BT plans wi-fi world-beater

BT Group is attempting to create the world's largest wi-fi network by persuading millions of UK customers to turn their home wireless "hubs" into public hotspots.

The move could create blanket urban wi-fi coverage, and allow the fixed-line operator to compete at least partially with mobile phone operators in offering internet services on the go.

"It is a potentially disruptive move. BT may see this as an opportunity to get into the mobile market through the back door," said Ben Wood, analyst at CCS Insight.

At present most people mainly use wi-fi to connect their laptop computers to the internet, without wires, in their homes or offices.

Other, more portable devices - such as Apple's iPhone and Nokia's N95 handsets, the Sony PlayStation Portable and Nintendo DS handheld console - could also access the internet through a wi-fi connection. However, there are only an estimated 10,000 to 11,000 hotspots around the country.

The 3G mobile phone networks, operated by companies such as Vodafone, offer more widespread coverage for mobile broadband.

A country-wide wi-fi network could boost take-up of BT's Fusion phone, which allows customers to switch between fixed-line, wireless and mobile networks.

The attraction for customers is getting cheaper calls over a wi-fi connection, but, with few wi-fi hotspots around, uptake of the phone has been slow, with only 40,000 sold to date.

"It won't take over overnight, but over time wi-fi will chip away at the mobile network," said Gavin Patterson, BT's managing director for consumer operations.

In exchange for opening up a part of their network for public use, BT broadband customers will get free access to the network across the country, BT's 2,000 existing public hotspots and to more than 190,000 hotspots operated around the world by FON, the Spanish wireless start-up with which BT has worked on the project.

BT has taken a "significant stake" in FON, alongside other investors such as Google and Skype.

About 3m customers who have BT's two most expensive broadband packages will be eligible to join the wi-fi network. About 2m of these already have BT's "Home Hub" wireless router, which will allow them to share part of their broadband access with the public.

BT security software would keep separate the two parts of any such network.

The way forward

Plans by local authorities and private companies to build wirelessnetworks have proliferated in the last 18 months as broadband becomes the way for businesses and consumers to access the internet, writes Philip Stafford .

The City of London has its own wi-fi network, run by privately owned The Cloud, while Manchester City Council plans to launch a 100-square-mile wireless network. Both Truphone and Vyke Communications run services that cut the cost of mobile calls by routing calls over the internet.

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