Starting a WISP business on a tight

Transcription

Starting a
WISP
business
on a tight
budget
Copyright © WISPzone 2008. All rights reserved.
WISPzone is not responsible for the accuracy of the information presented in this
document and does not accept liability for any errors that might occur. Please
consult a network design specialist to prepare detailed technical specifications for
your hot spot project or WISP network and equipment design.
Introduction….
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For information: INFO @ WISPZONE.COM
2
Starting a WISP business is hard even if investment
money is plentiful and skilled specialists are available to
help launch the business.
Many WISPs start life however as a 1 person business
with very little capital to invest in the new company. The
business owner has to be multi-talented: technical guru,
marketing specialist, financial wizard and business
expert; and work 24 hours per day.
This document was prepared to help the one-personstartup WISP as a ‘how-to’ guide. If you have other
questions not covered in this document then please
email us.
Copyright © WISPzone 2008. All rights reserved
Contents……
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3
1.
2.
3.
4.
5.
6.
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12.
Starting a WISP on a tight budget!
Define the WISP business model
Economics of the WISP business
Finding the right WISP management tools
WISP network building blocks
Building out the ‘last mile’ business
Building a hot spot network
Finding the ‘goldmine’ niches
Customer support: key to survival and success
Strategies for business growth
Sales and marketing
Exit strategies
Part 1
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Starting a WISP
on a tight budget!
4
1
Start a
WISP
Starting a WISP on a tight budget
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• It is possible to start a 1-person WISP on a low budget
– However it can’t be done the way the big WISPs do it
• Big WISPs start with venture capital
– Big investment budgets permit the purchase of ready
made expensive technology and products to start up
the business quickly
– Big operating budgets permit hiring a sales team to
find customers
• The budget WISP owner has to be smart to succeed
– Do clever things with cheap hardware and free
software to deliver the same service as the big WISPs
– Do clever things with Internet marketing to find
customers: without spending money
1
Start a
WISP
Technology: unlimited vs. tight budgets
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• If money is no problem then a WISP can buy technology
– High performance full function wireless equipment
• Colubris, Proxim, Tropos, etc. ($1,000s/unit)
– Comprehensive software for billing and network
management
• Alepo, IntraISP, Capterra ($10,000’s)
• The secret to low budget WISP survival is knowing how to
buy cheap and get good deals
– Buy low cost hardware and install 3rd party firmware
• Senao, Compex, Ubiquiti (approx $100/unit)
– Don’t buy billing and network management software
6
• Build your own software using free open source systems
• Get software as a service and pay only when you make money
1
Start a
WISP
It is essential to be a multi-expert
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• The WISP-on-a-budget owner must be prepared to learn
new skills and adapt to new situations
– Business: what types of WISP opportunities are
worthwhile: how to identify the best opportunities
– Money: will a project make money and if so how much:
what is the return on investment
– Technical: find the best low-budget technologies
– Marketing: how to identify and attract customers
– Customer support: extremely important, satisfied
customers give referrals
– Maintenance: have a system in place to fix things fast
and avoid losing money
– Managing staff: growth requires staff
1
Start a
WISP
Knowledge is the key to success
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• Spend time learning about the open source technologies
that are used to build WISP systems
– Open source is free, but give back to the community
• Open source technologies that you will need to learn
–
–
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–
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–
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Linux operating system: the platform for open source
Apache web server
Radius authentication server
SNMP device monitoring and management
Captive portal
SSL encryption
Scripting languages (Perl etc.)
• Learn about free firmware for cheap wireless hardware
– OpenWRT, M0n0wall, Avansu, Locustworld
1
Start a
WISP
Look at the big picture
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• Analyze the WISP business plan
– If no business plan then prepare one asap
• Clearly define the business model
– What services; to whom; when; where; how much
• Study the economics of the business model
– Investment; operating costs; fixed vs. variable costs;
profit analysis; cost to grow business
• Prepare a cash flow spreadsheet to look at projections
and test ideas
– Do the number make sense?, is the business a good
idea?
– If not then what can be done to make the business
performance look good on paper
Part 2
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Define the WISP
business model
10
2
Business
models
What is a business model?
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• A WISP has many types of products/services that can be
sold to customers
– Decisions are based on region, customer type, etc.
• The business model describes how to do business
–
–
–
–
–
–
–
–
What services will be offered?
How are the services delivered?
What products will be required to deliver services?
Will products be offered as part of service or separate?
How are services charged: one time, monthly?
Will customers be charged for installation?
Will same service be offered to all customers?
Will customized services be offered?
2
Business
models
Find the right business model
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• WISPs have two basic business choices and can focus
on one or develop both
– Subscriber business opportunity
– Speculative business opportunity
• Subscriber opportunity
– Providing a service as part of a contractual agreement
– Cash flow can be projected with precision
– Low risk with modest sales margin
• Speculative opportunity
– Offer a service where a % of potential customers may
use with an unknown frequency
– Cash flow can only be approximately projected using
historic data for each location
– High risk with low to high margin sales
2
Business
models
Subscriber opportunity
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• The subscriber model provides a regular income for a
fixed period (contract) by supplying a wireless data link
– Customer might be a remote rural homestead requiring
connection to the Internet via a wireless link
– Customer might be a business that needs a wireless
link between two offices: but no Internet
– Customer might be a business that needs a wireless
link to the Internet plus web site design and hosting
– Etc.
