Beaming broadband to the beach
(Business 2.0 Magazine) -- Brazilian resorts are woefully underserved when it comes to Internet access -- despite clear consumer demand for the service.
Investment level: <$100K
Risk Level: Medium
Barely 14 percent of Brazil's 188 million residents enjoy an Internet connection. But for those who do, the Web is as beloved as Ronaldo and Ronaldinho. For starters, Brazilians are among the most active foreign users of Google's (Charts) Orkut social network, the photo-sharing service Fotolog, and MSN Messenger.
Yet outside major cities like São Paulo and Rio de Janeiro, most Brazilians are stuck with poky dial-up service or nothing at all. And for major carriers, rolling out fixed broadband to those low-population areas wouldn't drum up enough revenue to justify the costs.
But what if you could set up wireless networks to deliver broadband to narrowly targeted groups of customers - tourists and well-to-do Brazilians at beach resorts, for instance?
"You have this tremendous pent-up demand for broadband access," says Charles Brown, president of California-based Wireless Networks, which sets up high-speed Wi-Fi for rural locales and founded a Brazilian company that handles wireless payments for retail merchants. "There just isn't anything there."
That scenario could change quickly - with the right team of telecom-savvy investors. The simplest method to bridge the gap would be to create a point-to-point network that can transmit a signal as far as 25 miles. (Most of Brazil's top beach resorts are within 15 miles of the nearest broadband connection.)
For each location, that would require spending less than $10,000 for transmission equipment, applying for a government license to tap into a carrier's data line, and Wi-Fi routers and other gear to start bathing hotels in signal. According to Brown, vacationers would pay $10 a day for basic service. At a 500-guest resort where half pay for Wi-Fi, the service would generate $75,000 in gross sales per month.
Consider Augusto Cardoso, a Brazilian director of product development for Pioneer Electronics already sold on the idea. Cardoso was on vacation recently with his family on the coast near São Paulo.