BART Rolls out Pay WIFI?

Seems like we might be seeing Wifi on BART:

The test, which will cost between $1.5 million and $2 million, involves the Embarcadero, Montgomery, Powell and Civic Center stations. Lee said that once the test concludes, he hopes Wi-Fi Rail will be designated as the “lead carrier” to install wireless service throughout the BART system, a project that will take between 18 and 24 months to complete and will cost approximately $55 million.

Once the BART test concludes, which should occur by the end of the year, Wi-Fi Rail plans to charge customers $10 per day, $30 per month or $300 per year for wireless service; corporate rates also are available.

BART says that 175k people could potentially use the service. Let’s be optimistic and say 300k potential customers. They’ll only get a 20% conversion rate at BEST. Which is 60k customers at $30 per month or $1.8M per year in revenue. Assuming this is 100% profit it will take them 30.5 years to earn back their investment.

I don’t think these guys have done the numbers. What VC would invest here?

I’ve got to be missing something.

Seriously. Why does it cost $55M to install wifi? This is crazy.

  1. Ben

    Yeah, the $55m pulled-out-of-ass figure aside, two things also spring to mind:

    1) Who in their right mind is going to want to buy a ‘day pass’ for wifi on BART. I mean, it’s not like you hang around the station all day working (like you would a hotel room, etc)

    2) Do you REALLY want to be getting your laptop out on the BART anyway? It’s sketchy at the best of times. The current OFFICIAL advice from the BART operators is to buy different ear buds from the ones you get as standard with an iPod because the amount of iPod thefts that occur from people recognizing the iconic headphones. Now they want to encourage us to get out our laptops???

    Final thought: there’s EVDO through most of the network anyawy, even the underground parts like at Powell and Civic Center. It would be cheaper to buy an EVDO plan and you could use it everywhere.

  2. Hi,
    As you know, Wifi Rail is paying for the installing of the Wifi system, meaning BART riders or taxpayers aren’t paying a dime. I am told that WiFi Rail hopes that it will pick up a number of customers who live and work around BART stations. There’s a huge market of people living and working around BART lines who potentially could use the wifi network. Wifi hopes that their network will allow a customer to be on line with cable-like speeds (or greater) as they get on at Pittsburg/Bay Point ride the trains through the tunnels and tubes and get off at Millbrae without losing signal strength. This means the network will not be limited to just BART riders.
    Hope that helps answer your question.
    -Linton Johnson
    BART Chief Spokesperson

  3. Hello,

    As Linton Johnson pointed out WiFi Rail is covering the costs of the test and creating an additional communications medium for BART commuters. The most important part of the test is the speed, not the connectivity. Last week on the average download speeds for the WiFi Rail network on BART where 7.8Mbps with upload averages of 6.9Mbps. For $1 per day WiFi Rail expects there are few competitors willing to provide this bandwidth. What is the average speed of any of the wireless providers data networks? What is your current throughput at your home or office? WiFi Rail delivers a network to support converged applications today.

    The WiFi Rail network supports all devices, i.e. iPhones, PDAs, tablets, VoIP phones, laptops, etc. WiFi Rail does not expect that all of the users will be laptop based. WiFi Rail is targeting the market of commuters riding the rail more than 25 minutes. During this time a user, with a continuous high-speed signal, could download their e-mails, pay their bills online, and be prepared for work.

    The estimated $55 million is directly related to the 104 miles of track, more than 40 miles of it underground, bi-directional, which can only be serviced during non-revenue hours, aerial installations which can only occur during non-revenue hours, antennas to compensate for the curves, the 600 + BART cars which will need to be retrofitted, and the collapsed backbone of single mode fiber cables. The additional cost of BART’s supervision and management is large. WiFi Rail will maintain a free high-speed service until a significant portion of the network is built. Access to the BART website will always be complimentary.

    WiFi Rail anticipates ROI when reaching 300,000 users. This provides for a swift payback to investors. The aforementioned 60K users per month, with revenue of $30 per user per month, will yield $1.8 million per month or $21.6 million per year.

  4. Hey Cooper.

    Actually…. I did my math wrong…. No excuse really.. I’m supposed to be good at this stuff. Though I was running out of the house at the time :)

    Yeah…. 2.5 years to make the revenue to == the investment.

    I hope it works though..

  5. Maybe I’m wrong here, but doesn’t WiFi Rail want to expand both horizontally and vertically as a result of the BART “experiment” ?

    For example, assuming the BART partnership actually works out providing ‘quality’ service to BART patrons (and surrounding areas), even at a loss, they are now in a position of strength to acquire other transit services around the country (and potentially internationally).

    If this is true, perhaps ROI on this particular infrastructure is less meaningful.


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