• Customers will pay monthly for different types of services
during a fixed contract period
– Decide where to draw the line: list services offered to
customers and list what will not be provided
2
Business
models
Speculative opportunity
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• The WISP provides a service that customers may or may
not use for indeterminate periods of time
– Hot spot opportunity where the customer might pay
hourly for Internet access
– Wireless links for special events such as trade shows
that exhibitors might use during the show
– Etc.
• Each opportunity is a risk
– Spend as little as possible to offer the service
– Be prepared to pull out if expectations are not met
• Minimize the cost of testing/developing opportunities
14
– Develop a ‘wireless-kit-in-a-suitcase’ approach that
can be set up and taken down quickly
2
Business
models
Subscriber vs. speculative opportunities
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15
• Subscriber pros and cons
– Medium term income guarantee but modest margins
– Subscribers are extremely valuable in the long term if
the exit strategy is to sell the business
– Each subscriber is worth from $500 to $2000 so 1000
subscribers make the business worth $500K to $2M
• Speculative pros and cons
– A risk investment has to be made to offer a service
without any customer commitment
– Select the location very carefully: income opportunities
vary widely
– ‘Monopolies’ at busy locations give high returns:
airports, marinas, resorts
Part 3
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Economics of the
WISP business
16
3
Money
Economics of the WISP business
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• Money flows out of the WISP business in three ways
– Capital investment
– Fixed operating cost
– Variable operating cost
• Capital investment can be minimized with the right plan
• Fixed operating costs should be avoided initially, and
minimized later
• Variable operating costs means that money only flows
out when a larger amount of money flows in
• Money flows in from two types of opportunity
– Fixed term/price agreements
– Variable revenue sources
3
Money
Sources of money flowing in
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• Characteristics of fixed term/price agreements
– Income derived from last mile subscribers
– Upside: subscriber value improves business worth
– Downside: modest margins due to competition
• Variable revenue sources
– Income derived from hot-spots etc.
– Upside: can produce excellent financial results
– Downside: high risk, requires very careful analysis
• Other WISP income sources
– Operating wireless data links for businesses
18
• Fixed term/price but can be quite profitable
– Maintenance contracts for business telecom
• Competitive segment but profitable
3
Money
Money flowing out: capital investment
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• Work from home
– Avoid office installation costs
• Never purchase equipment for customer opportunities
where ROI is long term and requires contract completion
– Always cover the equipment cost with ‘installation
services’
– Or arrange for a customer equipment lease; banks can
advise about this
• Avoid buying expensive test equipment
– Off-lease notebook computer with shareware software
will cover 98% of testing requirements
19
• Don’t buy business /network management software
– Use shareware and software as a service
3
Money
Money flowing out: fixed costs
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• Work from home
– Avoid office rental costs
• Avoid paying for advertising
– Network with people: word of mouth
– Build a good web site: learn how to get a high Google
ranking
– Write a blog: share your knowledge, attract customers
• Don’t hire full time people initially
– Find people who will work hourly
• Avoid making fixed term Telco agreements that have a
cancellation fee
– Shop around to find flexible service providers
3
Money
Money flowing out: variable costs
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• Deliver customer solutions with expenses that disappear
if the customer stops paying
– Telco contracts that can be cancelled
– Equipment that can be reused with other customers
– Antenna site fees that can be terminated anytime
• Hire people per job
– Collect from the customer and then pay wages
• Negotiate up front partial payment from customers
– Cover out of pocket expenses
• Negotiate payment to vendors based on receivables
schedule
– Avoid out of pocket expenses
3
Money
Profits
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• Profit calculation: make sure all costs are included
– Profit = sales - costs
• Sales
– Subscriber fees
– Customer invoices per job
– Over the counter sales of products, accessories
• Costs
–
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–
–
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Amortization of capital expense (with interest)
Fixed operating cost
Variable operating cost
Cost to grow business (reserve for investment)
Owners salary
3
Money
Financial planning
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• A spreadsheet for projected cash flow is important
– Include all cost items and sales month by month
– Make spreadsheet adjustments month by month to
reflect actual business conditions
– Plot the profit/loss month by month
– Identify high profit sales
– Identify low profit /money loosing sales
• Make decisions about the business direction
– Analyze month by month results
– Focus on high margin business, avoid low margin work
– Use the spreadsheet to experiment with scenarios and
evaluate projected returns: price adjustment etc.
23
Part 4
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Finding the right WISP
management tools
24
4
WISP tools
WISP network management software
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25
• Several software companies produce WISP management
software for network operations management: essential
features are…..
