mmo2 takes wireless LAN plunge

British mobile phone operator mmO2 said on Tuesday it was planning to roll out wireless LAN services across the UK, as it reported steady growth in mobile data revenues.

mmO2, Europe's fifth-largest wireless network, also gave its first update on Active, launched on 2 June to rival Vodafone's initially successful Live! data-centric mobile service. O2 Active users rose to 60,000 in its first month. The operator said it was planning to enable more than 1,000 Wi-Fi wireless LAN hot spots around the UK, as well as extending its current Wi-Fi offering in Germany from 30 sites to more than 100. mmO2 already offers Wi-Fi services in Ireland.

Rather than building its own hot spots, mmO2 said it would partner with third-party Wi-Fi ISPs, although it has not yet announced any partnerships. The company has already formed a deal with Excilian for its payment and authentication platform, which will allow subscribers to pay for Wi-Fi via their existing mobile phone bills.

Like offerings from other operators, including former mmO2 parent BT Group, the offering will focus on business travellers and commuters, and will enable locations such as airports, large train stations, hotels and conference centres.

A number of companies have rushed to offer Wi-Fi services in the past few months, but analysts have warned that none have yet arrived at a sustainable business model, which could lead to a repeat of the dot-com crash on a smaller scale.

"(Wi-Fi is) probably one of the most hyped technologies I've ever known," said Dave Williams, mmO2 chief technology officer at a London news conference.

mmO2 had more concrete news on its data revenues. The operator said users of picture messages, which the industry hopes will be a key driver of revenue growth, rose to 180,000 by the end of May -- double the number at the end of March.

The company said it will introduce a camera-enabled version of its xda smartphone later this year. mmo2 is also developing a mobile phone handset that doubles as a domestic phone, using Bluetooth to connect to the home's landline.

Matthew Broersma writes for ZDNet UK