O2 plans UK-wide wi-fi network

Mobile operator O2 is launching free wireless in the UK, which it promises will be double the size of existing networks by 2013.

Initially the hotspots will be available in 450 O2-owned sites but will be expanded to other locations, including shops and restaurants.

Previously 02 had offered free wi-fi on some of its tariffs via BT Openzone and The Cloud.

The Cloud is rumoured to be close to sealing a buy-out deal with Sky.

O2 said access to the hotspots would be through a simple sign-up process and would be free to both 02 and non-02 customers.

For Jeremy Green, a principal analyst with Ovum, the move is a "step in the right direction" to sorting out 02's capacity issues, brought about by high iPhone ownership and the increasing desire for data on the move.

"450 sites is not fantastic coverage and wi-fi isn't something that smartphone users will be able to rely on but it is a gesture in the right direction," he said.

He said it was "surprising" that O2 was prepared to offer it free to non-customers, something the firm is hoping to fund via advertising.

In a swipe at BT's Fon network, which offers connections which piggyback on BT home broadband networks, O2 said that its service would offer "premium public hotspots, as opposed to using residential connections with limited bandwidth".

BT's Openzone and Fon networks are currently the biggest networks in the UK.

The second largest The Cloud claims to have around 22,000 hotspots.

BT recently launched an iPad app allowing its broadband customers to gain access to wi-fi hotspots around the country.

It already has Android and iPhone apps, which has proved popular, attracting 400,000 downloads.

Rival Virgin Media is also toying with the idea of creating a nationwide wi-fi network.

O2 wants to help kick-start more wi-fi usage.

"Only 20% of people who have access to free public wi-fi on 02 tariffs actively use it despite the majority of devices being wi-fi enabled," said O2's business development director Tim Sefton

"We know that wi-fi as a technology has great potential and can be a very fast service, however customers are discouraged by barriers which include complexity in activation, uncertainty of where wi-fi is free and the variable quality of the current experience," he added.

Mr Green said that 02's wi-fi network would have to go hand-in-hand with other network upgrades.

O2 said that it is continuing to invest in its existing network but Mr Sefton confessed to UK technology news site TechRadar that it would be "years rather than months before we'll have a commercial 4G network".