McDonalds Serves Up Wi-Fi in SF

Jul 8, 2003

Michael Singer

Fast food giant McDonalds Tuesday continued its quest for providing wireless Internet access and took the wrapping off of its latest batch of hotspots during a launch party here.

The company, which successfully opened 10 kiosks in downtown New York back in March, said it is supplying local area networks via Wi-Fi at 75 of its Bay Area restaurants from SF to Half Moon Bay with the majority going "live" today.

Customers will be able to identify participating restaurants by signage that displays the Golden Arches in the universal Internet @ symbol. Cost for a two-hour wireless Internet connection at these locations is $4.95, with other purchase options available. Buying a Big Mac or Filet-o-Fish is not mandatory, however.

"We want the Golden Arches to be the first choice for a great meal and a place to go wireless," McDonald's West Division President Don Thompson said.

As before, chip making giant Intel is helping with the launch, providing sponsorship, technology and a joint marketing campaign. But instead of using Cometa Networks as its provider, McDonalds has tapped Austin, Texas-based Wayport. The wireless ISP is best known for its hotel and airport contracts including seven major airports: Dallas-Fort Worth, Seattle-Tacoma, San Jose, Austin-Bergstrom, LaGuardia, Oakland and Minneapolis-St. Paul.

Cometa is a partnership between IBM, AT&T and Intel.

Intel and Wayport have worked together in the past to promote hotspots based on Intel's Centrino wireless chipset. McDonalds said all of its Wi-Fi restaurants are verified with Intel Centrino mobile technology.

"And now in the San Francisco Bay Area, these guests will be able to connect either directly through Wayport or through our 'roaming' partners who in total serve more than 60 million consumers," said Dave Vucina, CEO of Wayport.

Oak Brook, IL-based McDonalds is expected to launch several hundred restaurants by year's end. In addition to New York and San Francisco, Chicago has been tapped as the third U.S. metro area for wireless access in McDonalds franchises. The company said A number of New York City and Chicago McDonald's restaurants will soon offer Wi-Fi access. McDonald's recently launched Web site dedicated to finding their wireless sites only lists the 10 restaurants in Manhattan.

The New York promotion included a three-week campaign where customers with wireless laptops who purchase an Extra Value Meal at participating McDonald's restaurants will get one hour of free high-speed wireless Internet access. Customers could also purchase a single session of up to 60 minutes for $3.00.

Independent of its nationwide rollout, the company has already signed up to deploy hotspots in some of its franchise locations. A McDonalds in Media, Ohio claims it is the first Golden Arches in the nation to offer both 802.11b Wi-Fi Internet access and regular hardwired access.

Overseas, McDonalds of Japan and investment firm Softbank are discussing installing up to 4,000 hot spots in the restaurant's Japanese outlets. Australia-based Telstra said it in negotiations with McDonalds to complement Telstra's existing $3 million wireless network, which already covers Qantas airport lounges and Rydges Hotels.

But with wireless hotspots on the rise -- current estimates pointing to some 78 million wireless consumers nationwide -- analysts say McDonalds' choice to host hotspots is less about the technology and more about getting more customers in the door.

"I think it's as much about McDonald's and incremental money from food as it is about how McDonald's is ubiquitous," said Jupiter Research analyst Julie Ask. "They are everywhere. And if they are everywhere, and they put hotspots in their restaurants, then there's a great footprint of Wi-Fi access points. So it's less about public hotspots than it is about piping information out of McDonalds."

Ask says right now the majority of McDonalds customers do not own laptops or PDAs.

"But that will the story two to three years from now when consumers have handhelds or laptops with Wi-Fi cards and when the price of devices comes down," Ask said.


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