Cost of Setting up a Wi-Fi Network

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Enablers:

• Unlicenced Spectrum at 2.4 Ghz and 5Ghz
• Low cost Wi-Fi access points
• Availability of laptops with built-in Wi-Fi
• Ubiquity of broadband connections to Internet

Inhibitors:

• Who pays? (Free versus pay for usage)
• Who maintains?
• High cost of backhaul (DSL, Cable, Fiber to the home, Metro Ethernet...)
• High cost of roof rights
• High cost of pole rights
• Limited electrical sources
• Roaming agreements and fees charged by different networks
• Limited range of a single access point
• Coverage across cities and different countries

Paradigms:

• Wi-Fi Cards nearly obsolete. Nearly all laptops include Wi-Fi.

• Consumer Wi-Fi Access Point under $100, Commercial grade APs under $600.

• Low cost Wi-Fi hot spot for around $200. Does not include access control.

• A city wide Wi-Fi network to cover the city of Philadelphia was to cost only $10 million
• Many Metro Ethernet projects have folded due to underestimating costs and overestimating revenues

• Monthly operating estimated profit of a cafe hot spot estimated around $116 and monthly operating profit of a hot spot at airport around $14,167.Wi-Fi Industry Basics

• T-Mobile (uses pay model) abandons Starbucks (related to above?)
• AT&T takes on Starbucks as a side-line to the POS business

Experts:

• 802.11 & Cellular: Competitor or Compliment by Bill Gurley

http://shrikant.emergic.org/archives/2003/03/

Timings:

• Cost of Radio Chipset in 2000- $16 approximately
  • Cost of Radio chipset in 2006-$2 approximately

• Cost of Wi-Fi Access Point around $1000 in 2002
  • Cost of Wi-Fi Access Point in 2005 under $100

• Cost of Wi-Fi Radio Card around $700 in 2000
  • Cost of Wi-Fi Radio Card in 2005 under $50
    • Wi-Fi radio card to be part of all Pc's and laptops from 2005 onwards making effective marginal cost to the customer zero

Web Resources:

• http://www.boingo.com/wi-fi_industry_basics3_3.html

• http://shrikant.emergic.org/archives/2003/03/

• http://www.fiercewireless.com/topics/wifi.asp

• http://www.wi-fi.org/OpenSection/articles.asp?TID=5

• http://www.bitpipe.com/rlist/term/Wi-Fi.html

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