– Customizable log in screens and customer interfaces
– Customer billing via: access code, scratch cards, credit
card, monthly subscriber billing, wholesale billing
– Login page disclaimer with conditions of use
– Login page banner advertising and banner management
– Traffic shaping to ensure optimum resource sharing
– Equipment failure monitoring with auto trouble ticket
– Remote management of wireless and router devices
from the network operations center
– Traffic statistics and billing reports with billing data
export for book keeping applications: Quickbooks
4
WISP tools
Software features: customization
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• Install the WISP business ‘look and feel’ in all network
equipment customer interfaces
– WISP / hot spot operator web site
– Login interface screen (splash page) with the WISP
graphic design
– Splash page click-through to the WISP Web site
– Disclaimer notice
– On-line information (manual, FAQ)
– Authentication code entry
– Credit card data entry
– Customer error messages
– Customer support request
– Customer targeted advertising
4
WISP tools
Software features: customer billing
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• Billing options permit testing and deployment of different
customer billing strategies
– Access code generator with a file format that can be
printed via standard software
– Off the shelf scratch cards available with time options
– Ability to generate custom scratch cards (WISP graphic
design + custom time options)
– Credit card billing with options to use different CC
processors (authorize.net + PayPal®)
– Monthly/quarterly account billing for contract customers
– Wholesale billing for business customers
– Report generated for usage (statistics)
– Report generated for sales processed (financial)
4
WISP tools
Software features: login disclaimer
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• When providing public services there are liability issues
where responsibilities must be declared
– All customers must acknowledge the terms and
conditions of use drafted by the WISP by clicking the
‘I accept’ button
– Downloading of copyright materials is illegal and the
RIAA will sue: customers cannot be prevented doing
this but the WISP must advise customers that this is
not permitted under the terms and conditions
– Advise also that the use of the wireless network to
capture information transmitted by users is illegal –
hackers may try to access passwords and other
information
– Seek attorney’s advice when drafting disclaimer
4
WISP tools
Software features: banner advertising
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• Banner advertising placed on the login page is a source
of income for the WISP
– Prepare banners centrally and distribute to all devices
in the WISP network
– Configure banners for individual devices, groups of
devices and globally
– Banner login page options include click-through and
non click-through (charge different rates)
– Banner updates should be immediately viewed by
customers on new login screen
– Timer available for free hot spot applications when the
customer can be logged out after a programmed time
to force repeat viewing of the banners
4
WISP tools
Software features: traffic shaping
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• Traffic shaping prevents users who transfer large files to
cause a slow down for all other users of the same
access point or Internet circuit
– Prevents a user who is downloading MP3’s or video
files to ‘hog’ the network
– Identify data volume transferred by each user
– Set breakpoints of data volumes to determine
bandwidth priorities
– When a user has transferred up to the first
predetermined limit of bytes then bandwidth priority is
lowered and file transfer slows for that user
– File transfer becomes much slower as other data
volume break points are reached
4
WISP tools
Software features: failure monitoring
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• It is extremely important that the WISP network manager
is informed as soon as a network device failure occurs to
minimize loss of income and avoid angry customers
– Automate trouble ticket generation on the failure of any
device or circuit
– Management system should constantly monitor status
of network components via SNMP (simple network
management protocol)
– System should send trouble ticket email to network
manager advising of outage
– System should send repair work order to field
technician via cell phone text message
– Automated call center message to inform customer that
outage is temporary and that repair is taking place
4
WISP tools
Software features: redundant systems
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• Ideal WISP management system supports low cost
hardware so that redundant system can be built
– Installation cost for two devices is almost the same as
for 1 device (wireless access points)
– Configure redundant equipment for ‘hot-standby’ so that
the network manager can activate locally or remotely
– Network manager responds to device failure alarm by
activating redundant device at the same location.
