Muni-Wi-Fi As A Sales ToolThursday, May 03, 2007
Muni-Wi-Fi is still being written about by many local city newspapers around the nation. I get at least one or two calls a week from business reporters about this subject. Every time a new city announces plans to join the muni-Wi-Fi ranks, my name seems to come up and the reporters call.
The one I received yesterday from a smaller mid-western paper is a perfect example. I was asked for my thoughts about these systems and, of course, talked about interference issues, business models, and lack of indoor coverage. I also mentioned the fact that the “standard” deployment for muni-Wi-Fi a year ago was based on 30 access points per square mile and this year it appears as though the new standard has been increased to 60-70 access points per square mile and discussed the implications that has on overall system costs including backhaul.
This particular reporter told me that his city was going to let a private company build the system out at no cost to the city and no risk. He said it would be offering free Wi-Fi supported by ads and then a higher-speed of connectivity for around $20 per month. The city would provide access to the light poles and provide electricity, but beyond that would not have any financial involvement. My comment was that this was a wise decision on the part of the city. In fact, the city had not even agreed to become an anchor tenant, so it has little to lose.
We talked about all of the costs, including the cost of customer service and care, backhaul and maintaining the system. And then I cited my example of a network, even a free network, that people use and then find is no longer available to them, even on a temporary basis, and the frustration that could cause customers.
This particular reporter, although he admitted he was a novice to Wi-Fi, was smart enough to grasp an important point. When we talked about reliability and if muni-Wi-Fi was a threat to existing cable and DSL providers as well as to the wide-area wireless community, he said that from his vantage point it could actually be a sales tool for the incumbents because if people who are now on dial-up or have not accessed the Internet before started with the free portion of the network and then found it was not reliable enough but had been hooked on access, they would probably look around to see who offered a more reliable service and would sign up for one of these services even if it cost more money.
I laughed and told him that his assessment, as far as I am concerned, is right on the money and proceeded to tell him a story out of my past. When I first got into two-way radio, years ago, and owned my own two-way radio sales and service organization, one of our targets was gas stations with one or two tow trucks. Typically, I would call on them, explain the benefits of two-way radio and then give them a quote for a base station and two mobiles in the $10,000 price range. They went into shock and told me no thanks.
They then went out and bought several CB (Citizens Band) radios, installed them at the station and in the trucks, and started using them. What they found was that they worked great and provided communications between the station and the trucks, but only over a very limited range and, in many cases, they had to contend with interference. A few months later, they would end up calling us saying they wanted to purchase our two-way radio system. Their CB experience proved to them that two-way radio was a valuable tool, but the CB bands were too crowded and unreliable and only worked over short areas. Our professional-grade two-way radio systems were on licensed spectrum and worked over far greater distances with a minimum of interference.
I think this reporter and my earlier experience are right on the money.