Wireless Wealth

Getting Started

Ready to roll out a hot spot? Using one of the turnkey products already on the market is the accelerated path to Wi-Fi involvement. Even with limited technical proficiency, you can become a hot-spot operator, and the hardware costs have come down significantly--$300 to $700 today, compared to $1,000 to $2,000 a year or so ago.

Ready-to-go solutions include the Hot Spot in a Box from Boingo Wireless, FatPoint from FatPort, the Routing Access Point from NetNearU and the Hot Spot Controller from Pronto Networks. Each solution provides a slightly different set of features. Some are more customizable, some provide better revenue-sharing opportunities, some are easier to set up and maintain, and some include marketing and promotional help. All these solutions include roaming agreements with one or more major aggregators--so you can capitalize on business travelers passing through town who need Internet access.

Whether you're choosing a turnkey hot-spot solution or developing your own, you need to consider roaming arrangements with hot-spot aggregators as a fundamental part of the value proposition. Roaming is essential to attract the 27 million business travelers who take laptops on the road. Traveling employees need to know they can connect in any hot spot without joining a new network.

Roaming partners publish up-to-date directories of partner locations so customers always have the most current list of hot spots, and some roaming partners like Boingo publish that directory directly to the software on users' laptops. Increasingly, Wi-Fi customers are looking for roaming locations when they choose hotels and airports for travel. If you haven't ensured a roaming deal, you won't be in the database when that traveler is looking for a connection in your town.

Finally, some roaming providers will pay you a cash bounty for new customers you sign up for their service. This can be a great revenue stream, so ask about customer acquisition bounties when choosing a hot-spot solution.

Covering All the Bases

Deep Blue Wireless in Menlo Park, California, is making money from Wi-Fi on a spectrum of services. Founder Alan Gale, 39, explains the business: "As a hot-spot operator, we seek out and establish relationships with location owners and deploy a wireless solution. As a wireless Internet service provider, or WISP, we seek out customers who gain access at those locations."

There are five parts to the Deep Blue business model: public hot spots, public access kiosks, tech services (like faxing, printing and voice), residential broadband and consulting. "We're integrating all these things together," says Gale. "And we're layering tech services over access to increase revenue per user." The company stays focused on core business issues by using Pronto equipment and back-end services, to keep the technical complexities to a minimum. Gale knows the wireless industry is still evolving. He's seen even well-funded wireless companies close their doors. "But we'll survive by being smart and not moving too quickly with the rollout. We get rid of bad locations and tweak our pricing and offering for each new market."

The company's networks attract more than 1,000 unique logins per month and generate 400,000 network minutes. Deep Blue hopes to hit $1 million in sales this year. -D.W.

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This article was originally published in the July 2003 print edition of Entrepreneur with the headline: Wireless Wealth.

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