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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 5922x
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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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Comments
Posted by Arne Hess on 20.06.04 - 15:05:38

Wolfgang, cheers for the thought! I mostly agree with your notions, especially about how wireless surfers "hijacks" the spaces in cafés (and that's because they don't have Pocket PCs but large Notebooks... :wink:)
But seriously, I made more or less the same experiences.
While I like to surf wireless in cafés (I'm just on the way now to my typical Sunday brunch at Café Puck in Schwabing which offers free wireless access), I don't think that Wi-Fi will become a huge success at fast food restaurants (at least not for Notebooks but maybe a little bit more for Wi-Fi enabled Pocket PCs or Smartphones) or gas stations.
Café Puck is a good example how successful free Wi-Fi access can become. In the beginning there were just a couple of geeks with Notebooks, today it becomes more and more and I enjoy to have a surf session with my girlfriend where we are surfing the web together like for searching for holiday destinations, etc.
But as you said - a lot of today's Notebook users just order one coffee and that's it. Also my girlfriend told me last time that, if there will be more folks with Notebooks around, she will not go there anymore because it becomes too much and it starts to look like a Internet café, not like our good old comfy hangout place. Interesting, I have a different opinion about that but that's just another proof how customers might see this development.

Well, I will go there now, to have my brunch and maybe - inspired by the atmosphere - I will add a couple of comments later...

Posted by APA on 20.06.04 - 23:24:12

It depends on how much time I have or plan to spend. If I have enough time I don't mind to order more than a coffee. Then of course I pick the place that offers WiFi (if I can choose).
Never ever in my life I will go to one of these dirty places from the fast food chain with the clown as their mascot. For several reasons I don't want to give them any business. Decent restaurants why not, this fast food place, rather no WiFi than their WiFi.

Posted by stephan on 21.06.04 - 07:38:49

well, some more thoughts..... 
As long as people see wifi access as an option to actively suft the net or download data I think places like McD, gas stations or a super market for that matter are not attractive for a person that is willing to spend an additional 20 or 30 Euros a month. However, if Wifi is seen as a option to sync and download data that you have previously choosen or subscribed to, it becomes more attractive.
- sync your mail with attachments
- get the daily song from your subscription service
- update your blog with pictures and/or videos that you have taken.

One think I am missing from the carrier offers is why I would like to have wifi on a mobile phone? MDA iii is cool but what do you do with it. web pages are still small and surfing is a pain. Email is possible but again it is more convenient on a laptop and if you really plan to go to a hotspot you might have the time to choose the best device to do what you want.

As with GSM penetration some years ago, Wifi is dependent on a good deployment plan and good content distribution ... just a thought.
- get the

Posted by Wolfgang Irber on 21.06.04 - 21:45:17

[1] Arne,

I had to smile when reading your girlfriend opinion about Cafes and free Wi-Fi. Even though I am often one of the notebook people, I totally share her feelings. When not browsing the Net, people that silently stare at screens and type into keyboards create an atmosphere that is opposite to the friendly environment of chatting and interacting people.

The future is certainly telling us what's coming up, and maybe, using a notebook in cafes may become a similar sign of bad habits as what is slowly happening to using cell phones in public transport.

But however we look at it, and whatever effect the mobility has to our lives, and whatever Wi-Fi business model is going to be successful, there is currently no perfect device for the total mobility we are enjoying so much:

notebooks are too big but perfect for browsing the Net and data input, PDAs are perfect in size but data input is clumsy and Internet display is far from acceptable, smartphones are even better in size but data input and display is simply a pain.
Often I think, OK, we have got the radio technology, but where are the devices that last a couple of days, have brilliant displays and really support our new lifestyle?
At least for now, the wirelessly provided bandwidth is faster growing than the technology of  the really mobile devices :-(

Cheers ~ W  8O

Posted by APA on 23.06.04 - 09:59:10

[4] Wolfgang I think the SubNotebooks would be perfect size, however it's as most of the time a price issue. I personally love my IBM X30 and got it especially for travelling. But I also do develop on it, installing Data Warehouse Environments and Visual Studio. Some people complain that the screen then is too small, still good for me. But I wouldn't mind to have just a subnotebook like the new Sony with 800 gram weight. But the stuff must be cheaper than today.

Also PDA with the VGA resolution should bring us a bit closer to the mobile society ;-) My biggest hope however are OLED foils big_smile

Posted by APA on 23.06.04 - 21:46:43

Something like this ?
http://www.handtops.com/sho...

Posted by Wolfgang Irber on 23.06.04 - 22:08:54

[6] WOW, the handtop looks cool, APA!

Today I also met a friend in the subway that recently got a tablet PC for work. That was my day's first WOW: I never had seen one before in action and was amazed. It's basically an oversized PDA but with the power and the applications of a big PC. I only was missing a built-in GSM/UMTS modul. If they can extend the battery life to a full days work, then its my next device. I loved in particular the data input with stylus. That's what I like with the PDAs and miss with the smart phones.

Obviously, the next years appear to bring us the REALLY mobile devices I am currently missing so much smile

Cheers ~ W

Posted by APA on 24.06.04 - 09:10:04

[7] Well I will trade my X30 for the next model of the Toshiba M200, after I got ride of my CDs and have now everything on MP3 the Toshiba will help me one more step to get closer of being without paper. With the excellent screen I finally can read e-paper stuff in a normal way without holding my laptop 90 degree around big_smile
If toshiba gives it a UMTS/GSM modul it would be great, but already with plain WiFi and a PC Card for UMTS I would be happy.
Add a 100 GB HD, 802.11g, latest mobile processor, 2 GB RAM , mmmhhh

One day:
1. IPod WiFi + Airport Express
2. M200 (latest model)
3. Sony Z1010 with 4 MPix Camera

perfekt road warrior dream, no more need for office building big_smile

Posted by APA on 24.06.04 - 09:12:33

1. IPod WiFi + Airport Express
2. Handtop
3. Sony Z1010 with 4 MPix Camera

perfekt vacation combo big_smile

Posted by techuser on 04.08.04 - 00:43:54

All establishments should have a 2-tier model.
The 'free' one is throttled - 128k or something
and if you want higher bandwidth you pay for it

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