A number of my clients are now selling a managed WiFi product. But the product they are offering customers under that name varies widely, and so today I thought I’d discuss a few of the different products being sold under this name.
The simplest product is one that I would call a WiFi network. Historically, ISPs that provided WiFi placed a single WiFi router near to where the broadband connection terminated into the home. And it was typical to include the WiFi functionality directly embedded into the DSL or cable modem router. This product has been around for a while and I got my first WiFi router when Verizon supplied an all-in-one router on my FiOS connection nearly 15 years ago.
But as homes have added numerous connected WiFi devices, a single WiFi router is often inadequate. With today’s greater demand for bandwidth by devices a single WiFi router often can’t reach to all parts of the home or connect smoothly to numerous devices. Most of my clients tell me that WiFi problems are now the biggest cause of customer dissatisfaction and in in many cases have surpassed cable TV issues. Many customers supply their own WiFi routers and ISPs get frustrated when a customer’s inadequate WiFi device or poor router placement ruins a good broadband delivery to the home.
Today there are numerous brands of WiFi network devices available. These systems deploy multiple WiFi routers around the home that are connected with each other to create one ubiquitous network. The routers can be connected wirelessly in a mesh or hard-wired to a broadband connection. These devices are widely available and many customers are now installing these networks – I’ve connected an eero network in my home that has vastly improved my WiFi quality.
I have a number of clients that sell the WiFi networks. They will place the WiFi units in the home in a manner that maximizes WiFi reception. The revenue play for this product is simple equipment rental and they charge each month for the devices. ISPs generally set up the routers so that they can peer into them for troubleshooting since customers inevitably will unplug a router, move one to a less than ideal place or place some big object near one that blocks the WiFi signal. But that’s about all that comes with the product – expert placement of routers and simple troubleshooting or replacement if there are problems.
At the other end of the spectrum are a few clients who really manage the customer WiFi experience. For example, customers can call when they buy a new WiFi device and the NOC technicians will connect the device to the network and maximize the WiFi connection. They will assign devices to different frequencies and channels to maximize the WiFi experience. These ISPs have invested in software that tracks and keep records of all of the devices connected to the WiFi network, meaning they can see a history of the performance of each customer device over time.
The ISPs monitor the WiFi performance and are usually proactive when they see problems, in the same manner than many ISPs track performance of fiber ONTs. The WiFi network moves the ISP deeper into the customer home and allows the ISP to make certain that customers are getting the bandwidth they are paying for.
Nobody know what to charge for this yet and I see monthly rates for the managed WiFi that range from $10 to almost $25 per month. I don’t have enough experience with this to yet suggest the right price. Like any new product the success is going to be due mostly to the marketing effort expended. I have a few clients who have already gotten penetration rates of 25% or more with prices in the $15 – $20 range.
But this product isn’t for everybody. For example, I have clients that don’t want to take on the product due to the extra truck rolls. But almost all of my clients have worries about eventually becoming dumb pipe providers and the managed WiFi product provides a tangible way to maintain contact with a customer to demonstrate the ISPs value proposition. And like with any equipment rental play the revenue stream is good. Once the cost of the hardware and initial installation have been recovered the product is almost all margin.