McDonald's: The Winner is Wayport

By Eric Griffith

April 13, 2004

UPDATED: The fast-food chain's face-off between Wi-Fi hotspot providers comes to an end with Wayport winning the contract to take the network nation-wide.

If you don't have Wi-Fi in your local McDonald's restaurant, you might soon.

Wayport of Austin, Texas, has been picked by the fast-food giant to install Wi-Fi hotspots in about 6,000 locations across the United States in the next year according to Jim Sappington, the vice president for US Information Technology at McDonalds. That is about half of the total number of McDonald's locations in the country.

This news comes after McDonald's spent the last year testing out networks from Wayport, Cometa Networks, and Toshiba SurfHere. Wayport will now take over the networks in McDonald's locations that were installed by competitors. Wayport already provides the service found in the San Francisco/San Jose, Portland, Boise and Raleigh areas. McDonald's hotspots are listed online at McD Wireless.

Sappington said McDonald's ended up choosing Wayport do to the network based on the "sophistication of their solution... it lets us combined business applications and customer applications like Wi-Fi." Business applications in the future will include a rollout of cashless debit/credit system for purchasing for food. That system's rollout will be timed to coincide with deployment of the Wayport network.

This deal is likely to be a blow for both Cometa (lessened only by that company's contract to provide Wi-Fi at Barnes & Noble locations) and Toshiba SurfHere -- for the latter it could be the death blow. Unlike most of the hotspot sector, SurfHere has not made any announcements in several months.

Sappington confirms that Wayport has already converted the SurfHere locations in Illinois and Wisconsin-based McDonald's to join the Wayport network. Wayport is working on converting the Cometa trial venues in New York and Seattle now. Wayport will be doing network upgrades as it goes along.

McDonald's will charge $2.95 for two hours of use on the Wayport network. During the trial phase the company had experimented with several promotions, such as giving away access if someone bought an "extra value meal." Some of those promotions may continue.

Roaming partners will also be announced soon. Wayport is already a partner with aggregators iPass, Boingo and GRIC. While Sappington confirmed subscribers to those services will be able to use McDonald's hotspots, it turns out it's not automatic. Dan Lowden, vice president of marketing for Wayport, says because this is a different business model than Wayport's hotel/airport deployments, the company will renegotiate with all roaming partners. They expect to have information on roaming partners in the next 30 to 45 days.

This is a major victory for Wayport, which provides networks (wired and wireless) in hotels and airports. Wayport is also powering the Wi-Fi hotspos that will soon be found in UPS Stores as well. Once these deployments are complete, Wayport will likely be the number one public Wi-Fi provider in the US. Currently the market lead belongs to T-Mobile Hotspot, which provides service in Starbucks, Borders Books & Music, and Kinko's locations. Starbucks has become somewhat synonymous with hotspots -- a position the McDonald's hopes to usurp.

McDonald's hotspots are indicated by door signs with the golden arches and an Internet @ symbol.

Sappington says that when the media covers hotspots there's a lot of emphasis on use of laptops, but he is just as interested in the other devices coming out that could use the high speed connections, such as phones and MP3 players --

"We're looking to the future a little bit," says Sappington. Perhaps we'll all be getting a music download or new ringtone with our future HappyMeals instead of a plastic movie tie-in toy.



Comment and Contribute
(Maximum characters: 1200). You have
characters left.