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Cities across the world are racing to establish a “network” of hotspots that allow business people on the move to connect to the internet – using technology that was never designed for city-wide networking.

It will not be long before workers will be able to connect anywhere, any time and this extra mobility could force businesses to see themselves differently.

“Technology is ahead of people’s ability to use it,” says Chris Bray, a solutions executive at IBM. “To take full advantage companies will have to think and work differently.”

The technology in question is Wi-Fi, or wireless networking. It is popular because the equipment is cheap, operators do not need a licence, and almost every laptop being sold is Wi-Fi capable.

It is already widely used by companies – 91 per cent of businesses have installed it or are planning to, according to Gartner, the research company. It is also common in homes, airports, hotels, cafés and bars.

But now cities are getting in on the act: two of the first networks, in Philadelphia and Tempe, Arizona, are being completed this year. Soon, almost every big city from San Francisco to London to Singapore will have city-wide networks.

This is in spite of the fact that under normal operation, Wi-Fi signals have a maximum range of about 90 metres and can be hampered by stone walls, concrete floors, trees and rain. It therefore works best in a single office building or campus.

The fear is, that with expectations raised so high, the city networks may disappoint. “Most often politicians get hold of the idea and say they can offer free access to citizens,” says Ian Keene, research VP at Gartner. And although these networks will be low-cost and effective, they may not offer the quality of broadband that users are used to.

To keep costs down and avoid cabling, many of the networks, such as the one in Tempe, use a technology called “mesh”, where each Wi-Fi hotspot transfers data from adjacent hotspots. When working properly, mesh networks should be robust and “self-healing” with signals routed around any problems.

However, the technology is new and there are differing views of how best to implement it so that networks do not fail under the weight of their own traffic. Currently “mesh” is not an industry-wide standard – discussions to standardise it only began in June 2005 and are unlikely to be completed for years.

To address some of the shortcomings of Wi-Fi a new technology, WiMAX, is being introduced. It is more suitable for outdoor use, has a range of several miles and can be used in licensed radio spectrum, ensuring it does not suffer the interference problems of Wi-Fi. This also makes WiMAX suitable for critical business use.

In particular, it can link hotspot networks, such as the one in Tokyo where a planned 30,000 hotspots will be linked by 3,000 WiMAX base stations, says Paul Senior, vice-president of Airspan, a maker of WiMAX equipment.

Because WiMAX guarantees transmission quality and availability, it can increase the reliability of hotspots. This means high-quality voice over Wi-Fi might be possible.

Another feature of WiMAX is that it allows different levels of service to different clients, says Graham Currier, Director of Wireless at Pipex Communications, which owns some of the radio spectrum for WiMAX in the UK. This allows operators to charge clients different rates depending on the service they require.

Many mobile phone operators already own spectrum that could be used for WiMAX and they have the masts on which WiMAX base stations could be deployed.

Fortunately, WiMAX and cellular networks do not necessarily interfere with each other, so operators such as Vodafone, have started to adopt WiMAX to provide capacity to Wi-Fi hotspots and link to their own networks.

Although WiMAX is today of interest mainly to telecoms companies and businesses, by the end of this year devices will be available that will allow laptops to connect directly to WiMAX networks that adhere to the “mobile WiMAX” standard.

Next year, laptops and other mobile devices with integrated WiMAX will be available. Dan Coombes, Motorola Networks senior vice-president, predicts that 10m WiMAX laptops will ship in 2008.

This means that in areas away from urban centres, where Wi-Fi hotspots are few and far between, WiMAX can fill in the gaps. Often, users will have a choice of networks, either Wi-Fi, which can handle higher data rates, or WiMAX, which is slower, but has guaranteed service levels.

In parallel with these, there are the GSM, 3G and CDMA mobile phone networks. These can offer connectivity without the quality of service problems that Wi-Fi networks have. They are also available in many remote areas.

End-users will, therefore, have choices. The technology to enable some of that choice is already available. For example, Vodafone is making available network cards and phones in Germany that allow users to choose between its own mobile phone network or a Wi-Fi hotspot.

Users can choose the most appropriate network and be charged a corresponding rate. For example, most business users choose the 3G network simply because it is more convenient, says Alan Harper, Group Strategy Director at Vodafone.

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