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Analysts predict Wi-Fi crash

The money being spent on the rollout of 802.11b networks has been compared to the excesses of the dot-com boom, with Wi-Fi tipped to play second fiddle to Bluetooth
Written by Graeme Wearden, Contributor

Most of the money that is being spent creating public wireless hot spots is being wasted, according to research published on Thursday.

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.

"With all the hype today about the rollout of WLAN public hot spots, it's as if the dot-com boom and bust never happened," said Lars Godell, Forrester senior analyst.

"We believe that much of the money being poured into public WLAN today to enable access -- from places as diverse as bars, marinas, hotels, and airports, as well as train, bus, and metro stations -- is being wasted."

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," Godell predicted.

As ZDNet UK reported last month, there is growing concern within the Wi-Fi industry that operators are not offering the kind of pricing models that will attract users. There are also rumours that user take-up is below expectations.

Forrester predicts that Bluetooth will be much more widespread than Wi-Fi, and expects there will be 286 million Bluetooth-enabled devices in Europe by 2008.

Broadscape has begun offering virtually free Wi-Fi hot spots at sandwich bars in London, where customers get 30 minutes free access after spending a few pounds on food or drink. These hot spots also support Bluetooth.

Theo Platt, director of Broadscape, supports Forrester's view that the business case for running a subscription Wi-Fi network is weak, but doesn't think that Bluetooth hot spots are the answer.

Platt told ZDNet UK that Bluetooth made up less than 5 percent of usage of Broadscape's hot spots, and pointed out that it works of a much smaller range than Wi-Fi.

"Wi-Fi is the superior technology over Bluetooth for public access. The range is greater, Bluetooth's is 10m compared to 100m for Wi-Fi -- the bandwidth is greater and more users can use one access point at once, as with Bluetooth you are limited to seven," Platt explained

Platt added that he agrees that Bluetooth devices will outnumber Wi-Fi devices in the future, but insisted that Wi-Fi is the "accepted and most practical method for public access."

Discover the latest developments in Wi-Fi, 3G, GPRS and other cutting-edge wireless technologies at ZDNet UK's Wireless News Section.

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