T-Mobile trying to make money on Hotspots

Perhaps the use of Cable or DSL would have been a better investment for connectivity…

From my experience here in NYC, the Starbucks are hopping in the am and in the afternoon. I’ve found it impossible to even find a seat and noticed that there are many laptops open – I assume connected, though of course people might just be playing solitaire.

Enck noted, however, that with 4,200 locations by year’s end, $1.6M works out to $13 per hotspot per day on average. This is slightly higher per store revenue than estimated a year ago when Starbucks slipped the news that they were averaging 25,000 sessions per week. At that time, I was estimating an average of $150 of gross revenue per Starbucks locations per month. The more current numbers are triple that.

But with roughly $400 per month per store, how does T-Mobile ever expect to even pay on a current basis for the cost of each store’s dedicated T-1 line, much less other ongoing costs, and the original capital expenditure? They would need to at least quadruple this revenue figure to pay out CapX and current operational costs.[Wi-Fi Networking News: T-Mobile Says $1.4M Per Month Revenue in 2003]

One Reply to “T-Mobile trying to make money on Hotspots”

  1. Cable or DSL: Starbucks demanded T-1 lines from MobileStar at MobileStar’s expense; T-Mobile bought MobileStar’s assets and picked up their deal. Starbucks gets nationwide T-1 for free; T-Mobile eats the cost.

    Laptops open: I’ve always been interested in this phenomenon. Plenty of people don’t have the obsession I do to always have an Internet feed. You can never really tell (without running Kismet) whether the local network is really being used.

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