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August 10, 2003

Wayport's Lead May Remain in Place with SBC Deal

In a crowded field, does being an early adopter help you sustain your lead? Wayport will find out: Monday's New York Times features this piece by yours truly that focuses on Wayport's role in the development of broadband access, increasingly Wi-Fi, in business locations. I've been interviewing folks for weeks, and the timing couldn't be better: the article almost ran last Monday, before Wayport and SBC announced their deal, discussed in the article. Sometimes the stars align. A week earlier, and the article would have asked more questions about Wayport's long-term future, but after last Wednesday, it's clear they have a great potential to continue to have an edge when recruiting new venues and reselling their service to new partners.

It was a great experience writing this, my first feature for the Times's Business section, in that I had a chance to talk to the heads or top executives of most of the hot spot and hotel broadband firms. It's really the culmination of weeks of short articles and other work in which I've spoken to most of the cellular operators and many of the companies rolling out hot spots in their own locations, such as Marriott International, Schlotzsky's Delis, and McDonald's.

What are some conclusions that I made outside of the scope of this article?

1. Airports may have to offer much more on the table than Boston-Logan was willing to in the first draft of their request for competitive proposals. Clearly, requiring that the Wi-Fi contractor build their own physical plant (wired backbone, more electrical outlets, service closets, etc.) isn't a winning strategy in the eyes of potential bidders. Expect more on this as deadlines pass.

2. The number of hot spot locations is growing faster than I realized -- the big push is finally on, and the financing isn't coming from the hot spot operators. Because locations are investing in their own infrastructure, the last piece is in place to have thousands of locations unwire in the next six months.

3. Free or for-fee isn't as critical an issue as whether the infrastructure companies like Wayport can derive enough revenue for profit and growth by building out service. The consumer side of the equation may still be up in the air, but Wayport's model is increasingly to take a very small per-use fee in exchange for having more and more locations at which they collection those tithings.

1 TrackBack

TITLE: Wayport's Lead May Remain in Place with SBC Deal URL: http://radio.weblogs.com/0100368/2003/08/11.html#a1407 IP: 67.83.38.76 BLOG NAME: Audioblog/Mobileblogging News DATE: 08/11/2003 03:29:45 AM Read More

1 Comment

Great Article Glenn. I broke down your numbers on the daily revenue per hotspot and Wayport still has a way to go before making meaningful money. Here's what I came up with:

Wayport Revenue

Number of Connections: 170,000

Number of Hotel Locations: 500

Connections / hotel: 340
Connections / hotel / day: 11


________________________
Reveue / Hotel / Day

........................
Per Connection Total
________________________
$0.50............ $5.48
$1.00............ $10.97
$2.00............ $21.94
$3.00............ $32.90
$4.00............ $43.87
$5.00............ $54.84


Regards,

Michael Tippett
www.BlueHereNow.com