– Technician can repair failed device while backup device
continues to provide service
– When paying for node management, ensure that one
device charge only is made for redundant installation,
and that charge can be swapped from failed to standby
device
4
WISP tools
Software features: remote management
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• A single hot spot is easily managed by connecting a
computer to the device
• A WISP network with multiple devices in multiple locations
requires remote device management permitting central
management from the network operations center
– Devices support SNMP to permit remote management
including configuration of important parameters
– Central database of configuration files for all devices in
the WISP network
– Device independent configuration files permit device to
be replaced with different type but use same config file
– Facility to lock down device parameters which can take
the device off line when modified remotely
4
WISP tools
Software features: statistics reporting
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• Network planning requires information about the current
usage of the network, and historic network usage
– Extract data traffic info from any device in the network
– Define device groups, then access traffic info for the
group
– Extract time-varying information for individual devices
and for groups of devices
– Network device stats should measure the % utilization
of devices and circuits so that points where capacity is
exceeded can be identified quickly
– Information files should be downloadable in common
formats for loading into a spreadsheet to permit
advanced report generation
4
WISP tools
Software features: billing reporting
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• Billing reports are essential for the WISPs business to
provide input for book keeping and accounting software
– Examine data for individual devices, or for groups of
devices
– Download access code billing data for any device or
group in the network
– Access credit card billing data for any device or group
in the network
– Download credit card billing reports for verification
against credit card processors statements
– Download comprehensive billing reports in a format that
can be used as input into book keeping software, such
as Quickbooks
4
WISP tools
Software features: access code reporting
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• Each access code initiates a billing process when entered
by a customer so it is essential that the use of each
access code can be verified
– Access code usage report with date(s), time(s), location
of usage, device that validated the access code and
current status of the access code
– Generate report for customer who questions usage of
access code or claims that access code was not used
– Verification of suspected billing fraud at any site
– Access code usage provides additional input for
network planning process – for example, identify codes
that were purchased at one site but used at another site
36
4
WISP tools
WISP management tools summary
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• Avansu: WISP network billing, monitoring and management
– Software as a service (SaaS), $9.95/active node /month
– Details at www.avansu.com
• Alepo: OSS/BSS solutions for Public Wireless LAN providers
– quote for purchase price + maintenance contract
– Details at http://www.alepo.com/
• IntraISP: Billing, CRM, and OSS for Broadband Service Providers
– Details at https://www.intraisp.com/
• Capterra: Web-based OSS system for pre and post pay includes
37
provisioning, workflow and customer care for WISPs
– Details at http://www.capterra.com
Part 5
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WISP network
building blocks
38
5
Building
blocks
WISP Network building blocks
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39
• WISPs use several different components to build out
networks: all devices should have the characteristics
described in the previous section
– Wireless access points: short/long range,
indoor/outdoor (2.4GHz operation)
– Multi-port routers for wired applications (e.g. hotel
rooms)
– Wireless repeaters with multipoint local access (2.4GHz)
and backhaul (5GHz) to central antenna
– Point to point wireless links (900MHz and 5GHz bands)
• The WISP may also require equipment for additional
services
– Server for customer email service, etc.
5
Building
blocks
The ISM unlicensed frequency bands
•
– Customer facing access points are always 2.4GHz for laptop
access: access points are point to multipoint configuration
– Point to point wireless links use the 5GHz frequency bands,
with up to 54Mb/s bandwidth, however for line of sight ONLY
– Point to point wireless links can use the 900MHz frequency
bands, with 2-11Mb/s bandwidth, NEAR line of sight
– Wireless repeaters use 2.4GHz for local access and 5GHz for
backhaul to central transmitter
– Note that 2.5GHz is not used for point to point communications
due to the high attenuation by water vapor at this frequency
(same frequency as microwave oven, H2O absorbs energy)
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40
WISP wireless equipment uses the unlicensed ISM bands,
frequencies are: 900MHz, 2.4GHz, and 5.8GHz
•
WIMAX may also be used for licensed or unlicensed point to
multipoint distribution
5
Building
blocks
Range vs. speed performance at 2.4GHz
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41
802.11/g transmission @ 54MB/s can only be achieved over short
distances
Over long distances the speed for Internet access falls as shown
Data speed
54Mb/s
11Mb/s
Data transmission speed falls
off quickly with distance
2Mb/s
Distance
100
200
300
feet
400
500
5
Building
blocks
Functionality of WISP equipment
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• WISP equipment is generally very expensive due to the
complex functionality and small volume market
– Suppliers: Cisco, Colubris, Tropos, Proxim, etc
– Carrier grade equipment in the price range $1000 to
$5000 depending on functionality and redundancy
• Low cost equipment can be used with 3rd party software
by the WISP with a tight budget
– Suppliers: Linksys, Dlink, Engenius
– Equipment price range $50 to $200
• 3rd party firmware can be downloaded onto budget
hardware to add WISP functionality
42
– OpenWRT, Avansu
• Redundancy can be built by duplicating budget hardware
5
Building
blocks
Equipment hardware configurations
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43
• Select the correct equipment configurations for each
application
–
–
–
–
–
Multi-port router configuration
Point to point wireless with high gain antenna
Long range point to multipoint (hot spot) configuration
High bandwidth point to multi-point configuration
Full duplex wireless repeater configuration
• Point to point issues
– High antenna gain transmits further, however very high
gain antennas are difficult to align
• Point to multipoint issues
– Radio technology is limited to 20 to 40 concurrent
users: for more users multiple radios are required
5
Building
blocks
Multi-port network router
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• This configuration
is used typically
as an
authentication
gateway for wired
hotel rooms
Router
Power
Err or
Ne twork
authentication
Logs
Configuration
screens
WEB
server
DHCP
service
DNS
resolution
Firewall
process
External
storage
Data Routing Engine
Configure
DB
Ethernet Ethernet Ethernet Ethernet Ethernet Ethernet Ethernet Ethernet
Port #0
Port #1
Port #2
Port #3
Port #4
Port #5
Port #6
Port #7
Eth0
Eth1
Eth2
ADSL/ Cable
modem /T1
Eth3
Eth4
Eth5
Eth6
Eth7
Credit card
clearing bank
Multi Function Router
Unlicensed Spe ctrum 2.4GHz and 5.8GHz IEEE 802.11/a/b/g Standar ds
Kiosk
computers
Router
T1
Internet
DSL
Switch
Radius Server plus
the WISP/manage
software
WISP workstation:
Billing and network
management
Acce ss point
44
5
Building
blocks
Point to point wireless link
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• 5.8GHz used with
line of sight only
– 54MB/s data
• Use 900MHz for
near line of sight
Point to
point link
– 2-11MB/s data
5.8GHz
Configuration
screens
authentication
Logs
Wireless
Bridge
AP radio
External
server
storage
Data Routing Engine
Ethernet
Port #0
45
WEB
server
DHCP
service
DNS
resolution
Firewall
process
Configure
DB
Eth0
5
Building
blocks
Single radio access point
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Point to multipoint
wireless access node
operating at 2.4GHz for
customer access at a
hot spot site.
