Free internet for commercial buildings is always the bigger risk

Who doesn’t like a freebie, from the packet of Haribo sweets included in my Wiggle order, to free Wi-Fi at the coffee shop?

An experiment In Dan Ariely’s book, “Predictably Irrational,” illustrates this brilliantly.  Participants were asked to decide between spending 26 cents on a luxury Lindt chocolate truffle or spending one cent on a lower-quality Hershey’s chocolate kiss.  Those running the experiment observed an even split of choice.

However, when the prices of both items were lowered by one cent the choice distribution changed heavily. The price difference between the two chocolates was identical, but the lower-value option had become free. The addition of a “free” item meant the vast majority of participants now selected the Hershey’s kiss and demonstrated the appeal of “free”

The hidden costs of “free”

Free stuff is often irresistible, but it normally comes with hidden costs. I suspect the same is true in so many industries. Hospitality, for example, have battled with the demand for free WiFi – it’s just something we all expect now, isn’t it?

The price I pay for a cup of coffee should include heat, electricity to charge my phone and of course WiFi to jump online.  The fact is that none of these things are actually free – the cost to produce a cup of coffee is about 20 pence, but we are happy to pay around £3, which basically means these ‘free’ services are just part of the price.

Due to them being free (just like the chocolate selection), we are often prepared to forgo quality and control. Now, when it comes to chocolate that’s no major risk, but when it comes to providing internet in your office space, going for the free option carries a huge risk…

Free fibre internet for office space

The tag line pitched to landlords to “Connect Your Space with Free Fibre” is becoming more prevalent and on the face of it feels like a good deal, at least for the landlord. From their perspective, the space is connected and the hassle of providing instantly available internet for new tenants is gone.

But the truth is that the hassle really isn’t gone.  The whole point of providing these services is to get happy tenants in quickly. Happy tenants are not going to fuss about the rent and that’s the business landlords are in, to sell square footage.

Free fibre internet means a loss of control for landlords

Unfortunately, free to Landlord internet services means a loss of control for the Landlord over the quality of internet services that their tenants receive and what they will pay for it. A loss of control over a mission-critical service for them running their building and for their tenants doing business.

This is not the only downside to ‘free’ fibre. The truth is that someone will pay for the ‘free’ and that’s going to be your tenant, most likely through high prices and possibly a substandard service. It’s not just your tenant that will pay, internet is so mission critical that they are bound to complain and ultimately apply the pressure and cost back onto you as the Landlord.

A viable alternative to free fibre

So, that “Connect Your Space with Free Fibre” message isn’t looking quite so attractive now, is it?

The alternative for Landlords  is to invest a little upfront in a quality internet solution for their buildings, still ensuring that every office is internet-ready, but putting themselves in control of the service quality and ensuring that their tenants receive a fair deal. They may even make a small profit on the offering.