O2 is to replace its paid for Wi-fi service in 450 stores by April this year with its own free Wi-fi service.

O2 currently uses the Cloud Wi-fi service in its stores that O2 and non-O2 customers have to pay for if it is not included as part of their mobile tariff package.

O2 new business development director Tim Sefton said: “Our wi-fi will deliver a higher speed than The Cloud. This will give customers a better service.”

O2 managing director O2 Wi-fi Gavin Franks added: “O2 wi-fi will drive customer loyalty and engage new customers too. The Cloud and BT Openzone are a paid for service that the operator pays for and customers pay for as part of a mobile package. This is free and open to everyone.”

The operator plans to double the number of hotspots, targeting 15,000 hotspots, currently offered by BT Openzone and The Cloud combined by 2013.

O2 hopes the launch of O2 Wi-fi will encourage retailers to develop partnerships with the company to deliver promotional offers depending on where shoppers are.

Franks said: “Our Wi-fi proposition will enable us to be creative about what campaigns we can run for retailers.”

Last week M&S signed up with O2 for its ‘You are here’ location-based marketing service, enabling the retailer to target consumers with special offers.

Marks & Spencer can send text or MMS messages to participating O2 customers when they are near an M&S store.