• Outdoor equipment can
have up to 1 Watt power
Configuration
screens
authentication
Logs
Wireless
Bridge
External
server
storage
Ethernet
Port #0
WEB
server
DHCP
service
DNS
resolution
Firewall
process
Sector
antenna
90deg or
120deg
LMR-400
antenna
cable (<5ft)
Cat-5 cable
(< 300ft)
Power over
Ethernet
(PoE) 48v
supply
AP radio
Data Routing Engine
Outdoor Access
Point Equipment
Configuration
DSL modem,
cable modem
or T1
Configure
DB
Eth0
46
5
Building
blocks
Full duplex dual radio repeater
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• On large sites it is
necessary to extend the
range of the wireless
coverage by using a dual
radio full duplex repeater:
the backhaul can be
5.8GHz
#1
AP radio
#2
backhaul
Wireless
Bridge
External
server
storage
Data Routing Engine
Ethernet
Port #0
WEB
server
DHCP
service
Firewall
process
Eth0
Configuration
screens
47
DNS
resolution
authentication
Logs
REPEATER
HOT-SPOT
ANTENNA
Cat-5 cable
(< 300ft)
Wireless
Bridge
Configure
DB
Parabolic
antenna
BACKHAUL
ANTENNA
The repeater
provides local
wireless access
and connects to
the WISP
wireless
backbone
5:
5
Building
blocks
Triple radio outdoor access point
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• A high throughput central
site can be built with a 3radio configuration feeding
three 120 degree sector
antennas for 360 degree
coverage
#1
AP radio
#2
AP radio
For 3 x 120 deg sector
antennas
Triple radio
Outdoor high
power access
point
Sector
antenna
120deg
Wireless
Bridge
Ethernet
Port #0
WEB
server
DHCP
service
DNS
resolution
Firewall
process
Eth0
48
Triple Radio
Outdoor Access
Point Equipment
Configuration
#3
AP radio
External
server
storage
Data Routing Engine
Photograph
copyright
Hyperlink
Technologies
Configuration
screens
authentication
Logs
Configure
DB
LMR-400
antenna
cable (<5ft)
Cat-5 cable
(< 300ft)
Power over
Ethernet
(PoE) 48v
supply
DSL modem,
cable modem
or T1
5
Building
blocks
Wireless antenna issues
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• The antenna is the critical component of a wireless
installation
– Select the radiation pattern, gain and polarization that
is suitable for the application
– Follow the FCC guidelines: select an antenna type that
radiates energy only in the area required to reduce
interference to others
• Point to point communications
– High gain (15db to 25dB) patch or parabolic antenna
• Point to multipoint communications
49
– Sector antenna: choose arc (degrees) and gain
– Construct down-tilt omni-directional pattern with two
180deg sector antennas back to back
5
Building
blocks
Omni-directional antennas are rarely used
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
antenna
Omni-directional limitations
antenna
At ground height obstacles attenuate
the signal
Down-tilt Omni-directional
Down-tilt omni-direct ional antenna
(Dual sector configuration)
On a mast signal strength is weak at
ground level
•
Sector antenna efficiency
Sector antenna
WASTED ENER GY
Signal is strong for customer
50
Signal is strong for customer
5
Building
blocks
Selection of antenna type
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
•
Point to point
•
Parabolic
Sector
PARABOLIC
antenna
Angle of coverage
at the –3dB points
(1/2 power)
SECTOR antenna
Angle of coverage
at the –3dB points
(1/2 power)
x
horizontal
Point to multi-point
y
x
y
horizontal
antenna
vertical
antenna
vertical
Typical gain = 25dBi
Horizontal = 5 de g
Vertical = 5 deg
51
Typical gain = 14dBi
Horizontal = 120 deg
Vertical = 10 deg
Part 6
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
Building out the ‘last mile’
business
52
6
Last mile
business
Last mile business opportunity
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
53
• Last mile business is mainly in rural areas
– In many rural areas the Telcos can’t /won’t provide
service from exchange to home due to their high costs
• Requires wireless point to point links to be set up and
maintained between a central site (hub) and remote
customer homesteads/businesses
–
–
–
–
5GHz band links must be line of sight: bandwidth high
900MHz band links are near line of sight: bandwidth low
2.4GHz band links don’t work when it rains: do not use
Link wireless devices must have automatic failure
detection: integrated SNMP
– Each link must have access authentication for customer
billing: radius server
6
Last mile
business
Wireless data circuits for businesses
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
54
• Businesses that operate at multiple sites in close proximity
(in line of sight) can contract a wireless link as a lower
cost alternative to a dedicated data circuit
– Opportunity to set up and maintain a dedicated wireless
data link
– Customer will want QoS contract (quality of service –
guarantee of uptime)
– 5.8GHz if direct line of sight, high data rates
– 900MHz for near line of sight, low data rates
– 24x7 link monitoring with alarm is important so that the
link is repaired quickly if it fails
– Redundant link may be required if client needs high
reliability
6
Last mile
business
Subscriber management
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
55
• Subscriber management: up front issues
– Contract for a fixed or open period: find an attorney
who can draft a standard contract
– Quality of service: determine the service you will
provide and include in contract: max downtime, etc
• Subscriber management: day to day issues
–
–
–
–
–
–
–
Authenticate customer onto network
Monitor circuit usage: verify Ts&Cs met
Alarm when outage is detected
Trouble ticket generation, field tech work order
Inventory management for new/repair items
Remote test/verification/configuration
Invoice customer monthly/quarterly
6
Last mile
business
Last mile business economics
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• The last mile data service is a steady money earner with
modest margins: economics are;
– Link equipment cost: $500 to $1000 (customer should
pay upfront as ‘installation cost’)
– Installation work: your time or will you pay an
employee?
