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Analysts predict wireless hot-spot crash

The resources being spent on wireless LANs for public areas is being wasted, according to Forrester analysts, who predict that Bluetooth technology will surpass Wi-Fi.

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, in the future, there won't be enough people using Wi-Fi devices to support the operators that are currently introducing wireless local area networks (WLANs) and hot spots, which are places where wireless Web access is available to the public for a fee or for free.

"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, a 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," he said.

According to Forrester, there will be just 53 million Wi-Fi-enabled laptops and personal digital assistants (PDAs) in use in Europe by 2008. In addition, only 7.7 million people who use them will be prepared to pay to use Wi-Fi wireless hot spots. Wi-Fi networks create a 300-foot zone where laptops can wirelessly connect to the Web or to a corporate computer network.

"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," Godell predicted. "Additionally, the sky-high costs of providing Internet backhaul from hot spots will kill many hot-spot business cases."

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 rumors that user take-up is below expectations.

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

Theo Platt, director of U.K. hot spot provider 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 within a much smaller range than Wi-Fi.

"Wi-Fi is the superior technology over Bluetooth for public access," he said. "The range is greater--Bluetooth's is 10 meters, compared (with) 100 meters for Wi-Fi. The bandwidth is greater, and more users can use one access point at once...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."

ZDNet UK's Graeme Wearden reported from London.