How to Make Money as a Wireless ISP

  • How to Make Money as a Wireless ISP

    Posted by Michael on August 12, 2021 at 9:00 am

    Chapter 14: How to Make Money as a Wireless ISP

    I have received calls from many people who want to start a wireless ISP (WISP) business, whether using a mesh/muni model or a point to multipoint (PTMP) system. Although I believe there is no better time than now, that doesn’t mean it’s easy, but I hope to prove that it’s financially feasible everywhere. Competing against satellite or cellular services like EVDO, WiMax, or even LTE is a no-brainer in areas that have no wireline services. I’ll cover the new Sprint/Clearwire LTE service just announced for Phoenix in another article. There are also other services like VoIP that can be provided, but for the beginning of this analysis, I will cover Internet services only.

    A WISP can serve three types of geographical areas:

    Rural – 20 or fewer potential subscribers per square mile;Suburban – 800 potential subscribers per square mile (1100 people per square mile in Scottsdale); andCity – 3,000 plus potential subscribers per square mile (Boston: 12000 people per square mile).

    Until now, the WISP business has operated using two design models: PTMP and WiFi municipal systems. I’m going to add a third model — Guerilla WiFi. Most major vendors support a PTMP model which is a centralized Hub and Spoke model. WiFi municipal systems are pretty well known.

    Guerilla WiFi is my idea of using smaller, cheaper radios to create hybrid PTMP and WiFi hotspot designs to reduce costs and improve capacity. Hotspots can be as large as entire neighborhoods or more. Guerilla WiFi is also scalable and this reduces implementation Capex. The tradeoff is that it requires much more on-site time and design work before being deployed. Each individual location will have to be physically site surveyed. Decisions need to made on how and what equipment should be deployed for the best cost/performance ratio. The engineers have to get out of the labs and ride some man-lifts to get the best system.

    So, let’s look at how each of these models can be deployed profitably. We covered inexpensive WDS based WiFi systems early on. I still stand by that model, but let’s analyze it a little more critically and see where it fits in the big picture. More important than anything, is it possible to build a system that has the financial strength to be a growing and profitable company versus Joe Technical’s weekend hobby?

    As many WISPs have successfully demonstrated, it’s possible to be profitable if you market in some rural areas. Assuming a starting company of 4 people, the revenue generated has to be around $40,000 per month to be profitable at the low end. I’m just summarizing some of the spreadsheets that I have used so you will have to take my word on the cost structure. With an average monthly rate of $30 per month per client, I calculate that it will take 1333 clients to make that amount of revenue each month. By all accounts, that’s a pretty impressive size to jump right into. Keep in mind this doesn’t include your original Capex repayment and the Opex costs while trying to ramp up to that many clients.

    If you are a hot-spot provider, you get revenue from hourly, daily, and weekly rates. Those markets are also shrinking in the US for the most part, but some entrepreneurs have come up with new ideas for phone users.

    In this discussion, I focus on monthly subscribers. There are also other revenue sources such as installation revenue, business rates that are higher than personal subscriber rates, and other normal ISP types of services. Additional services might require more staff with more expertise, thus raising the associated monthly costs.

    Michael replied 1 year, 1 month ago 1 Member · 0 Replies
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