Stu Fleming, who came to Dunedin from the UK via a stint in Papua New Guinea, was once part of the computer science faculty at Otago University - but he gave up academia to start a new business as one of the city's internet service providers.
Fleming has installed 50 nodes around the city to create a wireless internet service that he sells through his company Wireless Internet Connections (WIC). It offers student internet packages for $79.95 per month with speeds of 3.5Mbps download, 1Mbps upload and no data caps or contracts. The service operates from February 1 to November 30 and appeals to students that don’t wish to pay for a phone line.
The deal has attracted around 250 student flats out of a subscriber base of 2000 residents. WIC also runs Wicked Wireless, a free wi-fi service with around 9000 casual users. Pitched at the tourist market, Fleming will soon be featuring advertising on the login page to help pay for the service.
Fleming says he’s spent hundreds of thousands of dollars on creating WIC and Wicked, and is only beginning to see a return on investment after seven years. Helping the business case is Otago Polytechnic, which pays him to provide free wireless connectivity to all its students.
He also maintains the webcams that are dotted throughout the city for the Dunedin City Council, and he says he enjoys filming Dunedin events that the whole world can tune into over the web. When Computerworld caught up with him, Fleming was monitoring a webcam positioned outside the Otago Settlers Museum as a historic locomotive was being moved to the museum that day.
WIC plans have no data caps because Fleming says he is able to manage demand, but he keeps a wary eye on international bandwidth. He says roughly five to 20 percent of subscribers use 80 percent of the available bandwidth. His national and international bandwidth are supplied by FX Networks, and the provider doesn’t charge him for national backhaul.
ISPs usually complain that the reason for data caps is the high cost of international connectivity, but Fleming says a large percentage of content is cached in New Zealand and this helps cut down on international traffic.
Computerworld asked if he thought ISPs that do charge for data caps were using them, not to cut costs, but to make more money.
“It’s hard to comment on other people’s business models. I know from my operation I have to be very efficient in terms of cost to stay extremely lean.”
Fleming, who would have liked the Flute Network to have won the Ultra Fast Broadband contract for Dunedin (it is part of the Chorus deal), says he is concerned about how the new network will affect his business. Fibre broadband speeds will be far superior to current offerings on copper, which he can compete with, but the finanical cost of being an RSP (retail service provider) on the UFB network may be too high.
But if his business remains viable, Fleming says he might look to franchise the operation to other cities.
This is the third in a series of articles about the Dunedin IT scene. Tomorrow Computerworld looks at The Distiller - an initiative for fledgling IT start ups.