news / tech talk

Have you ever seen a cafe offering free wireless Internet connectivity? Of course, and you have probably seen cafes offering pay wireless Internet services like Tmobile's Hotspot™. Why do some proprietors offer free service and others not? Presumably, free wireless is offered at some cafes to attract and retain customers. But does this really work? Does it make business sense? Let's look at that.

A business like a cafe makes money from selling food and especially drinks. Like any business, the more product they move, the more money they make. Providing free wireless access is an enticement to come in and an inducement to stay. Wireless Internet access is a relatively simple and low cost capital and recurring cost, say $100 for a wireless access point and $40/month for a broadband connection (cable or DSL). The equipment is small, doesn't take up much space and is typically low/no maintenance. So what's the problem?

Well, a basic assumption about wireless access is that it will bring in customers and they will pay for product. Where it often goes wrong is that customers who come in and buy a drink tend to nurse that drink for a long time or just don't get anything else, but they do camp out at a table with their backpack and junk all around for a long time. There's no incentive not to. You've probably seen this at various places anywhere near the UofA. I'm not knocking it. Cafe owners can do as they please and its a nice service.

Starbucks and other cafes offer pay-wireless services like TMobile's Hotspot. I am not certain what kind of percentage the cafe owner makes from this or how one would go about making a deal with TMobile. However, the point is that wireless service is then available but requires payment for use. Its a time-based system with rates of $6/hour or $30/month for unlimited time. Starbucks still offers availability of the service but it isn't free so its unlikely to clog their tables for hug amounts of time.

If you're a small business owner who wants to offer wireless access as an incentive to come in but not become a grungy campground, then you might consider some of the newer niche market wireless products coming out like D-Link's Public/Private Hot Spot Gateway.

Lee Le Clair is the CTO at Ephibian. His Tech Talk column appears the third week of each month in Inside Tucson Business