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Wi-Fi dead zone: China lags after an early lead
(Agencies)
Updated: 2004-06-14 09:55

Has China gone cold on hot spots? Three years ago, the country's biggest phone companies, China Netcom and China Telecom, seemed to be in a fast-paced race to sign deals with the country's hotels, airports and fast-food chains to open short-range wireless broadband access points, known as hot spots, in major cities like Beijing and Shanghai and in swaths of Guangdong Province in the south.
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Chinese companies, in fact, began deploying so-called Wi-Fi technology about a year before their counterparts in the United States and Europe, and industry watchers back then predicted rapid adoption that would mirror China's steadily rising rates of Internet and mobile phone use.
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Today, though, you would be hard pressed to find an analyst willing to venture a guess at how many public hot spots exist on the mainland. Publicly advertised access points number fewer than 2,000 nationwide, although industry executives say there may be several hundred more tucked inside neighborhood teahouses, noodle shops and other gathering places.
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The Asia-Pacific region has 53 percent of the world's hot spots, according to the San Diego-based wireless researcher ON World. But compared with many of its neighbors - South Korea, for example, where the phone company KT expects to have 26,000 public hot spots at the end of this year - China remains a Wi-Fi backwater.
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There are several reasons for this, analysts and industry executives say, not least of which was a year-long standards dispute that pitted the Chinese government against the predominantly foreign makers of the chips that enable computers to receive Wi-Fi signals. That battle ended in April when Beijing backed down from a June 1 deadline for all makers of Wi-Fi equipment, including Intel, maker of the Centrino chipset that drives most of the world's Wi-Fi laptops, to adopt Chinese security protocols.
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"It definitely had a major impact," Alan Zhen Zhou, president and chief technology officer of Top Global, one of China's leading makers of Wi-Fi equipment, said of the standards dispute. "Things are just now starting to come back, but for the last nine months, our customers had put off all investment" in network equipment.
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Intel, in fact, last week signed agreements with municipal governments in Dalian and Chengdu to install new broadband wireless services in the two cities.
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China says it has now put off the idea of a national Wi-Fi standard indefinitely. But even without this uncertainty, analysts say there are other reasons to believe that the technology will struggle to take hold there.
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One problem is that in China, notebook and hand-held computers represent a small fraction of the market. According to International Data Corp., laptops represented only about 10 percent of the 13 million personal computers shipped in China last year, compared with a worldwide average of about 27 percent.
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So for now, foreign business travelers represent the largest user base for Wi-Fi. The trouble is that the marketing of the service to non-Chinese visitors has been so poor that few seem to know how to track down the nearest hot spot.
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"Public Wi-Fi hot spots in China are almost invisible," said Robert Clark, a Hong Kong-based journalist and telecommunications industry analyst.
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The slow growth of Wi-Fi has been a boon to China's mobile-phone operators, who also offer wireless Internet over their high-speed networks. China Mobile Communications, the country's No.1 wireless operator, offers Internet access for 200 yuan, or about $24, per month.
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Some say the convenience of accessing the Net via cellphone means that Wi-Fi will be used more for private networks in apartment buildings and offices.
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"I think we will see more and more corporate use of wireless LAN," said Sandy Xie, an analyst at Gartner in Beijing, referring to local area networks. "This is really the future for Wi-Fi in China."

 
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