– Possibly pay rent for central antenna site
– Monthly revenue/customer: $50 to $100
– Operating cost: $10 to $20 /customer/month
– Income (net profit): $40 to $80 /customer/month
– 100 customers generate: $4000 to $8000/month profit
56
6
Last mile
business
Last mile model economic viability
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
57
• If customers pay the initial equipment cost then the cost
does not have to amortized in the monthly fee
– However if initial equipment cost is an investment then
the payback period (ROI) can be 9 to 12 months
/customer: difficult economics if margins are low
• It is possible for a 1-person business to make a living
with a small number of customers (100)
– Income will pay an average salary
• Staff will be required to grow the business; however the
economics will improve
– Three staff can maintain a 1000 customer base and
handle 10 to 20 new customers /month
• The last mile model has to grow to be viable
Part 7
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
Building a hot
spot network
58
7
Hot spot
network
Hot spots have specific applications
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
59
• Hot spots are for travelers, vacationers, and visitors
– Resort: wireless, kiosks, wired rooms
– Hotel: wired rooms, wireless for conference areas,
business center with computers/printers
– Trade show: wireless for exhibitors and visitors, wired
booths, kiosks
– Marina: wireless internet
– Internet cafe: wired kiosks, wireless for laptops
– RV park: wireless Internet
– Airport: wireless for laptops, kiosks
• Some locations make less money in sales but may
benefit from providing free access with advertising
– Bookstore, restaurant, coffee bar, golf club
7
Hot spot
network
Potential hot spot cash flow
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
60
• The amount of money that can be made depends on
several factors
–
–
–
–
Technology awareness of potential users
Users urgency to access information
Users willingness to spend money + economic level
Volume of potential customers + seasonality
• Locations that generate good cash flow (estimates)
–
–
–
–
–
Airport: $100,000/month
Trade show with 250 booths: $25,000/show
Resort: $20,000/month
Internet café: $5,000/month
Marina: $5,000/month
7
Hot spot
network
Coffee bar hot spot: requirements
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• A small hot spot deployment example
– Coffee bar, customer area is 1500 ft sq.
• One medium range access point with a built in 8dBi
patch antenna is required with billing software installed
– Equipment cost: $200
– The access point is powered via the Ethernet cable
(PoE): makes wiring easy
• The access point is connected to the ADSL router
– Monthly cost for business DSL: $75/month
• Sell pre-pay 6-hour open scratch cards to customers
– Cost: 75c each, retail for $7.50 each (example)
61
7
Hot spot
network
Coffee bar hot spot: ROI
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Investment and operating costs
–
–
–
–
–
Equipment: $200
Billing system: Avansu free account
Resell 6h scratch cards: cost 75c, retail $7.50
Internet DSL: $75/month (share with other equipment)
Maintenance $0, customer support: $0
• For 20 customers/month, income
– Net; $60/month, payback on investment < 3.5 months
– Net; $600/month, payback on investment < 2 weeks
62
– Net; $3300/month, payback on investment < 2 days
7
Hot spot
network
Resort hot spot: requirements
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Full service resort with 20 acre campus
– Provide wireless Internet access for: 4 miles of
beaches, 2 pools, 3 restaurants, 4 bars, 1 theater,
business center, indoor public games area, outdoor
public games area, reception area, guest apartments
(wired), staff apartments (wired)
• Important requirement
– The network manager must be informed immediately if
any equipment fails
– Network manager needs remote configuration
accessed from any location with Internet
– Customization of login pages and scratch cards
63
7
Hot spot
network
Resort hot spot: equipment
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
64
• Equipment
– 3 routers for wired staff and guest apartments and
business center computers
– 3 high power long range access points with sector
antennas, mounted on a tower for beach and outdoor
public area
– 12 medium range indoor/outdoor access points with
integral patch antennas for other areas
• WISP management software
– Billing via access codes, scratch cards and credit
cards
– Alarm monitoring of all equipment + repair dispatch
– Remote management from head office and offsite
7
Hot spot
network
Resort hot spot ROI
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Total investment: equipment, installation and training
– $38,500
• Monthly operating costs: support, maintenance
– $4,000
• Customer charge
– Optional $50/week extra: 15% of customers purchase
• Monthly gross sales
– $20,000 : 400 customers/month
• Monthly net income
– $16,000
65
• Time for payback on investment
– 2.5 months
7
Hot spot
network
