SBC and Wayport at Micky D's

Reuters reports this morning that SBC will be offering Wi-Fi at up to 6,000 McDonald's restaurants as well as providing the Internet connections for these stores. Reuters notes that SBC had previously announced plans for 20,000 hotspots in UPS stores over the next three years. The Associated Press gives SBC partner Wayport the credit that Reuters neglected, reporting that "...Wayport Inc. will deploy SBC's FreedomLink Wi-Fi service in up to 6,000 McDonald's Corp. restaurants by the end of next summer." The AP article also provided details on pricing -- you will be able to purchase unlimited Wi-Fi access via all FreedomLink locations for just $19.95 per month (and that includes the Giants baseball stadium in San Francisco, SBC Park).

DSL figured prominantly in both the Reuters and AP reports. Reuters quoted Phil Redman of Gartner as saying that FreedomLink "...seems like more of a plan to drive more DSL business than anything else for SBC. If you hook up every store to a higher speed network connection, that's great for them. The wireless part of it is a much smaller opportunity."

The AP article quotes Ray Wilkins, President of SBC marketing and sales as saying, "The agreement will help us create the industry's most extensive Wi-Fi footprint, and illustrates how Wi-Fi provides us with a range of revenue-generating opportunities, including revenue from transport services such as DSL."

The Indianapolis Star adds an important point for those of us that are not interested in dining at McDonalds. Writer Bill Hornaday spoke with Lauren McCadney, assistant vice president of Wi-Fi strategy for SBC, who observed that "With a wireless "cloud" that extends 300 feet, users can surf the Net in McDonald's dining areas, playground areas or parking lots."

Wi-Fi Networking News reports on the business model between McDonald's, SBC, and Wayport. In a prior article Wi-Fi News had explained Wayport's "Wi-Fi World" pricing model in which venues (such as McDonald's) would pay a flat fee for wireless services and then choose their own pricing model for subscribers. Glenn Fleishman reports that "SBC hired Wayport as a managed services provider to build out their own unique FreedomLink network." So under this arrangement it would appear that SBC pays Wayport the flat fee.

But since Wayport already had McDonald's as a client, will this arrangement with SBC result in lower revenue over time for Wayport? For Wayport the question has to be what is the long term value that they provide to SBC in building and maintaining the FreedomLink network? Without a good answer to this question, SBC may find that they don't need Wayport at some point in the future, and SBC will own the primary relationship -- with the venues.

And for its part, Wayport appears to be painting themselves into a bit of a corner. Reporter Eric Griffith for Wi-Fi Planet reports that during the four years of the McDonald's contract, Wayport can't work to install Wi-Fi for any other fast food restaurants. And T-Mobile, the largest provider of hot spots in the US, recently beat out Wayport at Hyatt Hotels, one of the last remaining hotel franchises. Are Wayport's days numbered?