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Don't price Wi-Fi to death, operators warned

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Mobile phone networks have been warned not to harm their future revenues with data tariffs designed to give the ailing WLAN hotpot business a death blow.

AT&T Wireless, which now boasts EDGE-speeds on most of its stateside GSM/GPRS network, recently launched an all-you-can eat data plan for $24.99. By comparison, WLAN provider Boingo charges $21.95 a month and the Surf and Sip network $20 a month, if the subscriber takes out an annual subscription. But that three dollars a month brings a lot of extra convenience: in most of the larger urban areas the users can pick up a signal anywhere: there's no need to find a Starbucks or McDonalds. (Your reporter even found five bar GPRS coverage deep in the Louisiana swamp, miles from the nearest small town.)

But telecomms analyst Analysys doesn't think that carriers will be able to compete with Wi-Fi hotspots and achieve adequate 3G revenue per Mbyte simultaneously.

"It is critical for mobile operators to be active in the hotspot business," says Analysys, although why carriers are being urged to lose even more money isn't entirely clear. T-Mobile is the best known example of a carrier developing a HotSpot strategy in parallel to its cellular data network.

But carriers might find it's an itch they can't help but scratch. Most of their data revenues still come from text messaging, while their 2.5G and 3G networks have been built and (mostly) paid for. They want someone, in fact, anyone, to come. Historically, too, utilities only prosper when they offer flat fees. Which belatedly, the networks have just begun to do.

In May, Cometa became the highest profile casualty of the Wi-Fi bubble when it went under having built only 250 out of a projected 20,000 hotspots.®

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