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.