University's Partnering With WISPs

At first blush, the announcement that T-Mobile Hotspots was partnering with American University in Washington, D.C. in order to augment the WiFi coverage on campus seemed pretty good: The students get increased choice, coverage, and value from a WiFi subscription that connects them on campus and at the most nationwide hotspots any single WISP could offer. T-Mobile gets potential new WiFi subscribers. One problem is scalability – this is just one university campus. It becomes very costly and cumbersome for T-Mobile to scale this to many campuses. SK Telecom has tried a similar strategy with a program called NATE Campus, which allowed Korean students to get PCMCIA cards or PDAs which accessed an SKT WiFi network on campus, and EV-DO off campus. The program was reasonably successful, but we’re unaware if it was profitable. However, an important benefit of the university partnership is the potential of attracting new subscribers to T-Mobile phone service, either through increased brand-awareness, or bundling deals. With industry subscriber acquisition costs hovering around $300, ‘Get ’em young’ is the order of the day.

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