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4/29/2008
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Wi-Fi Cafes: Easy To Find, But Free Is Fading Away

Despite the expanded services and rollouts, paying for Wi-Fi at some of the larger chains has created an opportunity for smaller restaurateurs.

McDonald's and Starbucks are both moving to broaden Wi-Fi offerings in their restaurants, but their Wi-Fi isn't free to all comers yet, leaving some smaller restaurant chains with an advantage.

In recent days, AT&T announced that its Wi-Fi service will be available this year at 7,000 Starbucks locations in the U.S. The AT&T service, whose national deployment got underway in San Antonio earlier this month, will be available through various free (for subscribers of other AT&T services) and paid plans. Consumers already using T-Mobile paid plans at Starbucks locations can continue to do so for the time being because of a clause in the Starbucks/AT&T contract.

McDonald's Wi-Fi supplier -- Wayport -- reported this week that it has successfully outfitted more than 10,000 McDonald's restaurants in the U.S. with the wireless technology. McDonald's Wi-Fi site states that Wi-Fi service will be available via "on-line credit card payment, subscriptions, prepaid cards or (sometimes) promotional coupons."

AT&T and McDonald's also provide Wi-Fi service at international locations. AT&T has a total of 71,000 global access points. McDonald's offers free Wi-Fi service at more than 1,200 locations in the U.K.

Despite the expanded services and rollouts, paying for Wi-Fi at some of the larger chains has created an opportunity for smaller restaurateurs.

Panera Bread cafes and restaurants offer Wi-Fi with no strings attached to anyone who walks into one of its 1150 locations. "It's free," Panera says. "Just sit down, open up your laptop and you're ready to go... The Wi-Fi's free all day long."

Schlotzky's, a sandwich restaurant chain, has offered free Wi-Fi at its locations for years. Schlotzky's found that many consumers visited Starbucks locations and logged onto Schlotzky's Wi-Fi networks to do their e-mail.

The majority of Wi-Fi hotspot usage is at U.S. airports. Some 45% of Wi-Fi traffic is in the terminal, though the use of Wi-Fi in hotels is surging and now accounts for 29% of hotspot usage, industry analysts with iPass found. Wi-Fi usage at train stations and ferries also is booming.

On a local scale, Wi-Fi at restaurants is the new hot space, gaining dramatically on Internet cafes, which still dominate the local scene with a 44% share of the market.

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