Telepocalypse

Public WiFi business models

Following on from yesterday’s discussion on how transport is a loss leader for getting people to engage in transactions, I thought I ought to point out the obvious regarding business models for public WiFi.

I believe that this market will fragment into three components:

• Free access given away as a public good.
• Free access to attract people to geographical locations to engage in transactions. The user need for access dominates the need for the transaction at that specific location (coffee, burger, etc.).
• Paid access where people engaged in transactions need access as an auxiliary service. The need to catch a flight or attend a conference venue dominates the need for access.

These could also be thought of as being in increasing order of captivity. Relay of access through a persoanl DSL connection to the park outside appeals to a totally non-captive audience. Municipal wireless access will act likewise.

The fundamental nature of WiFi is its short-range nature, notwithstanding those with large Pringle can antenna collections. It is geo-centric. You have to go there to experience it. Companies pay large amounts of money to display commercial messages in public spaces (TV, billboards, magazines, etc.). In your own commercial domain, there is no charge to make a pitch at a potential customer. WiFi in this case isn’t competing against other forms of access. It’s economic model is in competiton from advertising.

When your audience is already captive, then you’re going to have to adopt a different model. They have to be truly captive as this story shows. Then you can milk them to the point that outrage kicks in. People pay to go to the toilet at major UK railway stations, and they’ll pay to access the Internet when they’re already engaged in a transaction tens or hundreds of times as costly as the access charge.