Turnkey Hotspot for Entrepreneurs

By Naomi Graychase

June 06, 2005

Via its growing customer base and partnerships, Whotspot's plan is to make pay-as-you-go Wi-Fi as ubiquitous and necessary as napkins.

For businesses looking for a simple, affordable way to add pay-per-use Wi-Fi to their menu of offerings, Whotspot (pronounced "wot-spot") provides secure wireless Internet access along with a prepaid card system designed to make selling online minutes a cinch.

Billed as "Whotspot in a Box," the "Instant WiFi Hotspot Solution" costs $500. Clients include cafés, restaurants, hotels, sports bars, service stations, and one Canadian food court.

Terry Fagen, President of Whotspot, foresees a future when Wi-Fi is ubiquitous.

"Wi-Fi is like napkins—something expected wherever you go," he says. "If The Gap didn't have Wi-Fi, I do not think it would affect their business. However, if I had to choose between a hotel with Wi-Fi and a hotel without Wi-Fi, I would choose Wi-Fi."

The company, which has offices in Quebec and California, began as a division of 247Consult.com, a broad-based consulting group made up of engineers, programmers, designers and other technology professionals. In the course of their travels, they developed a desire for better, cheaper, easier access to high-speed Internet. Now, Whotspot employs six full-time staff and several contractors, and has a growing business of its own.

The "Whotspots" are not customized for each venue, but they are designed with ease of use in mind. An owner of a low-tech business—a laundromat, for instance—should be able to get her hotspot up and running right out of the box.

"Our mission is to simplify otherwise complex technology to a point where non-technical businesspeople can easily and affordably adopt the technology," says Fagen. "We provide managed services—no experience or knowledge needed. We pre-program our devices so they are plug-and-play."

For Whotspot's clients, the proof is in the pudding. Results—as in traffic—are what count, so Whotspot has designed a business model intended to help the average Internet café receive a return on its investment in roughly six months. With no flat fees and no contracts, those who choose to deploy a Whotspot hotspot set their own rates and deliver a portion of those sales back to Whotspot, so profitability isn't inconceivable.

"Our business model is based on successful deployments," says Fagen. "If a location is busy, everyone makes money. If a location is slow, the costs to the venue are minimized so it doesn't hurt. We also help our customers succeed by providing tech support and consulting for free to help them solve deployment problems."

Whotspot's customers are not limited to North American businesses. This year, new customers have come online in Trinidad, St. Maarten, St. Thomas and Africa. "We have partners who have deployed into apartment complexes, hotels, marinas, and campgrounds—amazingly enough, campgrounds and marinas have been the most lucrative," says Fagen. "We also have end customers in the traditional mom and pop coffee shops. These locations do not make a lot of money, but enough to cover their costs and attract new customers to their regular business."

Fagen believes paying for Wi-Fi is the way to go, both as a provider and as a consumer. "When I go to a Wi-Fi Hotspot, I am happy to connect, regardless of the cost," he says. "I perceive paid access locations as more secure than free locations. I would not use Wi-Fi in a free location."

A large part of the Whotspot business plan involves forming partnerships with resellers and other providers. Recently, Fagen says, Whotspot's significant relationship with Airpath Wireless, which calls itself "the leader in enabling management and roaming for wireless broadband networks," has become fragile. He plans instead to partner more in the future with Sputnik, whose methods he calls more in line with his vision for Whotspot and its customers.

In addition to the "Whotspot in a Box" product, Whotspot also offers outdoor solutions and standing kiosks which are intended for use by marketing teams at conferences, trade shows, or promotional events in malls or other venues.

With more than 450 million people worldwide currently using the Internet at home, Whotspot hopes to fill what it sees as the void those people enter when they leave their homes (or schools or offices)—one Internet café at a time.



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