Starting a WISP - Can they compete?

One of the questions I see an a recurring basis is can a WISP compete with cable and DSL? My answer is it depends. Before we go on I will define what I consider a typical WISP in regards to this article.  A typical WISP is a provider who is using off the shelf unlicensed Access points.  Whether these APs are motorola, mikrotik, or some other vendor.

Most WISPs are started out a need.  That reason for many of them is because there are no other high-speed alternatives.  A WISP is able to deploy quicker into a market than the traditional wire based carriers.  In most cases the deployment is less expensive as well.

A downside of the typical WISP setup is the amount of capacity a single AP or cluster of APs can handle.  For data and VOIP most setups can keep up with cable and DSL in terms of speed.  With the introduction of Video things change.  I have seen demonstrations and technical briefs on many types of IP video.  The average HD IP video feed is in the neighborhood of 2 Megs a second per stream.  This means each tv in the house will be pulling 2 megs of data each time it is on.  Even with a Canopy access point that does 14 megs of aggregate throughput you are only able to put on 7 TV streams and you are maxed out.  There are always advances in compression and such going on, but this is where the technology stands today.

Many WISPs compete on service and things the “Big Boys” do not do.  By providing complimentary services such as computer repair, networking support, and personal attention.  Because the WISP started out to fill a need there is normally a personal connection to the area they started in.

Price is something WISPs have a hard time competing on.  With equipment in the $100-200 range the WISP has to re-coup that money before they can begin to be profitable with that customer.  Advances, such as devices from Ubiquity, are lowering this cost but it is still a hurdle.  Unlike telephone companies WISPs are not subsidized by the government.  Add on the fact the typical deployment is an outside deployment.  The equipment is prone to weather, electrical surges, and even squirrels chewing on the line.  This increases the cost of keeping the customer should equipment fail

Is the WISP a long term business model? It can be.  As more and more telephone companies build fiber to the home, extend DSL reach, and look at WIMAX in licensed frequencies the “low hanging fruit” WISPs see will become more and more scarce.  This is where diversity, niche markets, and solid business plans will benefit.  Things such as backup service that compliment existing wire line, bandwidth in bulk, and business grade services are a good thing to have in your arsenal.