Wi-Fi comes to Britain's pubs. Cheers...

A company best-known for connecting machines in bingo halls, motorway service stations and bookies is launching a 3,000 site Wi-Fi network in the UK, the biggest roll out of the wireless LAN technology so far in Europe.

With the help of Ericsson, Intel - on the verge of debuting its Wi-Fi-ready Centrino chip bundle - and pubs groups such as Six Continents and Scottish and Newcastle, Inspired Broadcast Networks will enable commercial Wi-Fi services to be available at 1,000 locations by the end of June this year, and at 3,000 sites by year's end.

Its model is to set up and manage the infrastructure for hot spots - which it collectively calls The Cloud - and then let those hot spots be used by service providers. BT Openzone will be the first such provider, starting in July.

Though most of The Cloud's hot spots will be operated out of pubs, Inspired is developing its relationship with Leisure Link, which manages coin-operated machines in all kinds of premises.

But despite the backing and scale of the roll out, Inspired and its service providers are up against stiff competition. Today Starbucks and T-Mobile announced an expansion of their US full deployment and UK trial of Wi-Fi wireless networks in coffee shops to 56 shops in 21 major towns and cities. Their model is to sell pre-paid surfing passes by the hour, day or month.

While the Starbucks/T-Mobile tariffs aren't wildly different to those of BT Openzone and other UK providers such as Megabeam, a T-Mobile spokesman defended Starbucks charging £47 for a UK monthly pass - about twice as much as the same service in the US.

"The pricing takes into account the competitive environment," he said. "The US is twelve to eighteen months ahead of us in terms of scale and has a more competitive local loop in general."

Prices are likely to come down and T-Mobile claims that now a major goal is educating users about the advantages of wireless data. The operator does not go as far as to say Wi-Fi usage will help uptake when it rolls out 3G services, on which it has much more riding financially.

However, any paid-for Wi-Fi offering, whether from Starbucks/T-Mobile or a service provider using The Cloud, will face challenges.

Clive Longbottom, research director at Quocirca, said: "The business models haven't been sorted out yet. Prices are likely to fall but I wouldn't be inclined to pay for any of them. In the US we've seen the battle between paid-for hot spot services and 'freedom fighter' hot spots - privately run networks that are open to the public for free, on purpose as an anti-capitalism statement."

Longbottom also said a model may win in the long term where a premise pays a flat rate to a company managing a hot spot and then makes money by limiting access time unless more product - like coffee - is bought.

"That would beat having a T-Mobile take a cut every time a customer wants more [access]," he said.