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McDonald's free Wi-Fi part of growing trend

Ads, sponsors expected to support free Wi-Fi at restaurants, on planes

December 17, 2009 06:01 AM ET

Computerworld - Everybody wants free Wi-Fi, and McDonald's Corp. is responding to that demand with Wednesday's announcement that more than 11,000 of its U.S. restaurants will have free Wi-Fi in January.

"We've had Wi-Fi working in our restaurants for five years under the pay-to-play model, but now is the time, with the ubiquity of Wi-Fi devices -- including handhelds and laptops -- to extend that offer," McDonald's USA CIO David Grooms said in an interview today.

"We said, let's go with free Wi-Fi.... We talked to customers and asked what they wanted to see, and they really wanted us to go free. You don't need a lot of focus groups to find that out, and we take what customers say seriously."

Asked whether McDonald's sees free Wi-Fi as a draw for new or infrequent customers, Grooms said, "We'll appeal to customers who visit us already, the folks with a [Wi-Fi] device ...who want a cup of coffee and to visit."

The chain plans to expand the free Wi-Fi service to all 14,000 U.S. restaurants over time, he said.

Grooms wouldn't discuss the financial terms of the free Wi-Fi model, but said it's "one way to extend the McDonald's brand." AT&T provides the Wi-Fi hot spots inside the restaurants and cooperated fully in the decision to offer the service for free, having "been a partner from the beginning," Grooms said.

The McDonald's move is part of a growing trend that includes several smaller restaurant chains that already offer free Wi-Fi, including the 1,362-store Panera Bread chain and Bruegger's Bakery Cafe, which has 292 outlets.

Free Wi-Fi at Bruegger's has been in place for two years, and was a "natural extension" for cafes that are viewed as "neighborhood gathering spots," said Tom Piper, director of marketing for the chain. He called free Wi-Fi a "small, but still very important part of being guest-focused in everything we do. Taken with all our other efforts, it definitely helps the bottom line."

Starbucks Corp., which has 11,000 locations in the U.S., charges $3.99 for two hours of Internet access, but does have a rewards program for frequent customers who can get two hours for free. McDonald's free Wi-Fi, which is going to provide unlimited hours of access, will surely place pressure on Starbucks to lower its costs, several analysts said.

Analysts also predict free or nearly-free Wi-Fi will grow in other venues, such as in-flight. That service today can cost $5 to $15 for a wireless connection on a flight. Google Inc. teamed up with Virgin America in October to offer free in-flight Wi-Fi during the holidays, a sponsorship deal that could catch on with other major corporations hoping to sow goodwill and brand recognition, experts said. (Virgin America uses an in-flight service called Gogo, from Aircell, which has already provisioned Wi-Fi on the planes of eight airlines and added a ninth, Continental Airlines, yesterday.)



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