How to Make Money with Wi-Fi Hotspots

Basically anybody. As you will see, you don't have to own a hotel, or cafe (but it's better if you do of course). You can set up a hotspot in a busy neighborhood and offer lower prices then your ISP offers. Or you can find locations where wireless internet access is not available yet, or you can offer an alternative to the existing ones.

Which places are ideal for hotspots?

The best ones are: airports, campgrounds, hotels, cafes, tourist attractions, marinas. The more tourists a place has, the better.

1. Type of location

A Business Lounge in a large Airport can make more transactions than a small motel in a small town. They can also sell the accesses for more. Let's see some real examples (amounts mean gross income):

Business Lounge in an Airport: about 2000 USD / month
Average Campground Site: about 800 USD / month
20 Room Hotel: about 500 USD /month
Internet Cafe (where the same system is used for desktop computers): 1000 USD / month

This is a location's gross income. From this you have to pay for the internet connection, operation costs and commission to a 3rd party who charges guests' credit cards.

2. Competitors

You always have to look after your competitors before you set the prices for the hotspot. If you open a laptop in a location and can see various open hotspots, you won't be able to sell the access for a high price.

3. Are you the owner or you live near the place or you are just the operator?

If you are the owner, you can keep most of the money that your hotspot generate. If you are not the owner, you have to make a deal with the owner and share the income. Or you can keep all the income and offer the place to pay for the internet connection and the hardware, and do the support. With a minimal technical knowledge, you can easily setup a hotspot for a location that belongs to someone else.

Wi-Fi hotspots broadcast open (unencrypted) wireless signals, so anyone can connect to them without knowing any passwords. But when they open a browser and type their favorite web address, they are forwarded to the location's hotspot start page (called as 'Splash Page'). This contains basic information about the place and about how to gain access to the internet. Usually there are access packages/plans, that you can choose, for example 1 hour for $1.95, 24 hours for $9.95, etc. Prices may vary by each locations. You can pay for the access by credit cards or Pre-Paid cards (if the system supports it). After you buy a plan, you can use the internet for a limited time.

When you log in to a hotspot, your username and password is verified by a radius server which can be located anywhere in the world. This server sends back the answer to the router, whether you are allowed to log in to the hotspot or not. This is the same way that your ISP does, when checking your ADSL account.

To setup a Wi-Fi hotspot service you will need a broadband internet connection (this is the internet connection you will share) and a $60 wireless router minimally for one location. In my opinion the best low-cost router for this purpose is the LinkSys WRT54GL which comes with an upgradable firmware. It is not recommended to use N-type routers (although it's a newer technology), because they are not performing better in a long distance.

Default range of the Wi-Fi router is about 50-100 meters, depending on the location's characteristics (walls, trees, etc). But you can easily extend this range to 500-1000 meters by replacing the built-in antenna with a stronger one.

But routers doesn't come with a hotspot billing software. You have to use a centralized server to verify the accesses to a hotspot. You can operate a server on your own, but then you'll also have to solve how you charge credit cards.

The most easiest and hassle-free way to do all this is called hosted hotspot solution. There are companies who operate radius servers and have their own internet merchant account (this is required to be able to charge credit cards) so you don't even have to need one. They ask for a commission from the end user income of course, because they pay transaction fees for Visa and Mastercard (instead of you), they operate servers, do the support, etc. But -in my opinion- they are dedicated to do that for that money, so you will get a professional, reliable and easy-to-use system.

There are several companies who offer this kind of service, i have tried a lot, compared features, and ended up using the service of Hotspot System. They ask for 30% from the end-user income, which can be less if your hotspots generate 1000 USD+ in a month (as low as 20%). For that fee, basically they provide you all the tools you need. You only need to setup the router, which takes about 10 minutes. No professional computer knowledge required, you just need to know the basics. After that you can manage your Hotspot, set prices, etc. from a centralized web interface.

HotSpot Management can be done via an easy to use web interface so you can manage your hotspot locations remotely. From there you can do the following:

- Add unlimited locations to your account. If you have partners, like hotels or cafes, you can add those locations to your account.

- In the locations list you can see which hotspot is operating (routers are sending life signals in each hour), how many users are connected and what are the system loads on the routers.

- You can set access packages for each locations. For example you can set a 1 hour plan for $2.95, a 24 hour plan for $9.95, a monthly plan for $24.95. You can even charge users in your own local currency (they support 144 world currencies). This means your users will be charged in your local currency without any conversions. That's great, isn't it? Furthermore, you can set different prices for each locations.

- You can set bandwidth and traffic limits to a package. You can even sell a low-bandwidth package cheaper, and a high-bandwidth package for more.

- You can see transactions in real time.

- You can see the usage by each hotspot users.

- You can create purchase reports by locations or by payment types.

- You can create charts to see which location generates the most income, which countries your hotspot users came, etc

- Create Secondary Logins to your partners (if you are not owing the place but makes a deal with the hotel owner for example), so they can check their hotspots and transactions (but only those which they have access to).

If you own a location where you can setup a hotspot, you just need a few steps to start.

If you are willing to partner with locations, you will need a business model.

Most operators give the router for the location for free, or they even pay for the internet connection, but keep most of the income.

The preferred way is to offer some share to the owner, to have a win/win partnership. It is up to you how many locations (partners) you can get and how much share you keep. The more locations you have the more money you will earn.