Cost structures for providing free WiFi and providing wireless telecom service are completely different though - a telecom ought to procure proper licensing, acquire some spectrum and buy/rent tower space before they earn their first dollar.

End of the day it's all about barriers for entry - the barrier to provide free WiFi is relatively low, and one can do it at the cost of an uplink connection and a wireless router. If you find a way to lower the barrier for wireless telecom space, the market forces will take over.