Return From Free Wi-Fi Outweighs Paid Access Revenues
By Carlo Longino, Wed Oct 22 20:00:00 GMT 2003
Techdirt has a typically excellent analysis of an article highlighting the returns that businesses offering free Wi-Fi are seeing, compared to the reluctance of people selling Wi-Fi access to talk about user numbers or revenues.
The article uses the example of Schlotzsky's Delis, a sandwich chain based here where I live in Austin, Texas. The company, which currently offers its "Cool Cloud" free Wi-Fi at 30 of its corporate-owned stores, and estimates the free access generates 15,000 visits per restaurant per year, and with an average tab of $7, that's about $100,000 per year -- for about $8000 in costs.
I'm not totally sure how they generate those figures of visits, but I can say from personal experience that they get a hell of a lot more people using their free network than the paid-access one at the numerous Starbucks here in Austin, as it is at other places around town with free access. Schlotzky's could squeeze even more out of the service, as their biggest cost is the T-1 lines its stores use for backhaul, but they're so impressed with the results that they're requiring new franchisees to offer free Wi-Fi.
Of course the article talks to an exec of a paid-access network, who sticks to the party line that paid networks offer a higher level of service with better hardware and support. This hasn't been the case in my experience, where onerous sign-up processes and faulty billing servers have hampered my access on more than one occasion. And if a free AP is pulling in large amounts of business for a restaurant or bar owner, I'd imagine that gives them a very strong impetus to maintain their service and keep it running.
TheFeature reader IAWood has hit on some of these issues in his journal, and his latest entry reinforces what's being said about free access. He's been using a free AP provided by ReadytoSurf at a coffee shop in London's Paddington train station, but back towards the beginning of the month, the hardware was stolen and is yet to be replaced: "Today I was working in Paddington again and went to use the Ready2Surf zone that had suffered the theft of its AP at the start of the month, reported in my post. Well the company have still not replaced the stolen hardware and the outcome for the site owner is that they are now seeing 20-30 less people buying coffee."
He adds in a comment that's 20-30 fewer customers per day, and at GBP 1.85 for a cappuccino, that's at least GBP 40 a day in lost revenue. At 20 work days a month, that's GBP 1200 a month -- serious cash for a small business owner.