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Wireless and Web Buzz Again as Wifi Catches On Tue May 13, 4:09 PM

/By Christopher Noble/

PARIS (Reuters) – Landgrabbing and takeover frenzy are again dominating technology headlines as if the Internet bubble had never burst and giving old buzzwords a new lease of life.

At the center of it is WiFi, a technology that allows users of laptop computers and other gadgets to access the Internet without the usual struggle with wires and mismatched phone jacks.

France, late to the party, is now jumping aboard with a series of announcements in the last few days.

The race is on around the world to roll out WiFi access points known as “hotspots,” which for some entrepreneurs offer the prospect of turning mobile Internet access into revenue.

Each wireless (news <http://us.rd.yahoo.com/DailyNews/manual/*http://search.news.yahoo.com/search/news?p=%22wireless%22&c=&n &yn=c&c=news&cs=nw> – web sites <largest hotspot in France. A consortium of companies is now putting a WiFi network in the French capital’s subway stations and bus stops.

France Telecom, through its Internet service provider Wanadoo and mobile carrier Orange, is working to open thousands of hotspots in coming years.

“We have an enormous number of sites, many more than we thought,” said Yves Tyrode, who directs Orange’s WiFi projects.

As companies rush into WiFi, some argue the real value is not in hotspots, and that the hype around them is overdone. Much will depend on the extent to which people need access to the Internet while away from desks and homes, where most are still doing their surfing and emailing.

BIG GROWTH

But the numbers are rising. Intel is making WiFi a standard feature in many of its chips. As many as 6.5 million laptops with WiFi built in will be sold in Europe alone over the next five years, according to analyst Nicholas McQuire of Pyramid Research.

A recent report by research company Analysys estimated that by 2007, the United States and Europe would each have about 13 million WiFi users accessing the Internet at 57,000 hotspots and generating revenue of about $5.5 billion.

Most active are Asian and European telecoms operators, which already run the Internet backbone and many of which dominate the high-speed Internet access market to which WiFi hotspots hook up. They are also the ones snapping up new local WiFi operators.

Switzerland’s Swisscom has taken over three privately held hotspot operators just in the last month and now has 500 hotspots under contract. It is aiming for several thousand in the medium term, according to a spokeswoman.

There are now some 25,000 to 30,000 hotspots around the world available or under construction, analysts said. South Korean operator KT Corp. alone has set up nearly 9,000 hotspots, aiming for 20,000 by year-end.

Germany’s T-Mobile, Spain’s Telefonica Moviles, and TeliaMobile of Sweden run hotspots in Europe, while T-Mobile is in 2,000 U.S. coffee shops and bookstores.

EVERYONE EXCITED

Then there are upstarts like Surf and Sip and Wayport in the United States elbowing their way into the game. Below the radar fly dozens more entrepreneurs connecting shops and restaurants for a few hundred dollars each.

These are the companies eyed by operators who see their wired and mobile phone Internet revenues under threat from WiFi and hope to wrap it all together and sell people a single subscription to “data access.”

Eventually, ForceNine Consulting does not expect small shops, or WiFi in general, to be able to stand on their own.

“We think this is a viable business but we don’t really view it as a separate industry,” analyst Andy Roscoe said. “We think it will be a profitable component of large telecoms carriers.”

It will mean more takeovers, but also more room for aggregators such as iPass and Boingo, which link disparate hotspots into a network with one central billing system. (Additional reporting by Lucas van Grinsven in Amsterdam and Eric Auchard in New York)

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