Managing hot spots across multiple sites
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
66
• A business that has multiple sites can operate a hot spot
at each site but manage the system as one large multisite hot spot
– See Avansu specifications
• Use hot spot management software that permits network
equipment to be managed individually or in groups
– Track performance of devices
– Track performance of device groups
• Overall operating costs can be reduced for multiple sites
– One customer support line for all sites
– Central maintenance coordination
– Central updating of devices at remote sites
simultaneously
7
Hot spot
network
Hot spot accounting and reports
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
67
• Hot spot management software packages such as
Avansu include reporting, reports include
–
–
–
–
–
–
–
Node (device) traffic stats
Node (device) billing record
Node (device) credit card processing record
Device group traffic stats
Device group billing record
Device group credit card processing record
Download billing/CC reports as CSV files, import into
applications like Excel and Quickbooks
– Access code verification report
– Network inventory (graphical)
– Node configuration report
7
Hot spot
network
Hot spot installation schedule
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• A small installation like a coffee bar will take 1 hour
– Time will be saved by using equipment that is powered
over the Ethernet cable (PoE): avoids having to run
power to the location of the access point: access point
is placed in a good location for the antenna
• A large installation like the resort example might take 1
month to install: there are many tasks
– Install long range wireless equipment on a mast and
medium range equipment at each location
– Run cat-5 cable from the server room to all equipment
– Staff training to sell Internet, and answer questions
– Train customer technical support staff
68
7
Hot spot
network
Deploying and evaluating the hot spot
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Start small with the minimum investment
–
–
–
–
–
–
–
–
Learn how the technology works
Learn how to support customers
Test different Internet selling strategies
Talk to customers and get feedback of the service
How many customers will use the Internet/month?
Analyze the financial results, cost, sales, profit
Is the hot spot system reliable?
Is system performance adequate (any complaints)?
• Verify the results against initial expectations
• Expand carefully, test and verify at every step
69
7
Hot spot
network
Growing hot spot sales
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Hot spot income is limited by the number of customers
who want Internet access
– What % of total customers use the Internet?
– Offer a free trial to increase this %
• Will local companies want to advertise to your customers
– Sell hot-spot banner advertising
• Sell computer accessories to hot spot users
– Laptop wireless USB device: wholesale $10, retail $25
– USB storage device: wholesale $5, retail $15
• Sell additional services to hot spot users
70
– Access to a printer; charge per page printed
– Offer a photo printing service
Part 8
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
Finding the ‘goldmine’
niches
71
8
Goldmine
niches
Finding the ‘goldmine’ niches
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
72
• There are a few opportunities where WISPs have made a
great deal of money: characteristics of the goldmine
opportunity are …
– Locations with high numbers of people in constant
turnover: e.g. airport
– Locations where Internet access is extremely important
for customers: travelers checking itineraries: business
people planning meetings
– ‘Monopoly status’ is required: hold an exclusive
concession to provide Internet service
– Locations where additional income can be derived from
login page advertising of local businesses
– Locations where customers understand computer
technology to minimize support costs
8
Goldmine
niches
Strategies to acquire a ‘goldmine’
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
73
• The best locations are owned by big businesses/govt.
– Big businesses are slow to launch new technologies so
welcome a WISP providing the service for clients
• The best locations are:
– #1: airport: $100K to $250K /month
– #2: busy trade show venue: $20K to $100K /month
– #3: all inclusive resort: $10K to $50K /month
• The opportunity is obtained by negotiating with the
business owner to provide the exclusive hot spot service
– The WISP covers all costs of the installation and all
operating costs: business owner has no cost
– The WISP gives a percentage of sales to the business
owner – after recovering the initial investment
8
Goldmine
niches
‘Goldmines’ are risky: homework required
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
74
• Spend a lot of time at the chosen site gathering data
before speaking with the business owner
– Acquire as much data as possible about customer
volumes, customer types, demand for the service,
advertising opportunities, etc.
