O2 Offers Free Wi-Fi For All – With Ads

O2 has promised free Wi-Fi from a network of hotspots greater than the combined forces of BT Openzone and The Cloud – in exchange for users’ mobile numbers.

The offer is a “game changer”, according to O2, because it will be free for everyone, whether they are an O2 customer or not. The scheme starts with free Wi-Fi at O2 shops, and will eventually replace O2’s curent deals to provide Wi-Fi through BT Openzone, and the Cloud – a Wi-Fi provider which BSkyB is rumoured to be about to buy.

Venue owners pay to offer Wi-Fi?

“O2 is aiming to create a scaled Wi-Fi platform that will be at least double the number of premium hotspots currently offered by BT Openzone and The Cloud combined by 2013,” says O2’s release, neatly signalling the ultimate fate of its current partnerships.

O2’s release does not give a figure for how many hotspots it will have, but the figure must be around 15,000 hotspots, since we understand that BT and The Cloud currently have around 7,500 hotspots between them, according to the has Financial Times.

The rollout starts with O2 stripping out 450 hotspots currently provided by The Cloud in its shops and offices. Beyond that venue owners such as restaurants are expected to join the scheme through “partnerships” – apparently paying money to do so – in order to boost their business.

O2 customers will get the service automatically, and other users can sign up, sending a text to register. After this, the user will get what O2 calls  “relevant timely content that customers want” and we would call adverts, which we understand could be sent whenever their device tells O2 the user is passing a hotspot.

Can Wi-Fi save the 3G operators?

Wi-Fi has been proposed as a means to reduce the strain on overloaded 3G networks, caused by unrestrained use of smartphones, by providing another channel to download content. 3UK has commented that if it does not get more 3G bandwidth it will be in trouble.  Sky’s rumoured purchase of The Cloud would allow Sky subscribers to view video on the move, according to speculation about the deal.

The move signals the changing role of Wi-Fi, which is now a tool for brand awareness rather than a standalone service, but this will still increase demand for Wi-Fi, according to vendors. “What originally started as a Wi-Fi offering via third-party networks is evolving to a scenario whereby service providers now want to own these networks; to maintain control over the quality of the network and deliver an excellent user experience that reflects positively on their brand,” said Bernard Herscovich, CEO of outdoor Wi-Fi specialist BelAir Networks

It is difficult to pin down precisely how many hotspots O2 and the Cloud have. One year ago, BT claimed to have 3,800 “premium” (ie, standalone) hotspots, but now bundles this figure in with about 200,000 “Fon” hotspots that are offered on top of Office Hub routers in use by businesses, and possibly as many as 2 million Fon hotspots offered on domestic users’ Home Hubs.

O2’s release contains a not-so-subtle dig at these Fon offerings: “All [O2] hotspots will be premium public hotspots, as opposed to using residential connections with limited bandwidth.”

The Cloud did not respond to our request for numbers and comment, but is understood to have about as many hotspots as BT Openzone.