Best of the ISP-Lists

Discounted Wi-Fi

Members of the ISP-Wireless list discuss the opportunities and perils made possible by offering low-bandwidth Wi-Fi for a low price (such as $24.95 per month for 128 Kbps).

[August 15, 2001]

On the ISP-Wireless list in August, JS queried,

"To lure dialup users, I'm thinking of offering a $25 per month, 100 Kbps wireless account; it's the only way to beat DSL and cable in this town. The question is, how much support work do you think we're likely to face by catering to the masses like this?"

Some respondents commiserated that they're in the same boat:

[JD agreed] "We're planning to offer $29.95 per month 256 Kbps service, and I've been considering $9.95 per month 64 Kbps wireless service to get people hooked. As far as your concerns about support work, you're rarely going to be providing support when the customer doesn't have to deal with setting up a dialup number, putting in modem strings, installing TCP/IP, et cetera. "

[RL added] "The only way I can see competing for residential clients is to offer a $24.95 per month 128 Kbps service."

Others urged JS to consider other differentiators than price:

[TI warned] "You are either crazy or inexperienced. We have cheap cable here, as well as DSL. My lowest wireless price is $250 a month with a one-year contract, and my customers pay for my CPE upfront.

We are busy installing wireless. It's called salesmanship, and offering something different. If you think you have to win on price, you're not likely to succeed."

[JH agreed] "If you provide a superior service, you will survive even when those competing against you try to undercut you. We were the last ISP in town to go to $19.95, and we only did it when the telco reduced our monthly rates to justify it. Now our competitors are at $16.95, or gone. We are still at $19.95, and growing to this day."

Still others noted more dangers JS might face by pricing his service so low:

[JT observed] "Since most cable modem services are less than twice the price for as much as a hundred times the speed, you're likely to gain those who require the most hand-holding."

[KS added] "Be careful: any business model with this technology that extends your break even point beyond about 10-12 months will fail. The technology will change, and replacing all the radios when you haven't broken even yet will kill you."

[JM pleaded] "Let's not commoditize this market. We all have a chance to do this right this time; the last thing we need is a $4.95 per month wireless Internet service. That's where this kind of pricing will lead. It happened with dialup, it happened with web hosting, and it's happening with colo."

[JR agreed] "The minimum price for broadband should be $49.95, and only with a three-year commitment and hardware paid for up front. I would truly hate to see a price war start up with wireless."

—End

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