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I am interested in deploying a hotspot that can cover a distance of 1kM. Some of the engineers that I have discussed with said that even if I get an Access Point that can cover that distance, that most laptops and smart phones cannot send signal back to the AP because of their short transmitting range which he said is maximum of 300m.

I want to know if this is true. If it is, what is the cause of this limitation, and how do I overcome it in real world?

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There are two main limitations with Wi-Fi on phones and laptops.

  1. Low transmitter power. Because these devices are battery powered, they necessarily limit the transmitter power. You wouldn't want to buy a cell phone that had to be recharged every 2 hours, would you?
  2. Low (or even negative) antenna gain. The antennas in phones are a compromise between performance and size. The antenna has to fit into the case of the phone or laptop, so it can't be as efficient as an access point that has a larger, external antenna.

Ultimately, there's little you can do to improve the client signal. You will have to move the access point closer to them.

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That is true; Wi-Fi is a bi-directional protocol, and devices are both senders and receivers, not at all like commercial radio or television where you have a powerful transmitter and a lot receivers.

The only way you can cover that type distance is with a directional antenna, basically a point-to-point link. The governmental authorities limit transmitter power and antenna gain. The frequencies used by Wi-Fi are open for everybody to use, and if everybody could just send Wi-Fi that sort of distance, it would be useless because everybody would interfere with everybody else. The Wi-Fi protocol must share the frequency, and devices must yield and give other devices on the same frequency time on the air. That is built into the protocol. You don't own the airwaves, they belong to everybody.

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It's MOSTLY true, but there are exceptions, primarily in largely radio-dead rural environments, and with the application of high-gain sector antennas.

A high gain antenna concentrates the radiated radio power (within local legal limits, of course) to a particular physical area, and also has the same amplifying effect on a signal originating from that particular physical area, even if the antenna radiating that signal is a standard low-gain omni-directional antenna.

This only works in relatively radio-dead (but tree-free) rural areas because the antenna will also pick up any competing noise source in its "beam." I emphasize this point since many people jump to the conclusion that it can be applied anywhere, and that's not even close to true. I have personally tested my system (16 dB 2.4 GHz sector) and got acceptable performance to 435 meters before I ran out of test range, going to an ordinary (crummy) wifi antenna in a laptop, and wifi in a cell phone. My actual production application for this system is more in the 200m range, feeding athletic fields and backstopped by a hill with no houses or transmitters on it. An online acquaintance has a ski-area setup with mountaintop sectors that typically operates to normal hand-held devices at 1-km ranges - but I reiterate that this only works because it's the only thing in the area operating on those frequencies, and there are no trees to stop them.

In general, in the real world, if you want wi-fi over whatever you mean by a "1km distance" (a 2km circle, a 1 km square, etc.) you build a backhaul (preferably fiber, or via point-to-point links on frequencies you will NOT be using for WiFi) and you hang a large number of access points which are serving a much more reasonable radius each, such as 100m (in a clear field) or 30m in urban environments. Or you skip wi-fi entirely and head into 3G/4G cell-phone data schemes.

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