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Fixed Wireless Business

Café Olé!

Members of the ISP-Wireless list find much to discuss as they pore over the potential opportunities presented by the placing of an access point in a posh coffee vendor's shop.

[April 30, 2002]

On the ISP-Wireless list in April, JD inquired,

"We've got a café in range of us, and they want to do a hotspot sort of thing. The café caters to the more affluent residents of the area, and it represents a great marketing outlet for us—not because people will use the hotspot, but because it will give them a taste of what's available if they sign up to get our service in their home or office.

So how should we structure the service? Should it be free? How about a revenue-based system where the café collects money for PC card rental? Or how about a way for anyone with a laptop and a wireless card to connect to our proxy, shifting the revenue collection from the café to us? What works for you?"

A number of respondents discussed the viability of offering access at the café for free:

[KM offered] "We have a model set up where we provide the bandwidth and public AP to the café so that they can provide free access to their patrons via their patrons' equipment. This helps increase foot traffic to the establishment and encourages patrons to spend more money at the café while they surf."

[MV noted] "Cisco has an article on this kind of setup at their website. In the article, a Cisco executive is quoted as saying, 'Anything to make the customer stick around a little longer and order another cup of coffee or another muffin.'"

[MJ warned] "Set it up as a free-for-all, and the locals may just drink a lot of coffee with their laptop and never buy your service."

Others recommended using a proxy signup system instead:

[RH advised] "Giving it away for free won't get you new subscribers to your main service. 802.11b or WLAN PC card rental does not really work, because users need to install drivers and software for the cards, and cafés need to make sure that cards are not stolen. We have just launched our first wireless Internet Wi-Fi hotspots using the proxy signup system: the model is to charge on a per-minute basis. For your application, you would probably want to consider bundling the hotspot access in with a regular WISP service account. This would be attractive to current customers, and you'll find that hotspot novices will be pleased to see that the broadband service is available from their home as well on the same account. We've seen a lot of our hotspot customers asking if our broadband wireless will work in their homes as well: I wish it did!"

[DH agreed] "I think the best way to do this is in blocks of time depending on location. Let the user choose, for example: $5 for one hour, $9 for two hours, $15 max per day, or so much per month. Anything else becomes difficult to manage. I'd also suggest something like giving the user a coupon to 'TRY IT FREE for 5 minutes' with the purchase of a cup of coffee (maximum of one per week or month). This should not be difficult to build."

SS suggested taking a looking at established models to get an idea of the options available:

"I suggest exploring hereUare.com, LANRoamer, and Boingo. Although Boingo (from what I have heard) won't talk to very small wireless hot spot providers, their model is very illustrative of the trend towards wireless hot spots. It's worth studying what Boingo is doing, even though they're not directly applicable to your particular situation.

hereUare is a service that will handle the billing, authentication, and at least some affiliations, and you can detail how the revenue gets split: some to you and some to the cafe, or all to the cafe which then pays you for providing broadband connectivity. LANRoamer does the same things as hereUare, but lets you control all the elements yourself. I would suggest treating the hotspot as a completely separate line of business, but set it up so that subscribers to your access service get to use the hotspot services free, and others pay hourly rates.

I think wireless hot spots are a very natural new line of business for WISPs, because WISPs can cost-effectively provide their own backhaul to such hot spots. Don't just think cafés, think:

• Truck stops
• Campgrounds where big RVs gather
• Marinas
• Airports (yes, even small regional ones)."

—End