Wi-Fi hotspots haven’t turned into the immediate cash cow that Chinese fixed-line telecom operators expected. Hotspot deployments are slowed down by a series of factors, including low adoption rates and uncertainty over Chinese government plans to introduce a national standard for WLANs that was not compatible with 802.11 and badly-design service offerings.
For example, websurfers of Beijing can get Wi-Fi access at Starbucks, provided by China Netcom. But the service is hampered by a lack of familiarity with the service among the coffee shop staff and a payment system that first requires users to buy an access card in a Netcom customer service center, at a cost of US$3.62 per hour. And the thing is there aren’t many of these customer service centers around in Beijing.
China Mobile Communications Corp., the country’s largest mobile operator, has done a better job. While other operators have slowed rollouts of Wi-Fi hotspots, China Mobile has added 518 hotspots nationwide over the past nine months, bringing its total to 1,431 hotspots.
The key to this success is the payment system: users willing to access the Internet from one of China Mobile’s hotspots simply enter their China Mobile telephone number. The operator then sends an SMS message with a password to the user’s handset and cost of accessing the hotspot is billed to the user’s phone account.
The future of hotspots in China is still unclear. While deployments have recently slowed down, the market for these services could grow as the number of hotspots increases and operators refine and improve their service offerings.