Technology: Why wi-fi isn't flying

Pubs are a hotspot for wireless net access but customer demand is being dented by concerns over its security.

Pubs often lag behind when it comes to adopting new technology. But there's one piece of wizardry in which hospitality outlets are leading the way - wi-fi. Wi-fi, or wireless internet access, enables laptop computer users to get onto the web without plugging into a phone line.

But to do that they need to be in a "hotspot" and pubs, cafés and fast food restaurants are being targeted by a number of wi-fi suppliers as ideal locations.

The idea is that business people on the move can hook themselves into the information superhighway while enjoying a pint in the pub. But is the demand really there? A recent study commissioned by Bailey Telecom, conducted by market research company IDC, has thrown doubt on the scale of opportunity.

The survey questioned 200 directors and employees in organisations from a variety of sectors. When asked how likely they were to use a wireless hotspot in public, 70 per cent said they were either "unlikely" (16 per cent) or "very unlikely" (54 per cent).

A lot of hype​

Security of networks came through as the most common reason for people's reluctance to use the technology. Those who would potentially use a wireless hotspot are far more likely to do so in an airport or railway station than in a pub, coffee shop or fast food outlet.

"These findings show that while there is a lot of hype about wireless, only business people who are comfortable with this kind of technology are currently benefiting," comments Graham Iliff, marketing and technology director at Bailey Telecom.

"There needs to be more education from the providers of hotspots about how to use these facilities and more attention paid to security before we will see everyday people logging on wirelessly."

Although many in the industry believe wireless technology will take off once it has found its "killer application" - similar to mobile phone texting - Bailey Telecom believes the only true inhibitor is the current widely-held misconception that it is inherently insecure.

"Everyone can already recognise the usefulness of wireless, especially for remote use and home workers," says Graham. "But they are worried about security.

"The fact is that we now have technology, such as 'air monitors' which can keep a wireless network and its users secure because it monitors all activity and flags up irregularities. The majority of network-invasion horror stories come about because people have not properly implemented security features or users have not been adequately briefed on security protocols."

Wireless has moved from being a risky system towards becoming a manageable technology, Graham believes.

"The possibilities are very exciting but we need to educate businesses on how to ensure their systems are secure," he says.

Bruce Cairns, IT and e-commerce lawyer at international law firm Eversheds on wi-fi technology and its implications.​

Deregulation of the telecoms market over the past two years has paved the way for many innovations. Perhaps most noticeable in the hospitality sector is the appearance of "wi-fi hotspots". These are access points which allow people within a certain area to log onto the internet wirelessly - as long as they have the correct equipment.

The hospitality industry has been quick to see the benefits both for customers and for generating new revenue. Most hotspots are created through outsourcing the installation and operation of the service in return for a share of the provider's profits. This seems a simple solution for a bar owner wanting to take advantage of the latest technology.

However, due to their relative immaturity, key areas are still being overlooked and hotspot supply contracts present risks for both the licensee and supplier. The licensee needs to ensure the supplier offers nothing but quality in terms of product and service.

A bar risks serious damage to its reputation if the wireless access it offers is poorly designed, slow or intermittent or if it fails to cover the area it should and has "dead spots" within the building.

Considerable care and experience is needed to design a wi-fi network. The licensee needs to ensure that the responsibility remains with the supplier and that appropriate warranties are provided.

An installation plan should also be agreed as actually getting the network into the building can be highly disruptive. There could also be issues with price - if a competitor's coffee lounge or bar offers cheaper access, then the pub could actually lose business.

Another thing to consider when entering into a wi-fi contract is exclusivity. The provider will expect to tie the customer in for a minimum term during which no other wi-fi supplier can be used. If the licensee is unhappy with the service there is often no recourse. The supplier's standard contract will probably not allow termination in these circumstances, placing the bar at a competitive disadvantage.

The contract should include the possibility of termination by written notice or should give the licensee the right to terminate in the event of poor or non-competitive service. A big issue that has plagued many early adopters - and has resulted in some very bad press for a certain fast food chain - is staff training. If a bar is going to provide hotspots it is crucial that its employees can help customers with problems or queries. The service provider should be required to train barstaff as a condition of the contract.

The supplier also needs to provide a support service, withadequate service levels agreed in the contract.

Wi-fi technology is still in its infancy. Anyone wanting to enter into an agreement should tread carefully and ensure they are covered contractually if anything goes wrong. It should cover quality of the kit, installation and operation including coverage, bandwidth, reliability plus technical support for both the bar and customer. The next few years should see wireless technology achieve new things - and as an early adopter the hospitality industry will have a lot of influence on its progress.