McDonald's Wi-Fi Bid Will Compete With Starbucks

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November 11, 2003 (9:51 AM EST)

McDonald's Wi-Fi Bid Will Compete With Starbucks

Care to super-Wi-Fi that Big Mac or Chai latte?

That is the likely choice business and enterprise Wi-Fi users will have, as McDonald's takes another step in the direction of competing with Starbucks' already thriving Wi-Fi hotspot universe. The fast-food company announced Monday that it will follow iPass Inc.'s Wi-Fi certification regimen in its hotspot rollout.

McDonald's is completing a series of trials to test out its planned Wi-Fi rollout next year, and the deal with iPass indicates the restaurant company is targeting business and enterprise users.

In a statement, iPass, which operates its Global Broadband Roaming network for enterprise customers, said: "Fast and convenient service availability, and a uniform customer experience come to mind when one thinks of McDonald's. The simplicity of the iPass service together with the convenience of the vast number of McDonald's restaurants in the United States and around the world is extending the productivity potential of Wi-Fi to mobile professionals."

iPass recently announced that it has 2,500 hotspots. That would place the Wi-Fi network firm within striking distance of T-Mobile, which claims some 2,700 hotspots in Starbucks, Borders bookstores, and airport lounges. McDonalds has been testing out Wi-Fi hotspots in its fast-food locations in more than 200 sites in the U. S. Three service providers--Cometa Networks, Wayport, and Toshiba's Computer Systems Group--are all finalists competing in the McDonald's trial. The service providers would have to be compatible with iPass technology.

"As we consolidate our Wi-Fi plans in the U. S., our global initiative will likely involve many Wi-Fi operators across our worldwide operations," said McDonald's executive Mark Jamison. McDonald's is also testing hotspots in 25 countries.

Both Starbucks and McDonald's have Wi-Fi policies of presenting the service to as many customers as possible, which means making connections possible in an area surrounding their locations. For McDonald's, which serves more customers in cars than inside its locations, that means having the service available in parking areas around its locations. Starbucks and Borders Wi-Fi users are more likely to use the service inside their respective locations.

And then there is the all-important question of price. Through T-Mobile, the Starbucks' pricing is relatively stable--it's typically $6 an hour and $39.99 a month. McDonald's has been testing various pricing schemes at its 200-plus trial locations. Some have been as high as $69.99 through an arrangement with AT&T Wireless, but there have been some free introductory offers, too. Sooner or later, many Wi-Fi providers will have to contend with free service offered by public libraries and others.