Shanghai Daily reports:

SHANGHAI Telecom announced yesterday that it will provide Wi-Fi services in Xuhui District and will establish Wi-Fi hot spots across the urban Shanghai region.

The city’s biggest fixed-line phone carrier said it would charge users 0.06 yuan a minute, which is one-third of the current level and the first time carriers have revealed their fee policy on Wi-Fi in Shanghai.

…In Xuhui District, Shanghai Telecom has constructed 400 hot spots, covering 44 buildings, 20 star-rated hotels, Shanghai South Railway Station, Xujiahui, Hengshan Road. The Wi-Fi service is also available in Shanghai Stadium, where the Olympic soccer games will be held. Besides Xuhui District, Shanghai Telecom has signed with other districts like Pudong, Zhabei and Putuo to construct 2,500 hot spots.

People can access the Wi-Fi network through prepaid cards. Free services will be available at several public sites and when users access some government Websites.

After the China telecommunications industry revamp, China Telecom, which gains China Unicom’s CDMA business, will launch bundled services including family phone, broadband, mobile and Wi-Fi services, industry insiders said.

China Mobile was the first to sign with Xuhui, and I had assumed they were going to be rolling out WiFi district-wide. So much for that, it’s going to be China Telecom’s excellent adventure.

Xuhui, in the southwest of central Shanghai, is one of the more densely populated parts of the city. Xujiahui, the absolutely jammed business center of the district, will be a challenge. Xujiahui is something like one square kilometer, but it’s crammed with computer malls, offices, shops, restaurants, and Shanghai’s ubiquitous skyscrapers. They’re going to need a lot (30-50?) of access points to achieve anything like blanket coverage just in Xujiahui, let alone the rest of Xuhui.

There’ll also be a capacity challenge. I haven’t been able to find anything about what user loads China Telecom is planning on supporting. If 上Fi proves popular, the service could get swamped - particularly by shops and users in the computer malls.

And one last thought: as super gee-whizzy as municipal WiFi networks are, they haven’t proved to be particularly profitable. The 0.06RMB/minute fee is cheap enough to encourage adoption, but it’s a great unknown if that’s enough for China Telecom to actually recoup its investment.

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