Fi network this week, but is it really sensible to charge money for wireless networks? One operator believes it has evidence that very few Wi-Fi users are prepared to cough up

On Monday, BT launched its wireless broadband week. Anyone visiting one of its 1,700 Openzone Wi-Fi hot spots between 26 January and 1 February will be entitled to free, unlimited access to BT Openzone for seven days.

This scheme is meant to drum up more interest in Wi-Fi from the public, especially laptops owners who might fancy working or surfing the Web from a coffee shop, railway station or hotel.

But many in the industry fear that the UK's Wi-Fi market is in need of more than just a short-term freebie. Take-up is rumoured to be very disappointing -- often, if you log on at a Wi-Fi hot spot, you'll find you're the only person on the network.

That's great news if you want lots of bandwidth but rather grim for the likes of The Cloud, Surf and Sip, T-Mobile and Swisscom Eurospot. Since June 2002, when the government made it legal for companies to run commercial Wi-Fi networks, many operators have joined BT in rolling out services across Britain.

It's hard to say precisely how well or badly these services are performing, as the companies are notoriously reluctant to give out usage figures. But both anecdotal evidence and occasional whispers from insiders suggest that take-up has been poor.

There are a variety of reasons why commercial Wi-Fi is failing to set the UK alight, and during this week ZDNet UK will address them in turn.

One key factor is price. It normally costs about £5 to get 60 minutes of Wi-Fi access. Compare that to the £1 you'd expect to pay for an hour at an Internet cafe, where you aren't even expected to bring along your own machine. A monthly pass can set you back more than £80 -- more than you might pay on hire purchase for a laptop -- even though you'll gain access to only one network (more on this topic later this week).

Analysts such as Ross Pow of Analysys Research have already warned that Wi-Fi prices are too high.

But making the technology a bit cheaper might not be the answer.

Theo Platt, director of wireless operator Broadscape, believes he has evidence that charging for Wi-Fi access simply may not be sustainable.

Broadscape runs a number of "virtually free" hot spots for the Benugo's sandwich chain, where customers who spend a couple of pounds on their food and drink get 30 minutes of free Wi-Fi access.

Platt says that another chain of eateries took up the "virtually free" model from Broadscape, but then changed their minds and insisted on charging customers for their Wi-Fi. The result, Platt says, was a plunge in take-up.

"Once they started charging £4 per hour for Wi-Fi access, they got almost ten times less usage," Platt told ZDNet UK. "Where Benugo's was getting 10 Wi-Fi users every day, this company, which has very similar sites, was getting just one".

According to Platt, there are a certain number of premium sites where charging for Wi-Fi will work, such as airports and some hotels. However, the UK has only a limited supply of such places, with most already grabbed by an operator. This means that Wi-Fi providers have had to cast their net wider.

"BT has a roaming deal with The Cloud, which gives them a lot of pub hot spots. They're not ideal sites for commercial Wi-Fi. I think that eventually someone's going to take a look at BT's figures and say 'oops'," Platt predicts.

"We'd love to see the figures of other Wi-Fi operators, but based on our own numbers, I'm not convinced that the pay market works."

Last year, Forrester Research claimed that most of the money being spent on commercial Wi-Fi networks was being wasted, as there simply won't be enough users in the future for operators to make their money back.

Platt, too, believes that many of the predictions made by Wi-Fi's supporters were wrong, admitting that his own company is less bullish about future prospects than it was a year ago.

"A lot of people expected Wi-Fi to become a mass-market product, but it's still largely just a business market," explained Platt.

Wi-Fi could become the air-conditioning of the 21st century -- something you expect to find but wouldn't dream of paying extra for. Howerver, if it isn't a money spinner, then some operators could soon start taking the dot-com road to oblivion. And, while a future of free hot spots is great news for users, if companies don't think they can make money by offering wireless access, they probably won't bother.