At their investor day at the European CeBIT conference, Deutsche Telekom (T-Mobile's parent), said they grossed US$1.4M per month in the U.S. for hotspots: Analyst James Enck, a telecom analyst for Daiwa Securities SMBC Europe, wrote in to note that in answer to a question at the presentation, a Deutsche Telekom official said the U.S. T-Mobile hotspots were grossing US$400K per month in January 2003, but $1.6M by the end of year.
Enck noted, however, that with 4,200 locations by year's end, $1.4M works out to $13 per hotspot per day on average. This is slightly higher per store revenue than estimated a year ago when Starbucks slipped the news that they were averaging 25,000 sessions per week. At that time, I was estimating an average of $150 of gross revenue per Starbucks locations per month. The more current numbers are triple that.
But with roughly $400 per month per store, how does T-Mobile ever expect to even pay on a current basis for the cost of each store's dedicated T-1 line, much less other ongoing costs, and the original capital expenditure? They would need to at least quadruple this revenue figure to pay out CapX and current operational costs.
Enck also noted that Deutsche Telekom will offer Wi-Fi in Germany as an add-on for upcoming TDSL subscribers, a DSL service that the company is launching next month. The add-on price will be an initial unlimited usage plan for €9.99 per month, but switching in October 2004 to three hours for €9.99 and then €.08 per minute thereafter. In the U.S., T-Mobile's unlimited rate is $19.99 per month for T-Mobile cellular customers.
(You can hear these numbers in the video of the presentation during the question and answer segment.)