Analyst labels McDonalds' wireless strategy "confusing"

"It is confusing and expensive," IDC senior analyst for wireless communication, Warren Chaisatien, says about the hotspots set up by Telstra in 44 McDonalds restaurants in Australia.

Chaisatien adds -It has a very high cost in both corporate and consumer perspective. You go into McDonalds and order a AU$4.50 burger and pay around AU$6 to AU$10 for your WiFi use. It is more expensive than the food you are eating.

"In the past, Telstra has targeted business users with their hotels and airport hotspots but I think a fastfood chain is totally different. They are trying to attack both ends of the market, the regular fastfood consumers and the businessmen," Chaisatien says.

Leica Ison, Telstra general manager for messaging, says McDonalds was chosen mainly because of its global coverage and wide range of locations in the country.

"The partnership makes a lot of sense especially since we want to emphasise customer awareness on this technology and the best location to tap into people is in places where people often stop, like McDonalds".

Tibor Schwartz, Telstra group manager for wireless messaging, says they are also looking at other locations for the hotspots in the next couple of months, mainly in areas where people on the go stop to take their breaks or do some work.

But Chaisatien believes the Australian market is not ready for the café and fast food hotspots. "It is a deliberate experience. People do not intentionally carry their laptops to fastfoods and cafes like they do with their phones. In general the move is good, but I don't think there is money to be made in this market. No wireless hotspot provider in Australia is making money". In a strategic level, Chaisatien believes the fasfood hotspots are a long shot. He says revenue of this will come in the long run, especially if price points go lower for customers by the end of the year.

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Talkback 6 comments

    What a load of old cobblers. H ...Anonymous -- 28/02/04

    What a load of old cobblers. How many cashed up teenagers have you seen sitting in a Maca's with a laptop surfing the web. Go to one of the many internet cafes - its $3 an hour at most and you can nail you friends playing quake/ut whatever.

    McDonald, a fast food store, d ...Anonymous -- 29/02/04

    McDonald, a fast food store, do not go with wireless access. The environment is wrong.
    As a wireless user, and one who have used much better service overseas, I would not want to go online at McDonalds. I'd rather go to a cafe, have a cup of Cappuccino and perhaps a cake, then having a Big Mac and having lots of rowdy kids around you.

    <a href="http://www.pu ...Anonymous -- 01/03/04

    <a href="http://www.public.net.au">Public Networks Australia</a>, the first company to provide free wireless hotspots is making money. Why pay upto $10 per hour to check your email when you can do it for free at one of out locations

    Of course there is no demand f ...Anonymous -- 10/05/04

    Of course there is no demand for hotspots at the moment - the pricing is non-sensical, when you're paying $10-12 for your lunch and $10-12 for your 1 hour WIFI access. I am a Field Engineer and have used Azure WIFI access and would definitely use it more often if pricing was more competitive. Give me a reasonable monthly subscription (comparable to broadband access plans) or package it with my current ADSL access at a reasonable rate and I will use it. Give me access at all major shopping centers (food courts, cafes, restaurants, airport) and I will use it.
    Make public WIFI access affordable and accessible now or risk losing the market to 3G.

    I've been on wireless for 2 ye ...Anonymous -- 13/05/04

    I've been on wireless for 2 years now. I agree with McDonalds being good. Cafe's are better, but when you don't have a net connection, how do you find them??? At least you know where the nearest McDs is. I've got sick of waiting for wireless access at a reasonable price, even on USA trips. Last week I bought an O2 XDAII; now I can get email, VPN and surf anywhere there is Optus mobile coverage. Jobs done.

    I recently bought an xda phone ...Anonymous -- 17/03/05

    I recently bought an xda phone, it has wireless 802.11b capacity and runs skype (a free IP Telephone software). Anyone can set up a free wireless access point and it effectively lets you make free mobile calls to other skype users. Telstra would be missing out on a substantial amount of GPRS fees if Mcdonalds were to allow free wireless. Telstra will make a loss and scare competitors out of an apparantly unprofitible market and capitalise on their monopoly once the technology matures. In the mean time this is done purely to keep consumers where they are, with GPRS. How does this benefit Mcdonalds though?

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