Interesting numbers on wifi hotspot usage in Ireland..

Posted: September 9, 2009 in airappz, wifi
Tags:

free_wi_fi_spot

First off all congrats to Bitbuzz for a very succesful year. I have disagreed with them in the past on charging for wifi access and other issues (and will probably disagree with them in the future) but they are very good at what they’re doing and are a solid commercial success.

Yesterday they send out a release announcing revenue figures over last year as well as data on the size of their network. There are some interesting figures in there.:

Bitbuzz had a total of 173,747 registered users by the end of this period [first half of 2009], indicating an increase of 22% since the end of 2008.  Revenues for the six months to end June amounted to €501,350 compared with €433,950 for the corresponding period in 2008, representing an increase of 13.4% per cent. Full year revenues for 2008 amounted to €926,560.

Deals announced in the period included contracts with the Fitzwilliam Hotel Group; the Templeton Hotel; Mooney Hotel Group; Ibis Dublin West Hotel; StayGroup Apartments; BB’s Coffee and Muffins and The Streat Café Franchise — all of which have contributed significantly to growth.  The total number of Bitbuzz Wi-Fi hotspots across the country at the end of June ’09 was 194, up from 178 at the end of 2008.

Now these figures make for some interesting sums:

  • 926560 : 173474= 5,33 euro spend per registered user
  • 926560 : 178 = 5205 euro annual revenue per wifi hotspot
  • 926560 : 178 : 12 = 433 euro per wifi hotspot p/m

The last figure is especially interesting, I don’t know how much it costs Bitbuzz to run their hotspots (or how much they charge the venues) but I would be surprised if it is more than 433 euro. So one can assume that the average hotspot is making a profit. I also would very much like to know if Bitbuzz operate a profit share arrangement with their location owners and how much this is.

However seeing that the installation costs for a wifi hotspot are relatively low (we/Airappz charge 250 eur) and the monthly costs are only 10’s off euros it is still my opinion that charging is counter-productive. The increased footfall generated by offering free public wifi combined with the, quite often, higher spend of the clientele attracted make providing free wifi a winning proposition.

Advertisements
Comments
  1. I totally agree with the Free WiFi – with the costs as low as they are at this time.

    Not to mention the ‘pain’ it causes to have to charge. Offering free wifi is becoming de rigeur in many hospitality markets.

    I also like your analysis using a per user figure of only 5 euro… I’m sure most businesses spend WAY more than that in attracting and keeping new customers. (and they don’t get to keep all the revenue anyway)

    Free WiFi – installed and maintained by a professional group is one of the best ways a company can stay competitive and keep customers in today’s marketplace.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s