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THOUGHT: Who is the Wi-Fi customer that all the cafes and others attempt to attract?
Posted by PPCW.Net Editori - on Sunday, 20.06.04 - 14:39:12 CET under 09 - Thoughts - Viewed 7075x
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Contributed by Dr. Wolfgang Irber, PPCW.Net Reader and Business Professional

On travel, I spend quite some time in cafes, to relax, to watch people, and more recently to find free Internet access via Wi-Fi. But what I more and more ask myself: is the Wi-Fi business always well evaluated?

My personal hot-spot favourite
From all the locations where you can find Wi-Fi these days, my personal favourite is a nice and quiet spot such as a cafe, a hotel lobby, or an air lounge. All places, where I have time to sit down and to access the Internet in a relaxing atmosphere. The spots I don't like at all are fast-food restaurants. A fast-food restaurant is - as the name already says is - good for fast food, but not for doing some work or browsing the Internet, not even for leisure.

Others feel obviously the same: a free pilot for Wi-Fi in Prague some months ago offered the Wi-Fi service both in cafes and fast-food restaurants. Over the period of three weeks I checked out all the sites they had in the inner city area: the cafes were commonly pretty crowded with "notebook people", whereas the fast food restaurants were usually free of them. Once I gave a fast-food restaurant a try, only because it was closer to my hotel than the cafe, but I left soon: it was simply too noisy and too smelly. I never came back again.

Wi-Fi in gastronomy: a good idea?
I understand that it's the gastronomy's intention to attract more people and to increase the revenue with their Wi-Fi service. More and more in this business announce their plans for even free Wi-Fi service. I recently had a chat with a nice cafe owner in a small town near London telling me about his Wi-Fi plans. He already has a little-used DSL connection with flat rate for his business, and now wants to offer the Wi-Fi service for free in order to attract more guests. His investment: less than 30 GBP for a single access point.

If free Wi-Fi becomes common in gastronomy, this is not only going to severely affect the commercial Wi-Fi sites, but I wonder if the cafe owners are becoming really that happy as well. Why? Well, just look around the next time you see guests with notebooks: they commonly occupy the larger tables, are usually single, have often some paper work with them, may even phone and disturb other guests, sit there for quite a long time, but do not buy anything except the minimum purchase, e.g., a cup of coffee. I'm not doing any better, so I'm clearly within this group! When browsing the Internet, time means nothing. In particular if you do some work you need to concentrate for. Often I'm that focussed that I forget to drink my coffee. And did you ever try typing and eating at the same time? I quickly stopped this. In short words: an Internet browsing guest is not a high revenue customer but characterised by a low revenue to time ratio.

On the other hand, if the free model becomes too successful, it won't be very satisfying for the customers too when sharing a standard asymmetric DSL connection and one guy does a big download. In my free Wi-Fi cafe I often had to stop accessing the Internet since the bandwidth simply dropped towards zero. But if you start to implement some bandwidth management, who is going or willing to pay for it? I am curious to see how things are going to develop.

Commercial Wifi spots: why that little use?
You certainly came across some recent surveys that pointed out the little use of Wi-Fi spots throughout Europe. The surveys blame the prizing strategy and access barriers such as complicated payment figures for the little use. Both I can fully confirm with my personal observations. Obviously, all business models that attempt to attract the wealthy business customer failed so far.

But besides prizing and payment issues, there are some other similar significant reasons I haven't read about:

I often notice that accessing a Wi-Fi hot spot is not as simple as suggested in advertisements. There are a lot of technical issues you need to be aware of. Quite often I observe people who are willing to access but are not able to do so. When offering help, it's usually a matter of some clicks or even a reboot to resolve the issue. But more often than expected everything fails due to hardware or software incompatibilities. If you are not a techie, you want it to work without worrying about the technical background.

Another reason is certainly the availability of Wi-Fi-ready mobile equipment. In our training department, we offer free Wi-Fi service for about one year but I only noticed a significant increase in utilization numbers within the last quarter. Our prizing was never an issue so what hampered the people from using it? As far as I noticed, people did not have a Wi-Fi-ready notebook or PDA. Or they did not expect to find free service so they didn't bother bringing their own notebooks. With the recent uptake of our Wi-Fi service I fear we are soon going to have some performance issues and have to upgrade. But I am sure that the utilization number would instantly drop towards zero if we'd charge a similar fee as the commercial spots. By the way, access to corporate email is by far the most wanted application at our free hot-spot.

Final conclusion

The young Wi-Fi business is still in the trial phase and investors attempt to claim sites for future development. Nobody knows yet how wireless Internet access via Wi-Fi is going to develop and which sites are becoming (commercially?) successful. The question is still unresolved about (a) who is the customer that is going to be attracted or willing to pay and (b) what is the real reason for wirelessly accessing the Internet? It's currently very interesting and also kind of amusing to observe the various strategies in Wi-Fi business. My personal thumb down is for Wi-Fi at fast-food restaurants or petrol stations. If they are not going to charge for it, they may have some success.

With a free Wi-Fi service in gastronomy, you currently attract those people that simply want to avoid the commercial hot-spots. Those guys - me too - only purchase a cheap cup of coffee as legalization for sitting down. So I am very curious to see how things will develop both for the café owners and the customers in the long term.

My very personal guess in the long run: Wi-Fi is both becoming (a) free of charge and simply offered as complimentary service to attract customers and (b) is going to be seamlessly integrated with the telecom carriers' infrastructure at the same cost as GPRS/UMTS. For the latter I am actually not that sure as the infrastructure per site is cheap but the overall maintenance cost is still high. That’s by the way one reason why CMDA 1xEV-DO is currently making its way into Europe, but that’s a story for another thought.

Overall, the convenience and reliability of whatever wireless access technology is used may be more important for customers than the prizing strategy. That's at least what I observe with my personal wireless behaviour often dumping Wi-Fi in favour of GPRS.

Cheers ~ Wolfgang


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