• Calculate very carefully what the installation and operating
costs will be
– A big part of the install cost is the WISPs labor,
remember that permits must be pulled (additional
cost/time) and union rules obeyed (higher wages)
• With a good plan WISPs can get payback on the entire
installation investment cost very quickly
– Fastest we have seen was 2 weeks
Part 9
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
Customer support: key to
survival and success
75
9
Customer
support
Customer support requirements
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Customer support is essential for all WISPs
– If the customer can’t connect his computer to the
Internet then it is the WISPs problem
• Must have telephone support
– 1-800 number with trained support technician
– Depending on quality of service agreement with
customer, WISP may have to provide support 24/7
– Support can be outsourced to specialist company
• Must make repairs quickly
– Have fault detection plus automated trouble ticket
76
• Build redundant links
– Have hot standby equipment that can be activated on
failure of production equipment
9
Customer
support
Good customer support generates sales
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• All subscriber agreements have some quality of service
component
– If QoS is not met then customer can cancel contract
• If hot spot customer can’t connect the laptop then the
customer will not purchase airtime
– Biggest hot spot support issue currently is Windows
Vista: the hot spot WISP must have a Vista specialist to
explain Vista wireless network security configuration
• Mediocre support will drive customers to competitors
– Customers inability to use the service quickly is a deal
breaker
• Good customer support generates referrals
77
9
Customer
support
Good customer support is a selling point
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
78
• All WISPs can capture customers from competitors by
offering better support
– Sales support
– After sales service support
• A happy customer will buy more services and give more
referrals
– Your customer is your best sales person
• Give special deals to long term customer to avoid ‘churn’
(customers defection to competitors)
– Have the support person do more then just answer
questions
– Proactive support means calling on your best
customers to offer sweet deals, discounts, etc.
Part 10
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
Strategies for business
growth
79
10
Business
growth
Strategies for business growth
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
80
• A successful business will grow until your exit strategy is
reached
– Don’t just create a job: create an investment
• Business growth will only happen when certain conditions
are met
– Customers are happy because tech support solves all
their problems and the network never breaks
– The business is generating sufficient profits to pay the
costs of growth
– Employees are happy with their working environment
and stay for the long term to grow with the company
– The WISP hires bright people to implement the growth
plans
10
Business
growth
Business growth through acquisition
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• A startup WISP will develop sales in a limited geographic
region for a number of reasons
– The WISP owner knows potential customer personally
and understands the needs of potential customers
– The WISP owner knows the topography and can quickly
plan wireless links
• Eventually the WISP will grow to the point where the
chosen region is saturated: the only way forward is to
grow geographically
– The WISP is immediately at a disadvantage: geographic
growth will be much more expensive
81
• The first step to geographic growth should be to look for
competitors that could be acquired: cheaper long-term
Part 11
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
Sales and
Marketing
82
11
Sales and
marketing
Sales and marketing strategies
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Minimize marketing and selling costs with creativity
– Carefully monitor the cost to acquire customers as this
is an investment that must be amortized during the
contract period
• Potential subscribers can be easily identified
– Homesteads outside the range of DSL
– Businesses that have multiple sites, etc.
• Personal contact is your most valuable sales tool
– Make an appointment to visit potential customers to
present the advantages of your service
• 100 subscribers will be the start of a successful business
83
– 3 to 6 months of visiting potential customers
11
Sales and
marketing
Sales and marketing materials
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
• Communicate clearly and simply with potential customers
–
–
–
–
Describe the benefits
Describe the costs
How is your offer better then the competition
Describe special time limited deals
• Put your message into print (flyer, brochure) for mailing
and leave a copy with the customer after a visit
– Use the skills of a graphic designer to make your
material look professional
– The image you project is very important to win
customers
• Ensure that all sales materials are always available
– Sales contracts, support forms, referral forms, etc.
84
11
Sales and
marketing
Sales and marketing via the Internet
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
85
• Your Web site will project your image
– Your potential customers already surf the Web and have
seen many professionally produced web sites
– Spend the time to build a functional web site, pay a
design professional to make it look good
– When money is tight buy a good template ($150)
• Your Web site is an important sales and marketing tool:
can customers……
–
–
–
–
–
Purchase services on line?
Get support on line?
Seek referral commissions on line?
See new products and services on line?
Upgrade/downgrade services on line?
Part 12
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
Exit strategies
86
12
Exit
strategies
Exit strategies
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
87
• It might seem strange that a presentation on starting a
business should include the exit strategy (selling the
business)
• This presentation has described planning and delivering
the products and services that will help you grow your
business
• The eventual results you get from your business are also
very important, there are several options
– Create a family heirloom: father/mother to son/daughter
– Sell out to a competitor
– Take the company public: IPO
• It is important to decide now because your decision will
influence what you do
12
Exit
strategies
Exit strategy: business sale examples
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
88
• Create a business that is attractive to a target buyer
• Frequently incumbent Telcos buy WISP businesses to
acquire the subscribers
– The WISP owner has built economies of scale through
hard work: now a fit for the Telco economic model
• Competitors often buy WISP businesses to expand
– Competitors look for profitable businesses with high
growth that will add value to their bottom line
• Service businesses that seek to expand into high tech
areas will buy WISPS
– A farm supply company might buy a rural WISP to
access Internet know how and also expand the WISPs
network to their client base to increase revenue
Hot spot packages
Cables, pigtails
Outdoor enclosures
CPUs with software
RF Amplifiers
RF Connectors
PoE supplies
Billing supplies
We hope you found this
presentation helpful
If you have questions that were not
answered here then please send an
email to:
Info @ wispzone . com
89

Starting a WISP business on a tight

Transcription

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