Setting up a Wi-Fi Hotspot: Profitable and yet Affordable

Wi-Fi Hotspots are great business... or so people thought. It sounds so attractive, you connect a wireless access point/router to your "home" DSL line and hey presto! people would come in droves to your establishment to surf, be online whatever and you made a lot of money.
Huh?

Whats the revenue model here? Do you charge for access? Do you give it away for free? If its the latter, would you be arrested if someone abused your service? Are there people/services available who would help you set up such a service?
While it is true that offering Wi-Fi by itself is not the way to making your millions, you can make a start by offering Wi-Fi in a controlled environment. This means that you control: -

Who connects to the hotspot (Authentication)

What they can access through the hotspot (Authorization)

How long they use the service (Accounting)

In addition to this, there also needs to be a mechanism to ensure that adequate bandwidth is available for all users (no mp3 and DVD downloads choking others).

All of the above is available as a managed service offered by companies like Pronto Networks, Airpath, Aptilo, Nomadix and so many others.

The advantages of going in for these services is obvious; You sign up with the company and become a "WISP" (Wireless Internet Service Provider).

They give you a nifty little device called the "Hotspot Controller". This device sits between the Internet connection (DSL, T1) and the rest of your wireless network. At times, this lil box may be the rest of the network because your hotspot might not need any more access points than the one bundled with the Hotspot Controller.

Now the Hotspot Controller will typically connect to the OSS (Operations Support System) of the provider. It can then manage, provision your network. The OSS has a web interface that the WISP (you) login to and create packages, prepaid coupons and so on.

It also lets you customize the "landing page" on your hotspot so you can use that space for advertisement revenue!

When the prospective customer (read road warrior/kid across the road with laptop) tries to get on to the Internet through your network, she is redirected to the "Landing Page" which asks her to "Pay up or else..". In other words, she needs to "sign-in" or "sign-up" for access.

There usually are cool features like letting her sign up for the account by creating an account and paying via credit card and so on.

All this is plain and simple and can be done in a jiffy. But, is this affordable?

Well not really. You (as the WISP) have to pay the managed services provider a flat upfront fee, and then a portion of the revenue per subscriber.

Now what happens when there is no customer at all? Well, you pay the provider a minimum guarantee to ensure he gets back his investment in your business.

There are services that follow the middle-path like not charging you a fee for the hotspot controller but charging a portion of the revenue etc. These include Zonerider, FON.

Now, coming back to the main issue we started out to discuss. Is there a way to get all the goodies that the OSS provider provides and also not lose money? More importantly is there a way to make money?

In part 2 of this series, we will look at how this can be done using some very cool tools available in the Open source world.

Contd....