T-Mobile HotSpot Impact on WISPs

Rafe Needleman from Business 2.0 believes that T-Mobile’s deal with Starbucks increases pressure on independent Wi-Fi providers. Starbucks and T-Mobile have the resources to build out a network with vast coverage that smaller players can’t match. But Glenn Fleishman of 802.11b Networking News doesn’t agree. He thinks that the deal helps everyone and validates the Wi-Fi business model. In fact, he thinks that T-Mobile’s high costs creates an opportunity for smaller players to offer lower cost services. I’m not sure I agree with Glenn on this one. At this stage in the market it’s all about getting to predictable ubiquity and Starbucks and T-Mobile have the resources to get there. I think the costs associated with T-Mobile’s T-1s is being overhyped. They are spending money for T-1s to make sure they can handle the traffic that their marketing will generate. If the marketing doesn’t pan out, they can always downgrade to reduce costs.

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