Becky Welke had a problem. As general manager of the Plaza Hotel & Suites in Eau Claire, Wis., Welke wanted to offer her guests high-speed access to the Internet, but the installation and service costs made her think twice.
However, knowing that such broadband access would become necessary for the hotel’s clientele-mostly medical professionals-Welke began installing an ISDN network, starting with hotel offices and then later planning for each of the hotel’s 200-plus rooms. It was a tough decision-the wiring costs alone were $3,000.
Then Monet Mobile Networks Inc. came along, and Welke forgot her wired problems.
Today, guests at the Plaza Hotel & Suites can access the Internet for $10 per day and can reach speeds of between 300 to 700 kilobits per second. More importantly, guests can take their laptops anywhere in Eau Claire or a handful of other Midwest cities and wirelessly access the Internet at the same speeds. And, Welke said, it’s faster than ISDN.
“I’m really glad I didn’t put it in the rooms,” she said.
With Monet’s one-year anniversary just a few weeks away, the wireless Internet carrier now counts thousands of customers like Welke. But the implications and ramifications of Monet’s business and its future could reverberate far beyond the outskirts of Eau Claire.
Monet built North America’s first operating CDMA 1x EV-DO wireless data network. The network uses the 1.9 GHz spectrum band, Qualcomm Inc.’s CDMA technology, LG Electronics Inc.’s base stations and Gtran Wireless Inc.’s modem cards. The carrier covers cities in Wisconsin, Minnesota, and North and South Dakota-partly because of low spectrum costs for the area and partly because there is little competition in the area. Customers can buy modem cards for their laptops or desktop computers and pay $50 per month for unlimited Internet access. Welke said the Plaza Hotel & Suites currently offers four Monet modems to guests, and the service pays for itself.
Monet won’t yet disclose exact subscriber figures, but George Tronsrue III, the carrier’s chairman and chief executive officer, said Monet now counts “several thousand” customers. He said Monet’s churn numbers are around 2 to 3 percent, and that it has enjoyed positive net adds for its first 11 months. He said the carrier’s growth rate plots at a 45-degree angle.
That’s not to say Monet is sitting comfortably, however. Monet won’t reach break even until 2006, and the carrier will need additional funding to reach that goal, Tronsrue said. Monet has raised $81 million in financing since 1999. Further, the company now faces a range of issues and challenges, from the emergence of Wi-Fi to possible competition from other carriers.
Indeed, industry watchers have questioned how Wi-Fi will affect the wireless industry, which is slowly working to offer wireless data at broadband speeds. Some consider the two technologies complementary, while others think Wi-Fi will cut into revenues from third-generation wireless.
However, the mention of Wi-Fi brings a smile to Tronsrue’s face.
“It’s almost comical,” he said.
Tronsrue said there is currently on average one public hot spot in each of Monet’s eight service areas. Some are in hotels while others are in local Blimpi sandwich shops. Tronsrue said Monet’s network covers the entire city, while the hot spots only stretch a few hundred feet. The difference, he said, is akin to the cordless telephone and the mobile phone. Thus, Tronsrue said he sees no competition from the new technology, although he said Monet could bundle Wi-Fi access with its wide area network offerings.
Most nationwide carriers have already launched such bundled services. And major mobile-phone makers have announced plans to offer phones with integrated Wi-Fi capabilities. It’s a sticky subject, and the wireless industry could use Monet as a gauge for the future.
However, Monet won’t only serve as a gauge for Wi-Fi. As CDMA carriers like Verizon Wireless and Sprint PCS look to upgrade their networks, Monet’s performance may guide their rollouts. Indeed, Verizon recently launched EV-DO networks in San Diego and Washington, D.C.
Tronsrue said Monet’s EV-DO network has performed much to expectations, and data usage is within the carrier’s engineering parameters. Tronsrue said 60 percent of the carrier’s customers are consumers, while 40 percent are enterprises. Further, 60 percent of users operate desktop computers, while 40 percent own laptops. Interestingly, Tronsrue said Monet has had to deal with copyright piracy and has warned a handful of subscribers not to download illegal music and movie files.
In the coming months, Tronsrue said Monet is looking to expand its device and service offerings. He said the carrier hopes to launch a networking product as well as EV-DO personal digital assistants and mobile phones-introductions that would depend greatly on similar rollouts from other EV-DO carriers like Verizon. Tronsrue said Monet is also looking to offer voice services either on its own network or as a mobile virtual network operator through another CDMA carrier. Tronsrue also said Monet would like to offer a data roaming service so its customers could travel outside of its coverage area using either Sprint’s or Verizon’s CDMA 1x networks. Tronsrue said Monet hopes to launch the data roaming service as well as voice services by the second half of next year.
So will such expansions of Monet’s business help the carrier succeed? It’s unclear, although the Plaza Hotel & Suites in Eau Claire, Wis., will likely be a potential customer.
“For right now, it’s really meeting our needs,” Welke said.
