Have Wi-Fi, will travel
Just a few years ago, if you wanted to log on to the Internet, you were pretty much stuck in one place: your home, your office, and maybe your hotel room or the airport. But Wi-Fi is quickly changing all that. Anyone with a laptop or PDA equipped with a radio antenna or PC card that uses the local area wireless networking standard can now wander into a slew of public places and hop onto the Internet for a few dollars an hour.
Over the next few years, the ranks of those hot spots will grow significantly. Even the National Mall in Washington, D.C., is getting Wi-Fi access. Research house Gartner predicts that more than 50 percent of all laptops will feature built-in wireless networking capability by the end of the year, and the number of hot spot users will triple to roughly 30 million worldwide. There's a wide range of companies planting Wi-Fi seeds. "Wi-Fi is truly democratic because there's no licensing process," says Pyramid Research analyst John Yunker. Wi-Fi providers run the gamut from mom and pop wireless shops to local wireless providers run by communities or entrepreneurs to national wireless carriers like T-Mobile.
With 4,600 public hot spots, or roughly 40 percent of the total number in the United States, T-Mobile is by far the industry leader. That's thanks largely to its relationship with Starbucks. The wireless carrier has outfitted nearly 3,000 of the chain's coffee shops with Wi-Fi. Customers can buy a day pass for $9.99 or purchase a T-Mobile Wi-Fi account for $29.99 per month for unlimited access (T-Mobile cellular customers pay even less). For T-Mobile, Wi-Fi is a major part of the company's overall strategy. About a third of its Wi-Fi users are also cellular phone service subscribers, and Wi-Fi garners an average of $20 in additional revenue each month from those customers. T-Mobile also provides Wi-Fi access at more than 100 airline clubs for American, Delta, and United, more than 400 Borders Books and Music stores, and 1,100 Kinko's outlets.
A refill, please. For Starbucks and other retailers, Wi-Fi is all about encouraging customers, especially the business customers that many retailers covet--executives jetting across the country, salespeople covering a territory by car, and freelance creative types traversing the neighborhood on foot--to spend more time in their shops, restaurants, hotels, airports, and office service centers. After all, the longer the visitor stays, the more money he or she is apt to spend on coffee, burgers, books, CDs, copies, or whatever else the retailer happens to be peddling. It's all about time: time spent checking E-mail, calling up Web sites, and sipping more cafe lattes. "The average Starbucks customer stays in the store five to seven minutes," says Joe Sims, vice president and general manager of T-Mobile HotSpot, the Wi-Fi division of T-Mobile USA. "The average T-Mobile HotSpot customer spends more than an hour."Indeed, Starbucks credits Wi-Fi with contributing to the chain's increased revenues.
Equipping retailers with Wi-Fi can be an extremely complicated endeavor, particularly when the retailer has a seemingly endless supply of storefronts. Take McDonald's, which is rolling out Internet access ($2.95 for two hours) at many of its Golden Arches. "There's much more involved than just setting up access points and hoping customers will come," says Dan Lowden, vice president of marketing for Austin, Texas-based Wayport, which beat out Toshiba and Cometa for the McDonald's account. Each would-be hot spot must be surveyed to determine how many access points are needed and how to set them up without interfering with other nearby points. High-speed land lines must also be installed.
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