Sept/Oct 2003

Everybody's talking about them, but what exactly are wireless hotspots, and how soon will they move into the mainstream of mobile connectivity? Sharon Clancy offers the low-down

If you had any doubts about the speed with which business would adopt mobile working, the development of public wireless access Wi-Fi networks, or "hotspots", should help convince you.

When BT launched Openzone a year ago, hotspots seemed intriguing but far removed from everyday mobile working. Fine for corporate road warriors spending most of their time in hotels and airports, but of little practical benefit for the majority of workers. A year later, while business travellers are still the most numerous users of hotspot networks, more mobile workers are fast discovering the benefits too.

The idea of hotspots is simple. They are based on public implementations of the wireless 802.11b local area network (WLAN) standard, linked to a broadband Internet connection. The standard is increasingly called Wi-Fi, a brand name developed by the Wi-Fi Alliance, a large grouping of suppliers in this field.

 

Usually users need to be within about 100 metres of the hotspot or access point, and their mobile device needs to be equipped with a Wireless LAN access card. WLAN cards currently range from £45 to £120, but costs are expected to fall as more mobile devices become available with embedded Wi-Fi capability.

Connection speeds range from 500kbps up to 11mbps - faster than GPRS or even 3G, and also cheaper and more reliable (or that's what the advocates say).

BT has pioneered the concept in the UK, and launched its Openzone network last year. It originally planned to have 4,000 Openzone hot spots operating by 2005, but now says it will achieve this by summer 2004.

Several factors are combining to increase the appeal of hotspots. One is that more and more laptop computers and PDAs are sold as "wireless-enabled" or able to accept wireless connection cards. By the end of this year, according to Gartner, over 1.7 million people in Europe will be using Wi-Fi to connect into corporate networks.

Another spur to growth is the fact that the hotspots are proliferating at such a rate, and are now found in all manner of retail outlets including coffee shops, filling stations, hotels and restaurants.

Openzone is now installed at 1,155 UK sites, which include Hilton hotels, Welcome Break and Roadchef motorway service areas and BAA airports. Looking more broadly across Europe, Swisscom Eurospot is emerging as a key player, with over 1,000 hotspots in 12 countries. It bought UK-based Megabeam last year, adding Moat House Hotels to its network. Apart from its wide coverage, Swisscom also boasts 11 Mbits per second access speed, compared with BT's 500kbps. Other independent contenders in the UK include Broadscape, The Cloud and EnterAsys.

Another factor is that for small traders such as retailers, the hardware is relatively simple and cheap to install and maintain. Offering free Wi-Fi access is a cheap way for them to increase footfall through their premises - and hence the amount of money customers spend on other goods and services.

Pricing structures

As hotspot networks grow, two problems for users could be the lack of interoperability between the various providers, and the different payment models they employ. There are already two distinct patterns emerging: subscriber-based access and service-driven models, where the Wi-Fi access is provided free as part of an initiative to drive other revenues.

BT Openzone and Swisscom plan to charge users on the same pay-per-minutes-used basis that they currently pay to their network service providers. BT has just revised its pricing structure. Individuals can now pay £10 per month for up to 120 minutes' use, or £6 for a one-hour access pass, paid for online with vouchers or a credit card,

BT has also developed an Openzone package for large companies to enable them to set up their own public Wi-Fi network. Businesses signing up to a new corporate tariff will receive a free Openzone installation at their headquarters, enabling employees and visitors to access the Internet wirelessly at broadband speeds. Companies must sign up 50 employees and commit to "bundles" of minutes. Each user gets 15 free minutes, which can be aggregated among all users.

There is an introductory offer of unlimited use for three months at a cost of £5 per user per month. The ongoing charges are £5 per user per month, including 15 minutes' use, then 5p per minute. Customers can buy larger bundles of minutes, for which the pence-per-minute charge decreases according to the number of users and volume of minutes used.

Other suppliers think the way to increase hotspot use is to offer free access. "For independent venues, it is more likely that hotspot access will become a free value-added differentiator to capture more core business," says Jeffrey Manning, wireless product marketing manager at Enterasys networks, which developed the RoamAbout WLAN product.

"We eat at certain restaurants because of the quality and value of the food, we choose certain hotels because they have better exercise facilities. Savvy establishments have realised the same can apply to Wi-Fi. Why get the morning coffee at Starbucks? Because I can surf the Web and go through my email over a latte, something I am not yet able to at competing coffee shops."

Making the experience user-friendly will be critical, says Appear Networks, a Franco-Swedish middleware software company which aims to make Wi-Fi application downloads as easy as receiving an email. With its Click and Run software, applications can be downloaded, installed and run in a single click, then saved offline or removed later to save memory. It has been developed on the assumption that the only wireless device most users have used is a telephone, but that the majority of users are accustomed to receiving email on a desktop.

Networks join the fray

BT originally set up Openzone in conjunction with O2, but at the end of September it was due to extend access to other mobile phone network operators, ISPs and other telecoms companies. The move allows companies such as Vodafone and Orange to buy capacity on Openzone and then sell it on it to their customers. BT in effect becomes a wholesaler of hotspots.

"Wholesale has always been part of our strategy; it maximises the usage of our network and therefore the return on our investment," says David Hughes, chief executive, BT Wireless Broadband. He says this should also help stimulate the development of other companies with complementary and innovative approaches to developing this market. "And it will be a tremendous benefit to our site partners because their venue will attract not just BT customers but also those of our wholesale partners."

For the network service providers, adding Wi-Fi to their services is a defensive move. After all, they can't control WLAN growth, and their revenues could drop if more users start to use WLAN to connect to the office or Internet rather than a GPRS or 3G network.

Vodafone will begin offering Wi-Fi from BT's network early next year, while Orange has launched a three-month trial. Two of Orange's corporate customers, Cadbury Schweppes and the Hilton group, have already signed up to take part.

T-Mobile is also committed to Wi-Fi networks, and plans to have 5,000 hotspots available globally by the end of this year. It offers Wi-Fi access to customers of the Starbucks coffee shops and to Starwood hotels, including the Park Lane Hotel in London.

Some commentators believe the real key to the future success of hotpots will lie in interoperability between them and more traditional mobile phone networks, with seamless roaming between them. "Mobile workers want connectivity but not the pain of it." That's the view of Thomas Maul, vice president of sales and marketing for Gigastream, a German-based network infrastructure specialist.

"Ideally, they should be able to log on to their corporate extranet and be connected by the cheapest fastest route from their current location," he says. "That may be WLAN, GPRS or even GSM; the point is that the user should not have to decide; the mobile device will use whichever connection is appropriate to the current location."

Clearly this will require support from the network service providers and the hardware and software developers. It could take time, but they may conclude in the end that peaceful coexistence is more likely to promote growth than conflict.

And if this level of seamless roaming, using a multitude of wireless connections, seems too futuristic, remember that wireless broadband Internet access from public places also seemed gimmicky just 12 months ago