Wi-Fi for the Asphalt Nomads
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It started out as a portal for people who live in their mobile homes. But now the business Jonathan Miller cofounded, Connectifi of Scottsdale, Ariz., is branching out, building a Wi-Fi and dialup ISP service for mobile retirees stretching from Texas to California. Miller's partner is Jeffrey Black, with whom he also built InDigiNet.
Miller was introduced to the RV business when his parents retired. They had founded, built, and sold a CLEC called Touch Tone America (of Scottsdale, Ariz.) that was once listed on NASDAQ under the symbol TONE (then on the OTCBB as TTAM).
His parents retired in 1996 after the IPO. They introduced Miller to a wealthy nomadic technophile community. Those who live in Recreational Vehicles (RVs) for more than three or four weeks per year are mostly retired. Miller says the average age of an RVer is 55.
Miller built a portal for the RV community in 1999 on the iVillage model, but the portal was not successful. The ISP idea is a reinvention of that community business model. Miller sees a niche he understands and feels he can be successful marketing to, but he is still at the startup stage of the new venture.
Miller has been hooking up RV resorts, campsites, way stations, and gas stations to provide frequent (though not ubiquitous) wireless broadband coverage for his customers. Early last week, he signed an agreement with hotspot provider Airpath Wireless that will give Miller's customers access to Airpath's 400 hotspots and 3,000 dialup numbers in the U.S.
He offers the service for $34.95 per month without dialup backup or $24.95 per month if prepaid annually, which includes dialup access. RVers often go home in the summer to colder climates; in Scottsdale, Ariz., temperatures in July average over 100 degrees. "I thought people would have cable or DSL when not RVing, for the summer, when they go back to where their kids are. But it costs money to turn it on and off every year, so they have dialup instead," Miller notes.
He wants to offer roaming Wi-Fi access combined with dialup that his customers can use throughout the year, enabling them to get rid of their AOL or EarthLink accounts. "We also see some AT&T, but really nobody else." The $24.95 price is aimed directly at AOL.
"Nobody else offers this service. There are companies that approach resort owners and offer to build a network for $40,000. We work closely with resort owners. We offer 24/7 service. We install antennas in the RVs. We charge for the antenna but not for the install. The external antenna usually costs $199."
He says installation is not complex. "Most RVs have a ladder on the back, and we attach to that. All our installs now are PoE (Power over Ethernet). We stopped using RF cabling. We use equipment from EnGenius Technologies of Costa Mesa, Calif., and our distributor is EDigitalWireless.com of Hoboken, N.J. The external antennas are waterproof and weatherproof and so is the cable."
For larger RV resorts, Miller says, his setup is like a WISP's. "We work with Vivato. In Arizona, we can put a single omni antenna 60 feet up and have clear LOS for a long way. The range is about a mile. We're able to serve people using SmartBridges' indoor antennas at 700 yards (we recommend top of the line stuff), and after that, they need external antennas."
Many customers also request wireless LANs for inside their RVs. Miller says, "in many of our installs, the RV owners requested internal routers. Our antenna plugs into Linksys routers with MAC address filtering."
The need for the service is clear. At one campground, Miller says his Wi-Fi service is replacing 4 modem jacks for nearly 1,500 sites. The question remains, however, whether the service can be profitable. The backhaul for his Wi-Fi service consists of T-1 lines or their equivalents, whether through coax, copper, or wireless. Generally, the price is $650 per month to $900 per month per T-1 equivalent.
Miller needs to avoid the problems of his parents' company. In June of 1998, Paul Stapleton, in his I$P Report, wrote, "when a reseller buys long distance minutes from AT&T, the contract often says you pay no matter what you sell. That is essentially how Touch Tone America (OTC BB:TONE) got into financial difficulties." Wherever he uses copper or coax for backhaul, Miller will be paying for bandwidth whether or not he can sell it.
Be he can avoid the problem with innovative deals like the one he's working on with Clear Sky Broadband of Scottsdale, Ariz. At a local RV park, he hopes to allow the WISP to build a tower and, in exchange, provide the backhaul and allow him to put some antennas on it. No cash will change hands.
Miller is looking at other innovative business deals. He collaborated in marketing with one large resort, Voyager Resort. Each year, it sends out mail to anyone who has stayed there in the past three years. Miller put an insert in the mailing, which went to 11,500 RV owners, and he claims he's doing about 5 installs per day from it.
He adds that a lot of business comes from referrals and from enthusiastic customers (including his parents) who demonstrate their system in RV parks. "They put on a coffee and donut show and talk about the service," he says.
Miller is working with La Mesa RV, which claims to be the "world's largest Winnebago industries dealer," to develop RV models with Wi-Fi pre-installed.
He is also working the RV trade show circuit. A database of trade shows is maintained by the RV Industry Association. RVs are very expensive (they start at around $50,000), and, since they are homes, it seems that many RVs are sold at massive RV shows where potential customers can walk into many before buying one. The industry claims that attendance at major RV shows regularly reaches 150,000 people.
All of this adds up to a promising niche business for a full service WISP and WLAN consulting business. Miller is only afraid that the cell phone companies will enter the market. He says, "about 80 percent of RVers have a cell phone. Cellular carriers could hook up a couple of thousand sites. When they do, I want the carrier to partner with us, not try to put us out of business."
To that end, he is trying to build an association of the "little guys" in the RV niche. The association, launched on August 1, 2003, is called RV Wi-Fi. To partners, he promises no equity but a simple agreement. "If it was acquired, they would receive a portion of the acquisition based on the proportion of the subscribers delivered."
Serving the RV niche requires the knowledge that only an RV hobbyist could have. It's a nomadic population with its own rules and travel patterns. Miller is restricting his business to areas from California to Texas, but that's still a big area, and he's on the road a lot. "We've turned away parks on the East Coast," he says. "It's too far for us to travel, and you really want to stay there for the first few weeks of service."
Reprinted from ISP Planet.