By Gerry Blackwell
Finding new markets for Wi-Fi access service has become a challenge. Most residences and businesses in lucrative built-up areas already have wireline services that are as cheap as wireless, as fast or faster, and arguably more reliable. Why would anyone want to switch?
It was with exactly this in mind that Los Angeles-based Planet Halo, a subsidiary of Concierge Technologies, developed its business plan. The company aims to bring Wi-Fi access and related services to boat owners – both live-aboards and weekend sailors – in major marinas and harbors along the U.S. West Coast. It’s using mesh technology from Tropos to build the networks.
The first market, Marina del Rey in Los Angeles, is already up and running with a handful of customers and a free-to-members hotspot at the California Yacht Club facility. The company hopes to have three or four more networks in place at other harbors before the end of the year.
Planet Halo plans to be more than just a WISP, though. It will also offer boat monitoring services, which company president Marc Angell says are much in demand. It will install sensors on board, along with Web cams, to keep an eye on boats for absent owners. It will charge a modest monthly fee ($9.95 for subscribers to the access service) to feed them alerts when unauthorized people board the boat, or if it catches fire or the bilge pumps fail.
The company will also offer VoIP services, though whether it partners with an existing provider such as Vonage – with which it has already had exploratory discussions – or provides the service itself is yet to be decided.
The fourth leg of the stool is opt-in advertising from local businesses that will offer special deals and electronic coupons to subscribers at community portals the company is establishing for each market. The Marina del Rey portal will be up by the end of July.
It’s very much a niche market strategy, but the company believes it can be profitable quickly. “We’ll be turning a profit by the end of this year – that’s six months from launch,” Angell says, then backpedals a little. “If we keep bringing on new networks [in new markets], that pushes it [profitability] out. But if you take one harbor on its own, it will be cash-flow positive within six months.”
Concierge, a holding company, is betting the business on this strategy. It will fold itself into Planet Halo and rename itself either Planet Halo or Wireless Village, the name of the network integration company it’s in the process of acquiring. Wireless Village is currently a Planet Halo partner tasked with building the marina networks and other business infrastructure.
The first market, Marina del Rey, is the largest man-made small boat harbor in the world, with a population of some 8,000 boats and about the same number of people in residences clustered around the harbor.
“We’re not focusing on the residences and businesses, though, because most already have access through a cable or phone company,” Angell says. “But typically, in harbors [in the boat dock areas], broadband is nonexistent, or problematic. [Phone companies] have difficulty maintaining twisted pair [connections] – there are always phone problems.”
“We took an overview of the industry and tried to figure out where there was a hole to fill,” he says. “We’ve found that most harbors are not unlike Marina del Rey and Ventura. They’re so far from the [phone company] switch that [broadband DSL service] isn’t available.”
At Marina del Rey, Planet Halo has been up and running for a few weeks. It had five of an eventual six Tropos access points in place at the time of writing, covering 75% of the boating community. The last radio was scheduled to be installed within days, giving Planet Halo 100% coverage of the community.
Access services are available now – $29.95 a month, $9.95 a week or $5.95 a day. A couple of subscribers are beta testing the boat monitoring services. VoIP service is further out – though subscribers could use softphone services such as Skype now.
The next project for Planet Halo is Ventura, just up the beach. It’s currently under development. When we reached Angell, he was in the field doing site surveys and talking to Ventura property owners about leasing sites to place the company’s radios. It’s a smaller community than Marina del Rey, with a few thousand boats, Angell estimates. But it also has a commercial fishery with potential customers working and, in some cases, living aboard year round.
The other harbors on the list for the company’s 2007 roll-out: San Diego, San Pedro, Long Beach, Santa Barbara. Seattle and other communities in the Puget Sound area are also possible.
There may also be spin-offs from the main business. Planet Halo is an authorized dealer for Tropos in North America. It is already talking to city hall in Ventura about implementing a downtown Wi-Fi hotzone, and pulling Tropos into the discussions.
Angell says the company isn’t absolutely wedded to Tropos as the infrastructure provider for the harbor networks. “If somebody came along down the road with mesh wireless equipment at half the price, we might switch,” he says. In the meantime, Tropos is a key partner. “It’s an outstanding company with a terrific product and great sales and technical support,” he says. “We looked at all the equipment out there and settled on Tropos as the best.”
The big selling point for mesh technology in general and Tropos in particular is the economics and speed to market that results from the wider coverage area that each radio provides beyond conventional Wi-Fi – and WiMax – technology. It would cost much more to implement a network like the one in Marina del Rey using WiMax, Angell says, and it would take longer to get it up and running.
Broadband services are not totally non-existent in the harbors Planet Halo is targeting. Vendors have been offering hotspot and hotzone services in West Coast marinas for a couple of years, including at Marina del Rey. But they can’t offer as good or as reliable service as Planet Halo, especially for live-aboards, Angell says, and they can’t offer the ancillary services.
“Once you leave the [marina] building and go down on the dock, you’re typically out of range,” he says. “And with the [Wi-Fi] hotspot technology, you can’t do monitoring or VoIP. This is a whole other deal. Mesh technology is like Wi-Fi on steroids.”
Maybe, but one can’t help wondering why, if this is such a hot market and workable business plan, somebody – the companies already offering Wi-Fi hotspots and hotzones in marinas, for example – haven’t hit on it before.
On the other hand, Angell is right about one thing. “I think a lot of people made the mistake of going into an area with mesh to replace wireline Internet access,” he says. “I don’t think people who have wireline service are going to switch, or at least not yet.” If mesh service providers can survive in under-served rural and suburban markets, why not in marinas? At least Planet Halo will find a density of population similar to urban markets.