T1s are composed of two "tail circuits", and an Inter-office (IX/IXC) portion.
You're never going to eliminate the tail circuit from the CO out to the location (Starbucks), unless the building where the Starbucks is located is "on-net", of course. We'll call that unlikely for now.
If you're a large carrier, you will likely bring your own bandwidth into the CO(s) near the cell towers you operate. If you're a large nation-wide carrier, then you likely have cell towers near where the demographics that support a Starf*cks are located. Thus, you likely have bandwidth into the CO. e.g. you're co-located.
Once you've got your own bandwidth there (basically paid for by the voice biz) the T1s out to the local Starf*cks cost almost exactly nothing (call it $90/mo for a tail circuit in a major metro area.
The most expensive tail circuit I bought at Wayport was about $300. It went to Key West, Fla from Miami. There is no available copper in Key West, thus the "high" rate.
And Wayport wasn't big enough to be able to afford colo with the LEC. We were discussing it with WCOM at one point. (Wayport's network is hosted on Level3's colo sites, (and mostly Level3 intra-site bandwidth too.))
And we still had an average T1 cost of < $250.
Just because your ISP charges you $700/mo doesn't mean thats what they pay.
Now, consider what happens if T-Mobile decides to locate a Pico-cell on top of (or in) all of those *f*cks... You already have a T1 worth of bandwidth going out, which, given GSM CODEC rates, is nearly 100 simultaneous calls.
The other thing that makes larger hotspot operations go the T1 route is that you can a) order them in-bulk, with one email/fax/phone call, to literally 100s of locations and b) they're available *anywhere*. Try getting xDSL to j-random-hotspot. Repeat 100 times. Now repeat 1000 times.
Further, lets say that T-mobile does spend $1000 or even $3000 per hotspot, and that they have 2000 locations up and running. Thats $6MM, which is a lot to a start-up, but nearly meaningless to a company the size of T-Mobile.
So lets pretend that T-Mobile does pay $600/mo per T1: $1.2MM/mo
The ad campaign with Zeta-Jones costs more than that.
Hell, its likely that WiFi is a loss-leader for T-Mobile, an attempt to reduce subscriber 'churn', since T-Mobile/Voicestream at least used-to have the highest churn rate of almost any carrier. Do you know what subscriber acquisition costs are like for a cell phone carrier?
None of this means I'm a "fan" of for-pay Wifi, btw.
Jim
On Mar 26, 2004, at 1:18 PM, Glenn Fleishman wrote:
Jim Thompson <[EMAIL PROTECTED]> on 3/26/04 at 1:10 PM wrote:
The cost of the *average* T1 at Wayport (including the channelized DS3s
where they terminated) was $230.
T-mobile is a carrier. I assure you their per-mile rate on T1s is quite low, and they have (real) co-lo with the Bells.
Any IXC probably runs on fiber that they own or lease, so those charges
are nearly $0.
I'd guess they're making money, actually.
I think I need more detail to understand this. T-Mobile is co-located at all of the central offices run by the RBOCs? In which case, they must still be paying a per-mile fee and other fees to use copper off the co-lo since these Starbucks are generally not going to be near fiber loops that I'm aware of.
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