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BT Catches Undeserved Flack Re: Hotspot In A Box

Two days ago, Mike posted regarding British Telecom’s announcement that it would offer a simplified Hotspot-in-a-Box to location owners around Britain, enabling a turn-key solution with backhaul provided by BT. Toshiba will provide the hardware, and roaming between Toshiba’s global hotspots and BT’s. Now, some analysts and reports say BT is going down the wrong path, I disagree. Not only is BT driving broadband sales, but they are combining the best parts of current hotspot business models. Hotspots have two distinct economic models: 1) the Mom’n’Pop Model, with low cost gear and a DSL backhaul which essentially has a total cost basis of $60/mo. ii) The Carrier Grade model that Andy Seybold always cites with $2000 worth of gear, carrier-grade network management, and a T3 (Andy suggests the backhaul should match the max. speed of the wireless link. Why? Dunno. Let’s be more reasonable and suggest a T1.) Resulting cost basis: $500/mo. Most commercial deployments use the second model, and can’t make a profit with the low number of users we currently see. However, it would only take a dozen customers per month to cover costs in the Mom’n’Pop shop, even at $5 per visit (as Mike always points out, extra laundry or coffee revenues could cover the $60/mo). What BT is doing, is offering carrier-grade roaming, AAA, and management, with the best elements of the Mom’n’Pop model. That’s a formula for success. Granted, BT needs to be in the Airports and conference centers as well as the Pubs and laundromats, so they must continue to develop the high-traffic locations in a parallel effort. I agree with a point by Scott Rafer, Chairman of WiFinder who sent me an e-mail yesterday commenting; “Billing will consolidate, physical ownership will not”.

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