Canova Wireless Surges Ahead

By Tim Sanders

September 08, 2003

The U.K. hotspot startup believes it can take on the telcos with a frugal business model that emphasizes partnerships, planning and customer support.

As major telcos and Wi-Fi equipment makers begin to collaborate on massive launches of Wi-Fi hotspots around the United States, small, independent hotspot providers can't help but wonder if they will be able to compete.

In the United Kingdom, where commercially sold Wi-Fi has only been legal for about a year, things are arguably worse. British Telecom dominates the U.K. hotspot market with plans to deploy thousands of hotspots. Other providers such as Swisscom Eurospot and UK Explorer launched test deployments before commercial access was approved.

So, can smaller firms launch and succeed where the giants already tread? Canova Wireless thinks it can.

An Upstart With a Vision

The Northampton, England-based startup believes it can survive and prosper in the hotspot market with smart planning and leveraged partnerships. A privately held firm, Canova has budgeted 1 million pounds (around $1.6 million) for its U.K., European and Asian expansion.

The company's founders began studying the industry in the spring of 2003 and started deployments less than two months ago. Since then, the company has lit 6 locations and has 30 more under contract awaiting installation.

"Our plans include inking deals with around 120 hotspots by the end of this year," said Sesh Diu, chief technology officer of Canova. "We plan to have 500 locations by September of 2004 in the UK, Europe and Asia."

Partnership Was Key

Canova made the decision early on to not reinvent the hotspot wheel. The company chose to partner with Texas-based hotspot gear maker NetNearU to leverage their billing, network management and authentication technology. Diu said partnering with NetNearU was pivotal, as it allowed Canova to center its efforts on sales and growth.

"Some of our competitors were claiming they had access to the largest network of American hotspots," said Diu. "However, we felt that NetNearU gave us the strongest U.S. connection and footprint. We quickly began to exploit that fact."

He adds that this element was key to closing deals with U.K. hoteliers and airports that see significant American travel business. Those venues told Canova that travelers were asking for broadband.

"In the U.K. having broadband in hotels is a bit of a novelty," related Diu. "In some ways, wireless is more of the future for some venues and just providing Ethernet connections was what they wanted. We sometimes only focus on wireless in common areas."

A Strong Business Model

Canova's primary strategy is to avoid the dense London city and suburbs. The company has contracted five sites in London and deployed one, but its deployments are mostly in northern England and Scotland with locations in Leeds, Manchester, Glasgow and Birmingham. Despite this strategy, most of its locations were still sold against competition.

There have been problems, of course. Finding affordable bandwidth has not been easy. Remote sites present bandwidth-sourcing problems. Also, the company made some mistakes.

"Early on, we were selling sites but there was a huge delay in signing contracts," said Diu. "We realized that customers were seeking alternatives because we had not explained our value well versus our competition."

Diu said that once Canova began explaining its value better up front, locations signed much faster. He believes that the company's focus on quality service, pricing/contract plans and co-branding that meet venue needs are key differentiators between it and its large competitors. He said the company offers flexible terms that ensure profitability and also consider each customer's unique requirements.

Canova invests more in sites than its competition, Diu said. In hotels, for example, it covers the entire ground floor and not just common spaces. The company also maintains strict cost controls, striving to avoid costs -- particularly recurring costs -- whenever possible.

For its part, NetNearU believes the numbers speak for themselves.

"Canova has already taken delivery of a good part of its first 500 units," said Cody Catalena, executive vice president of NetNearU. "Canova is really focused on providing comprehensive coverage and quality service in its locations."

Studies have indicated that hotspot growth in the U.K. and Europe in general may be much slower to take off than in the United States. However, Catalena believes Canova and others are proving that case wrong.

"Canova has opened our eyes to the potential of the European hotspot opportunity," he said. "[They are] on track to become one of our largest partners."

Planning, Planning, Planning

Because its model is very customer-centric Canova realized from the beginning that it had to plan better than its competition. Canova strives to build plans workable for each chosen spot. The firm spends significant effort researching and choosing sites that have high profit potential. Sometimes these sites are not readily apparent. Others that seem like no-brainers turn out to be, upon closer examination, unsuitable. Once it chooses a site, Canova works with the location to ensure a mutually profitable deal.

Canova chose to market to the airport and hospitality industries first. "Business travelers are our key demographic," explained Diu. Thus, the company's locations are often clustered around business corridors that the American business traveler frequents. The company has a smattering of cafes (one that seats 500 patrons) and even a dentist's office.

"Our revenues are really starting to grow," said Diu. "We are close to signing three airports in the U.K. and Scotland."

"Canova took the time to understand its market really well," said NetNearU's Catalena. "We think they also understand their competition better."

He added that Canova has greatly accelerated NetNearU's plans for expansion in the Middle East, Asia and parts of Europe.

Service Turns Heads

Of course, getting the business is one thing; keeping it is another.

Canova believes that quality service is most noticed by its venues and will pay off in the long run. The company strives hard to provide co-branding programs. It makes sure that venues have sales collateral and access to support numbers for its customers.

More importantly, Canova maintains this focus. It checks venues for signage on a regular basis. It replaces distressed signage, updates collateral and spends training time with staff. The firm believes that the sense of partnership is key to long-term success.

Canova said it has examined other niche venues such as gas stations for future expansion. However, it believes it must customize its business model on a segment-by-segment basis to be profitable. Such niche markets will come in time. For now, the company intends to execute its core strategy.

Canova plans to hit the European continent by the end of the year. However, depending on which deals sign first, it could reach Asia even sooner. Future expansion plans include Europe, Asia and the Middle East.

Outlook For Success

The business case for hotspot success is probably the most suspect area of the Wi-Fi hotspot phenomenon. Canova believes it will achieve success through frugal, well-planned business models that leverage partnerships. In Canova's view, sustaining success starts early with a service-oriented culture at the beginning. This approach bears much promise. Hopefully, the industry will take notice.

Tim Sanders is founder of The Final Mile, a broadband wireless consulting group. His experience was gained running a multi-state broadband wireless ISP. His clients include hotspot providers and WISPs. He can be reached at www.thefinalmile.net or 828-253-0702.



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