Cost of Muni Wi-Fi is High
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Based on surveys and conversations with cities and vendors, JupiterResearch has come to the conclusion that "the average cost of building and maintaining a municipal wireless network is $150,000 per square mile over five years."
This number is part of a new report, entitled Municipal Wireless: Partner to Spread Risks and Costs While Maximizing Benefit Opportunities, available today.
The report goes on to say that about half of the initiatives today to create city or county-backed wireless networks will not even break even, even if they charge end users as much as $25 per month in subscription fees.
The $150,000 price tag is over five years, and includes all operational expenses, according to JupiterResearch associate Ina Sebastian. The researchers talked to 83 municipalities that have deployed or are in the process of deploying some form of wireless network.
Sebastian says they did not differentiate between the various types of wireless topologies available, which might make a difference.
"The Jupiter number strikes me as being a little high," says Bert Williams, vice president of marketing for Tropos Networks, a company that has successfully provided mesh-based Wi-Fi hardware for deployment in several locations around the world, working with private providers as well as municipalities.
"We usually talk in terms of $75,000 per square mile for our gear," says Williams, who estimates that the Tropos hardware accounts for about 60 to 70 percent of the total cost of installation. Adding the ongoing costs for backhaul and system management, he believes the number to be closer to $100,000 per square mile.
Julie Ask, research director of JupiterResearch, said in a statement that the potential market for municipal wireless networks is "made up roughly of 40,000 localities, with projects that are often very large in scope and scale."
The full report is available to JupiterResearch clients at their Web site.
Wireless Philadelphia, the program behind the city's wireless initiative that has become a touchstone for the debate over whether municipalities should even install such broadband networks, said in April that it expects the cost of covering the 135 square mile city to be $10 million to install—which is just under $75,000 per square mile—plus $5 million to run it for the first two years. However, the city hasn't announced yet who will get the contract for installation and product supply. That information should be released sometime this month.
JupiterResearch is owned by Jupitermedia, the parent company of this Web site.