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April 13, 2004

Wayport Bags Golden Arches

By Glenn Fleishman

Wayport will unwire 13,000 McDonald’s: Wayport, one of the very earliest and longest-lasting Wi-Fi hotspot operators, has reportedly become the sole contractor to provide Wi-Fi service in 13,000 McDonald’s. The company’s CEO is quoted saying that they would add service in up to 3,000 stores this year; a Wi-Fi Planet article quotes a McDonald’s executive saying 6,000 in the next year (by mid-2005). Wayport recently snagged The UPS Store contract as well, which involves thousands of stores in the U.S.

Wi-Fi Planet said that Wayport would easily become the largest hotspot provider in the U.S., but—while true—that blurs the relationship they have in certain venues. With SBC, they’re a managed service provider, building infrastructure that will be sold under SBC’s name. SBC has made roaming sounds, but it’s unclear at this moment whether The UPS Store service will be resold to aggregators through Wayport, although that’s a likely case. With McDonald’s, Wayport is acting much more like T-Mobile does in its Starbucks relationship: it’s name is apparent in its trial locations. Wi-Fi Planet noted that roaming deals Wayport has with aggregators have to be rewritten to reflect particular terms of the McDonald’s service.

The service will cost $2.95 for two hours, a substantial discount over most similar pay-as-you-go plans in the U.S. and Europe, significantly below the closest comparable large domestic network, T-Mobile HotSpot, which charges $6 per hour (one-hour minimum) or $10 per day.

Cometa Networks and a Toshiba division were also in trials with McDonald’s. Cometa recently lost a reseller partner, AT&T Corporation, for reasons that weren’t disclosed, even as Cometa signed up Barnes & Nobles’s several hundred U.S. locations. (AT&T Wireless continues to be part of Cometa’s reseller partnerships, but it also continues to omit Cometa locations from its Wi-Fi directory.) Toshiba’s product always seemed to be a strange play for a company with little Wi-Fi strategy; more of a turnkey-hotspot product than a network plan. Wi-Fi Planet’s coverage noted that the Toshiba trial in Illinois has already been converted to be part of Wayport’s network; Cometa’s locations will follow.

One article on the McDonald’s deal, reported by Dow Jones Newswire, focused on the impact on McDonald’s own operations. Back in July 2003, a McDonald’s executive mentioned how important the full gestalt of Wi-Fi might be the company: providing them with the ability to have wireless point-of-sale components, offer reduced-price access to staff (thus reducing employee turnover), and letting district managers and contractors have inexpensive access.

In the Dow Jones article, a McDonald’s executive notes that the build-out will help McDonald’s increase cashless transactions. As with Starbucks pre-MobileStar/T-Mobile, McDonald’s lacks a high-speed, robust information infrastructure among its stores. By hiring Wayport to build out its network, it has both the public-facing opportunity of selling access to bring more people in during off hours, and the private-facing chance to improve back-end tools.

Posted by Glennf at April 13, 2004 8:21 AM

Categories: Hot Spot

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