TengoInternet Develops a New WiFi Tiered Pricing Model for WiFi Service

Location: Austin, Texas
Industry: Campgrounds & RV Resorts

“In our experience, 30 percent of park guests need high-speed WiFi service and are willing to pay a premium for it” – Kevin Lloyd, Director of Sales

Freemium WiFi

TengoInternet has figured out how parks can provide at home quality WiFi service that can be affordable for both property management & guests. “This pricing concept, which we call ‘Freemium,’ is being successfully deployed by nearly 70 RV parks across the country, and has been in place in the hospitality industry for years,” said Kevin Lloyd, TengoInternet’s director of sales and marketing.

The Freemium WiFi pricing concept works like this for a 200-site RV park with 75 percent average annual occupancy: We provide free basic WiFi service to those who need it for checking email, Facebook, and other low-bandwidth Internet applications, but charge a daily, weekly, or monthly premium to those who need high-speed WiFi service for video streaming and other high-bandwidth applications.

“In our experience, 30 percent of park guests need high-speed WiFi service and are willing to pay a premium for it, much like commuters who pay to drive on special toll roads for a faster commute to and from work,” Lloyd said.

“So if we use the 200-site RV park with 75 percent occupancy as an example, if 30 percent of its occupied sites, or 45 guests, pay $30 a month for premium WiFi service,” he said, “the park will generate $1,200 a month to cover its WiFi equipment needs.”

Thirty dollars a month is the average cost for premium WiFi service across TengoInternet’s customer base. In TengoInternet’s experience, that’s enough money to enable the company to continually upgrade the property’s WiFi network and keep up with the latest advances in WiFi technology. In fact, it’s more than enough.

TengoInternet has calculated that if a 200-site RV park generates $1,200 a month in Wireless fees for premium service, only $1,000 will be needed to cover the cost of WiFi equipment, maintenance, and support services, while park operators can use the remaining $200 profit to help cover the monthly cost of their Internet circuit, which may be provided by Time Warner, Verizon or another Internet Service Provider (ISP) whose charges are necessary, but separate from TengoInternet’s.

“Because we have installed over 1,200 networks now,” Lloyd said, “we have learned that we can provide a fully turnkey, premium WiFi service level for about $4 to $6 per site per month, varying based on equipment type needed and individual park characteristics affecting our design. More importantly, though, the economics of WiFi have become predictable enough that we can now offer park operators – even those in highly seasonal locations or with limited bandwidth options – some light at the end of the WiFi expense tunnel.”