There's not a single day in which I do not read about Municipal Wifi on a web site or blog. However, most do not say how many access points are required for city wide coverage and how that compares to cellular networks that offer similar services. Maybe I can add some numbers here.
Dailywireless has recently featured an interesting article on Muni Wireless in Annapolis and San Francisco. In this article they state that about 25 access points are required per square mile. If you do the maths you end up with one access point about every 300 meters. That sounds realistic as I can imagine that communication between access points over 300 meters without directional antennas in the open is possible. Communication between the nodes is required for the meshed network architecture most Muni Wifi projects use in order to minimize the number of fixed line Internet connections required.
25 doesn't sound like a lot at first. However, a square mile is not much either. The article goes on to say that San Fransisco's Muni Wifi network will cover 54 square miles. With 25 access points per square mile as described in the blog above, 1.350 access points need to be distributed in an area of 7.5 x 7.5 miles.
Let's compare this number to the number of cellular towers of a UMTS/HSDPA or CDMA/1xEV-DO network required for the same area: Let's say such a network operator aims for reasonable indoor coverage (which by the way the Wifi Muni network can not do with an access point every 300m). In such a configuration, the cell radius would be about one mile. This gives you a coverage area of a single base station of around three square miles, or 3 times 25 = 75 wireless LAN access points. 75 that's quite a ratio. For a 54 square mile area, this would result in 18 cellular sites vs 1.350 wireless lan access points. I know, a wireless lan access point is a lot cheaper than a cellular base station but it has to be a lot cheaper to make up for this. (Note: Since my initial posting I changed this paragraph twice to take the good information given in the comments below into account. Thanks for posting!)
Looks like these numbers are no fiction. Take a look at this article about the Wifi Network in Taipei. It says they will (or already have?) distribute(d) 10.000 Wifi access points in the city. Quite a challenge!
From a consumer perspective I hope there will be enough competition to have a positive effect on prices.