Most new hotspot operators price by looking at what the person down the road charges. That tells you what the market will bear, which is useful, but it tells you nothing about whether you will make money. Those are different questions and you need both answers.
Here is how to work it out from your own numbers.
Start with your real monthly cost
List everything, not just the bandwidth:
- Bandwidth — your monthly bill from the upstream provider.
- Power — including diesel or inverter running costs, which in practice are rarely small.
- Hardware amortisation — router, access points, cabling, spread over a realistic replacement window. Three years is reasonable.
- Support — your time, or someone else’s, answering “the internet is not working”.
- Losses — vouchers printed and never sold, and vouchers given away.
Suppose that totals ₦180,000 a month for a 50 Mbps link serving a small estate.
Then work out how many users that link supports
This is where the arithmetic usually goes wrong. Operators divide the link by the per-user speed and get a nonsense answer: 50 Mbps divided by 2 Mbps equals 25 users. In reality you serve far more, because not everyone uses the connection at once.
That ratio between what you sell and what you can deliver simultaneously is your contention ratio. For casual browsing on a residential hotspot, somewhere between 10:1 and 20:1 is usually workable. Push beyond that and evenings become unusable.
At 15:1, a 50 Mbps link sold in 2 Mbps packages supports roughly 375 concurrent-capable users. If a typical customer is online about a third of the time, that is around 120 to 150 active subscribers before quality degrades.
Be honest here. Overselling is the fastest route to a reputation you cannot fix with a price cut.
Now the price falls out
₦180,000 across 130 subscribers is roughly ₦1,385 per subscriber per month just to break even.
Price at ₦2,500 monthly and you make about ₦145,000 a month at full occupancy. Price at ₦2,000 and you make ₦80,000. Price at ₦1,500 and you are working for nothing.
You will not be at full occupancy from day one. Build the ramp into your expectations rather than concluding after six weeks that the business does not work.
Sell more than one product
A single monthly package leaves money on the table. Different customers value different things:
- Day pass — for visitors and occasional users. Highest price per hour, by a wide margin.
- Weekly — for students, and for anyone testing you before committing.
- Monthly — your base, and the one you want people on.
- A faster tier — there is always someone who will pay double for more speed. Serving them costs you almost nothing extra because they are a small minority.
The faster tier matters more than it looks. It raises your average revenue per user without requiring more customers, and it gives price-sensitive buyers a cheaper option to feel good about choosing.
Mistakes worth avoiding
Pricing against someone whose costs you do not know. The operator charging ₦1,200 may have free power, may be subsidised, or may be quietly losing money.
Forgetting device limits. A voucher without a device limit becomes a family voucher, then a compound voucher. Set the limit at sale time.
Ignoring the busy hour. Your service is judged between 7pm and 11pm. If it is unusable then, nothing else you do matters.
No fair-use enforcement. Without per-user limits, a handful of heavy users will consume most of your capacity and every other customer experiences the shortfall.
Track it, or you are guessing
You cannot price well without knowing what you actually sold. Vouchers printed, vouchers sold, vouchers used, revenue per batch. If that lives in your head or in a notebook, you will not spot that day passes earn twice per hour what monthly subscriptions do.
MikrotikAdmin tracks each batch, what it was worth and how much has been used, so the numbers you need for this exercise are already there when you sit down to review your pricing.