In-Building Wireless: How do wireless service providers decide which buildings need it?
The Wireless Service Providers (WSPs) use a Return on Investment (ROI) calculation to determine if an in-building wireless system is a feasible solution for a given venue. This ROI calculation allows the WSP to determine how long it will take them to recover their initial investment and begin to make a profit. There are two key components to this calculation; cost and potential revenue.
Factors that impact the cost of an in-building wireless system
The cost of the In-building system can vary greatly between different buildings. Several factors impact the cost of a system:
- Size of the facility – this is the no brainer, larger buildings require more equipment and higher installation costs.
- Construction of the facility – impacts the cost of the in-building system in two ways. Buildings that are constructed of heavier materials (e.g., concrete block or stone walls, plaster ceilings) require more antennas to provide adequate coverage when compared more open spaces (e.g., cubicles with dropped ceilings). Dense construction also makes the installation of the system more difficult and therefore more costly.
- WSP requirements – the level of service required can have the greatest impact on the cost of the in-building wireless network. If the goal of the system is to offload traffic from the existing outdoor network, the system must overpower the existing coverage. In downtown areas, this can double or even triple the cost of implementation when compared to a system that is designed to cover a building that has poor signal strength.
Factors that influence potential revenue
To offset cost, WSPs consider the potential revenue to be generated by the in-building wireless system. This revenue is measured in minutes of use on the network or new subscribers committed by the building owner or tenants along with the commitment for the system. Factors that impact these numbers for your building include:
- Tenants – for any building, the first consideration is the tenants of the building. Are the tenants existing corporate clients of the WSP? Will the tenants add new subscribers in return for installation of an in-building wireless network? In a single tenant building, this can be a very straightforward trade-off of committed subscribers in exchange for a WSP funded in-building network.
- Traffic in the building – additional minutes of use can also be generated by the volume of customers that come through the building. The volume of traffic may vary greatly depending on the type of building and type of tenants in the building. For a public venue, this may be the largest portion of the revenue.
Additional Considerations that can tip the scale
While ROI is the primary driver for funding an in-building network, a few additional factors may influence the decision when the ROI doesn’t quite make the cut:
- Congestion on the outdoor network – if the building is of a substantial size in a busy area, the in-building network may be able to offload enough traffic to reduce the number of blocked calls or meet the target data throughput.
- Strategic importance of the building – some buildings are more notable than others and will stand out in a customer’s mind if they are a wireless dead zone. WSPs want to cover these buildings to improve customer satisfaction levels.