New Zealand start-up advocates free Wi-Fi access

There is a growing advocacy for free access to Wi-Fi networks based on the argument that much of the connection charge paid by consumers goes for marketing and payment processing. On the other side of this argument, there are those who maintain that consumers, especially the business traveler, are more than willing to pay for reliable and secure Internet access. Now, a New Zealand start-up is going global saying that free Wi-Fi is going to win the race.

"Free access has to be the way to go," says Martyn Halsall, managing director of Wizz WiFi, based in Auckland, New Zealand. "Few companies are making money with a pay-as-you-go business model, but lots of firms want to build a network. We know customers will use Wi-Fi if it’s low cost."

The foundation of Wizz WiFi's business plan is that pay-as-you-go Wi-Fi access neither pays for its providers nor is it a go for consumers. The rapid global growth of Wi-Fi shows that consumers value convenience, wherever there’s a hotspot and whenever they want access. But while the benefits of wireless Internet access for the customer are inescapable, the competition for providers is fierce. Organizations around the world want to get in on the act and build their own Wi-Fi networks.

Charging justified?

"But what’s up with the business model?," Halsall asks. "Early adopters are coming to realize the provision of Wi-Fi services is relatively inexpensive. Because of this, it’s difficult for providers to differentiate themselves on price alone. With the hardware already so cheap and commoditised, how can providers gain competitive advantage while developing their own brand loyalties? And because Wi-Fi occupies a free, unlicensed part of the radio spectrum, how long can networks continue to justify charging for access at all?"

A small, but perfect, example of this can be found on the French Riviera. On the Promenade des Anglais, nestled between the large beach-front hotels and casinos, there is a small bar and restaurant called Le Queenie. The owners of this restaurant, Jacques Falisse and Andy McHardy, are formerly in the retail computer business and had installed a wireless local area network for their own use inside the restaurant.

"One day, we decided to open up the network to our customers," McHardy said. "We had the bandwidth and it didn't cost us anything extra. We wanted to do something to compete and attract new customers, and it's working."

The entire marketing campaign, so far, for Le Queenie consists of four sheets paper taped in the windows facing the sidewalk, produced on an ink-jet printer with the message, in French and English, that Wi-Fi is available for free to the restaurant's customers. It is the first and only free Wi-Fi access on the Riviera. Connection charges at neighboring hotels can be up to €20 (about US$25) a day.

"We have not been overwhelmed with new customers," McHardy said, "but it has certainly been worth the effort. The word is spreading and now every day there will be new customers coming in for a drink or dinner, and to use the Wi-Fi."

Revenue from advertising

So how, then, can providers make it pay? Wizz Wifi's Halsall say that one way would be through advertising content. But what if the customer doesn’t notice – or even care about – the promotions the service carries? "The evolution of the Internet shows bombarding consumers with banners and pop-up advertising leads, if anywhere, to turn-offs rather than to click-throughs," he said. "The Web timeline is littered with the virtual corpses of technologies that foisted content onto consumers who didn’t want it. Remember push technology?"

Halsall, reached in Baltimore on a business trip, said that Wizz WiFi has developed a way of displaying advertising it’s difficult to ignore. It recognizes customer tastes and knows in which loyalty programs consumers participate. "If only advertising content could be tailored to consumers as individuals," he said. "We’ve seen how effectively the customer experience can be managed through Amazon.com; consumers are less hostile towards brands to which they’ve developed loyalties than those pushed at them indiscriminately."

Software on the network server identifies each customer and delivers custom messages to target their purchasing habits individually, according to Halsall. Built on a secure database and requiring user authentication, Wizz WiFi’s application displays tailored promotions and messages that react to a consumer’s profile as required.

Content matching tastes

“It’s not obtrusive, but they certainly notice it,” Halsall says. “When customers log on, the software already knows what cards are in their wallet and what they’re interested in, so they get content that matches their tastes exactly. Special promotions, customer announcements, retail deals. They can all be programmed in quickly.”

On the user’s screen, the application occupies only a narrow ticker-style band that can be branded in a company’s own style and colors. Dynamic user configuration allows the customer to change the category of information being delivered.

Retailers, oil companies, airlines and other loyalty card operators will be able to offer free Wi-Fi access to their regular customers as a value-added service. And anywhere where there’s a base-station wi-fi will become a footfall generator for suppliers of all kinds, rather than just another part of the telecommunications infrastructure.

"If they’re your customer, you want to talk to them," Halsall says. "With this product, they can’t ignore you. You provide the access, they see the messages. It’s that simple."

Halsall's background

Halsall retired two years ago from PricewaterhousweCoopers to follow independent business interests. At PwC, he was responsible for a large team of consultants across Asia Pacific. He was the co-founder of Deloitte's SAP new Zealand implementation business, built aned ran a 30-person IT consulting business at Coopers & Lybrand, and was a specialist in systems project management for a California software developer.

He is a Chartered Engineer (UK Engineering Council); Chartered Information Systems Professional (British Computer Society). Previously, he was a member of the Institute of Management, and an engineering graduate of the Royal Air Force Academy, Cranwell.

Halsall is now part of a small team named KiWiFi that since September 2003 in New Zealand has developed an idea into what is described as "a world class business venture." KiWiFi is based at the e-centre, Massey University's business incubator, north of Auckland, New Zealand. An initial proof of concept was devised and during the early part of 2004 KiWiFi was born.

"Our business structure is conventional," Halsall said. "We are a start-up business and we have attracted investment capital to develop and deliver our idea."