State-owned enterprise Kordia has shelved its grand plans to provide targeted Wi-Fi coverage in every city by this year, but other players still see rich opportunity in the market.
Chief executive Geoff Hunt said when it began building the network two years ago, the "model" was strong demand for Wi-Fi access from those with laptops.
The Kordia network provides coverage in Auckland City, Taupo and "a few spots around the countryside", but further investment has not been made.
"It has performed OK as a business venture but not spectacularly.
"The model is potentially changing, but we haven't got any specific plans at this stage to extend the coverage that we've already got in place.
"Where we have invested further in the last 12 months or so is where we've had specific coverage requirements – for example, in certain libraries."
But others claim the arrival of Wi-Fi-capable smartphones and the iPad has injected new life into the technology.
Steve Simms, chief executive of Wi-Fi provider Tomizone, says there is no doubt there is demand for Wi-Fi services, but the business case for such projects can be expensive.
Tomizone provides Wi-Fi networks for commercial premises such as cafes and hotels, and also allows individuals to set up their own networks for friends or family.
The company provides wireless internet services via Kordia's network for Auckland City Council's metropolitan Wi-Fi project, which covers the busy inner-city suburbs.
"If you're going to operate metropolitan Wi-Fi networks you need to have a very, very strong network to roll out, and the business case for that is quite expensive," he says.
"You need the coverage first and then the partners will come. There is no question that there is a market there that uses it.
"We know that from our own experience with the Kordia network, particularly in Auckland."
Callplus founder Malcolm Dick initially panned Kordia's idea to charge for Wi-Fi access, saying there was no viable business model.
Two years later he still believes that people are unwilling to pay for Wi-Fi and go through the rigmarole of registering and logging in to networks.
But he says there is an opportunity for organisations to fund wireless networks from the top down.
Mr Simms says a surge in the number of global Wi-Fi providers is a product of "3G overload" in markets where telecommunications providers are struggling to cater for an explosion of mobile data use.
He believes New Zealand is "12 to 18 months" away from a similar overloading problem.