Wireless Internet service providers (ISPs) Redbutton and Hip yesterday presented two different models on who ultimately picks up the tab for Internet access in restaurant and coffee shops.
The question of how eateries mix Internet access offerings along with their standard fare of coffee and food has been a bone of contention between them, customers and the various offerings being served up to the owners of such establishments.
In a country where broadband, or always on Internet access, is expensive, restaurants have been reluctant to offer completely free connectivity. However, they are faced, especially in Cape Town, with overseas visitors who often expect it to be free.
Yesterday, Redbutton, a three-year-old wireless ISP, owned by three former University of Cape Town students, presented its solution. It is based on proprietary software installed on its servers and routers, and allows a restaurant owner to slice-and-dice Internet offerings.
Balancing act
Redbutton director Barry Steyn says this allows a restaurant owner to decide if a portion of the access is given away, if it is billed directly to the customer on their overall tab, or if they want to sell a voucher separately.
"What we have found is that restaurants want the people to come in, but don't want them to loiter for hours over one cup of coffee," he says.
Steyn says Redbutton's solution also gives an owner the option of offering free connectivity at certain times of the day when the establishment would normally have few customers - a period commonly known as the "graveyard shift".
One of Redbutton's sites is at the Cape Town coffee shop and bakery Depasco, where manager Jono Ruster says the service has offered the business an extra revenue stream.
"Because our WiFi signal can be picked up by those living in flats across the road, they often come over and buy vouchers from us. The connectivity is excellent and they seem to rate it," he says.
Redbutton's offering includes a landing page on which the restaurant's logo and other information appears and vouchers can be bought directly from it.
Third party pays
Technology entrepreneur Roy Ingle's Hip uses a model of ensuring the WiFi offering is free all the time and has a third party pay for it via advertising or sponsorships.
Hip supplies WiFi connectivity to the Vida eCafe coffee shop chain, but uses Mini Cooper and Virgin Money advertising and sponsorships to ultimately pay for the service.
Ingle says the models are no longer about the technical solution, but the way in which the business is able to bear the cost of connectivity.
"As an infrastructure supplier, you have access to a whole number of other providers and one should make use of that. People don't want to pay for their connectivity while having a cup of coffee. Everyone wants to give it [access] away, but no one wants to pay for it," he says.
With Hip's solution, the landing page displays sponsors' information and the customer may have to answer some questions relating to the product offerings.
"We see this as a win-win situation: the customer gets free access, the coffee shop gets customers, and the sponsors get directly to their target market," Ingle says.
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