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:


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