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Wi-Fi hotspot casualties in South African 3G boom

South African companies are turning away from Wi-Fi, with high costs partly to blame

A recent study carried out by South African research firm World Wide Worx claims that corporate workers are shunning Wi-Fi access networks, such as Wi-Fi, in favour of 3G networks.

The report, which studies the use of mobile technology among the consumer and SME segments, claims that the fall has been especially acute in the last three years.

"We have been warning for several years that commercial Wi-Fi hotspots, especially in hotels and conference centres, are in danger of pricing themselves out of the market," said World Wide Worx MD Arthur Goldstuck.

"Now that a monthly subscription to a basic 3G service is cheaper than a few hours on most commercial hotspots, the chickens have come home to roost," he added.

The report found that South African corporations whose staff used 3G data cards rose annually to 82% in 2007 from 58%. In contrast, the number of corporations whose staff used Wi-Fi to access the internet fell from 74% to 66% during the same period.

World Wide Worx analysts noted that Wi-Fi deployment among SMEs had fallen slightly during the surveyed period but noted that the majority of SME respondents were using Wi-Fi to network their offices more efficiently, rather than enabling their staff to use it in wireless hotspots.

In contrast, the use of wireless broadband services by SMEs jumped from 16% in 2006 to 31% in 2007. The report also noted that most SMEs are using 3G services to keep their mobile workforces connected rather than as a primary form of connectivity.

Goldstruck also noted that "exorbitant pricing" and outdated business models of hotspot companies were to blame for the waning fortunes of Wi-Fi technology and added that WiMAX uptake was contributing to the trend.