Bloomberg News (and no one else) reports SBC to offer its customers six months free, then $1.99 per month Wi-Fi hotspot service: Strange that this story is only on Bloomberg's wire service, but it says that SBC will offer existing customers--presumably its DSL customers--free Wi-Fi access through April 2005 if they sign up now. After April 2005, they will charge $1.99 per month.
It's a great strategy. As noted many times in the last few months in this space, the combination of SBC building out its own hotspots with Wayport's help and reselling access to Wayport's networking and new McDonald's locations gives SBC a pretty remarkable single fixed cost for offering Wi-Fi access. In this model, the more users, the more they make. Their cost per user for accounting is already paid if they only offer this to existing customers, too, so that takes that overhead back into the DSL side instead of being a new cost for authentication or billing.
This throws down the gauntlet. I noticed yesterday that, as I predicted, Boingo Wireless's $21.95/month introductory rate for 12 months--after which the service would be $34.95 per month--is now the permanent rate.
The trend for venue owners and hotspot operators will now have to accelerate towards a fixed monthly fee per location instead of a per-usage fee. There's no way around this. If you decide not to play that game as a hotspot, you could be left out of the largest market of users, and increasingly marginalized by nearby competitors. If I can use one large Wi-Fi network for $1.99, or another for $20 or $30 or $40 per month, which do I choose?
Airports still sit in the catbird seat: captive audiences may still have to pay more for usage.