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Businesses Have Lukewarm View Of Wi-Fi Hot-Spots

Even with tens of thousands of hot-spots available to mobile workers, analysts say adoption of the technology among businesses has been slower than expected.

Wi-Fi hot-spot services are popping up everywhere, and wireless carriers say they're seeing steady increases in subscription and usage of Wi-Fi hot-spots. Yet even with tens of thousands of hot-spots available to mobile workers, analysts say adoption of the technology among businesses has been slower than expected.

Last week, Nextel Communications Inc. joined the market with a new Wi-Fi hot-spot service designed especially for mobile businesspeople. The carrier teamed up with Boingo Wireless Inc. and Wayport Inc. to provide businesses with access to more than 7,000 hot-spots in airports, hotels, convention centers, retail stores, and other locations in North America.

More than 80% of wireless carriers now offer hot-spot services, according to research firm Gartner, and some wonder whether the market needs another provider at this time. "This is a strange time for Nextel to be getting into the space because the big hot-spot land rush happened about 1-1/2 to two years ago," says Michael King, principal analyst at Gartner. Adoption of Wi-Fi hot-spot services has been relatively slow over the past few years and not many businesses are using hot-spot services for mission-critical applications, King says.

Companies are still concerned about network security and accessing business systems through Wi-Fi hot-spots. "One problem is that individual users tend to turn off the firewalls set up by the company to increase throughput, and this gives CIOs really little control over how employees use Wi-Fi," Yankee Group analyst Roberta Wiggins says.

T-Mobile, one of the first hot-spot providers, built its own infrastructure in 2002 and now operates the T-Mobile HotSpot Network in more than 5,600 locations throughout the United States, says Mark Bolger, director of brand marketing for the T-Mobile HotSpot Network.

Sprint Corp., which entered the market in September 2003, offers PCS Wi-Fi Access to its business customers. The service is available in 19,000 public locations, and Sprint plans to raise that number to 25,000 hot-spots by the end of this year, says Wes Dittmer, general manager of wireless LAN services at Sprint.

But despite these efforts, there may not be enough hot-spots for some businesses to feel comfortable standardizing on Wi-Fi for remote wireless access. Over the last three months, construction-management and general-contracting firm Barton Malow Co. deployed Wi-Fi networks for internal use at six of its offices. Now employees are asking for a better and faster way of connecting to the Internet when they're working remotely or traveling. Barton Malow CIO Phil Go has been evaluating Wi-Fi services from Wayport and other providers, but he's not convinced it's the right way to go. "Wi-Fi coverage is not everywhere, and although there are a lot of different carriers that provide Wi-Fi, services tend to be spotty," he says.

Many businesses are turning to EV-DO, short for Evolution-Data Optimized, as an alternative. EV-DO is the third generation of high-speed data enhancements to the Code Division Multiple Access cellular technology and offers data-download rates of up to 2.4 Mbps. Unlike hot-spots that are scattered throughout various locations such as coffee shops, hotels, and airports, EV-DO provides coverage just about anywhere there's a cellular signal, which is an attractive offering for a traveling businessperson, Wiggins says. "We never anticipated Wi-Fi hot-spots to be huge and the adoption has been slower than initially anticipated, partly because EV-DO is now being provided by the big carriers," she says.

In fact, Verizon Wireless used to offer a Wi-Fi hot-spot service in partnership with Wayport, but has since replaced it with an EV-DO service because customers were asking for constant availability instead of "coffee-shop-type" connectivity, a Verizon Wireless spokesman says. Barton Malow's Go agrees: "With cellular-type technology, you have coverage just about anywhere in the country, but with Wi-Fi there are still limitations."

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