Cafenet News

Hotels sign up for wi-fi

13 July 2004

13.07.2004
By PAUL BRISLEN
Telecom has finally shown its hand in the wi-fi game, launching the country's first national hotspot network for wireless high-speed internet access at 26 hotels throughout the country.

The move may spell trouble for a small band of wi-fi operators working regionally to service cafes, restaurants and hotels with wireless internet connections. Telecom is understood to be in discussions to buy at least one provider.

Telecom's Xtra customers can have a free trial of the service until the end of the month, after which it will cost $9.95 an hour. Non-Xtra subscribers must sign up for an account starting at $2.50 a month.

Telecom's head of wi-fi services, Paul Stoddart, said the service was aimed mainly at business travellers.

"This is phase one of our rollout and is aimed at those obvious destinations that the business user frequents," said Stoddart, who has defected from wi-fi start-up RoamAD.

Cafes and restaurants in Auckland and Wellington that had wi-fi hotspots had tended to provide a free service as a way of keeping customers on the premises longer. Now, said Stoddart, the model was shifting towards the business user.

Hotels in the Millennium, Copthorne and Kingsgate chains, and the Sebel hotel in Auckland, would offer the Telecom service in lounges and lobby areas. Stoddart said Telecom had also discussed extending the service to guest rooms.

"Doing it this way means hotels can find out about the costs and benefits of offering the service before committing to a large-scale rollout." Stoddart said the next stage would depend on user feedback.

"We're not going to build it just for the sake of it," he said.

"We want to hear from customers where they'd like to see the service delivered."

Stoddart sees the wi-fi strategy as complementary to Telecom's planned cellphone network upgrade, which will offer much faster cellular connection speeds than are currently available.

Telecom's strategy is already being used by the country's first large commercial wi-fi service provider, CafeNet, which was launched in Wellington in 2002 by CityLink.

CityLink's sales and marketing manager, Damien Fahey, said CafeNet targeted conference facilities and event centres.

"Transient tourist customers are fine but most use is in the business market."

Fahey said CafeNet was commonly used by business people connecting to their office networks.

They demanded a high level of data security, which CafeNet was catering for with "virtual private networks".

Telecom would also offer virtual private networking. .

Fahey said CityLink had offered its services to Telecom, TelstraClear and Vodafone as a network provider, and was continuing its talks with Telecom.

Auckland wi-fi provider Reach Wireless is also talking to Telecom about a possible partnership, according to general manager Steve Simms.

"Margins are pretty thin in the wi-fi industry," said.

"It takes a strong person to stand up to Telecom so we're discussing working with them instead of against them."

Reach Wireless has hotspots in central Auckland and also allows users to connect with CafeNet in Wellington.

"Our model is different from Telecom's," Simms said.

"Ours is casual instead of subscriber-based."

Reach customers can sign up and pay as they go using a credit card, instead of requiring an account.

Simms hoped that would appeal appeal to a wider range of customers.

He said the company's three core markets were apartment buildings, property developers and tertiary campuses.