Wi-Fi hotspots are a growing threat to 3G data revenues

Paul Rasmussen
The recent crowd-sourced survey conducted by the BBC of UK 3G coverage seemed to question the claims from the leading mobile operators that their network coverage was at least 90 per cent.

Individual users have complained about the poor coverage in both rural and urban environments before, however this survey was very comprehensive and involved over 44,000 UK residents and collected 1.7 million hours of data from 42 million locations.

UK operators have downplayed this unprecedented level of investigation, albeit accepting that it was an ‘interesting experiment.' But perhaps they should be aware that alternative providers are keen to grab a share of high-speed data revenues.

The threat to mobile operators is coming from the ongoing rise in Wi-Fi hotspots being deployed across the UK by heavyweights such as BT and the satellite TV broadcasters BSkyB.

BT, which has to ambitions to re-enter the mobile market (having sold off Cellnet, now O2, some years ago), now has more than three million Wi-Fi hotspots as part of its Openzone network. The company also recently announced a deal with Dutch brewer Heineken that will see nearly 300 pubs being Wi-Fi-enabled by the end of 2012.

BSkyB, which acquired more than 4,000 hotspots when it purchased The Cloud earlier this year, has now added more locations bringing its total Wi-Fi hotspot penetration to over 5,000 sites. Of note, the pay-TV company says it is talking to the many thousands of pubs and clubs that offer the Sky TV service about providing a free Wi-Fi capability, leaving it to the pub and club owners to decide whether to charge their customers for access.

Outside of this, announcements last week from the low-cost hotel chain Travelodge and the coffee shop group Caffe Nero to offer free Wi-Fi is yet more evidence of how the technology is being used by firms to attract customers to their venues.

One operator, O2 UK, is at least aware of the threat and has made some progress in building its own Wi-Fi network that it claims will be free to the public. The company said its national service has been completed having installed access points across its chain of retail stores. However, it remains to be seen whether the company's 450 shops can provide national coverage.

Operators need to closely monitor these Wi-Fi offers because I believe they will prove to be attractive to users that have become frustrated by the lack, or poor performance, of 3G data services and the complexity of data tariffs. --Paul