Celaero gets jump on Wi-Fi boom

Brad Rathbun and Don Meldrum think they have an irresistible offer for the hospitality industry.

Now they worry that it may prove too irresistible.

A year-old company founded by Rathbun, an Elko resident, and Meldrum, who lives at Winnemucca, offers to install high-speed wireless internet service in hotels, restaurants, RV parks and the like.

The sales hook: The installation is free.

Their company, Celaero Communications, makes its cut on the back end as consumers pay each time they make a wireless connection.

The offer proved irresistible to Michael Coward, general manager of the Best Western Airport Plaza in Reno.

His 269- room hotel last month apparently became the first in the region to offer high-speed wireless access throughout the facility everywhere guest rooms to the swimming pool to parts of the parking lot.

Installation of wired internet service in the 22-year-old property would be an expensive hassle, Coward said the other day, but he wasn't crazy about paying hefty upfront costs to install Wi-Fi service.

At the same time, he was getting encouragement from Charmaine La May, the hotel's director of sales and marketing, to move quickly.

"I just knew it was coming," she recalled.

"So why not move quickly and get a jump on the competition?"

Access to wireless internet connections is growing in importance to the corporate and government markets targeted by the Airport Plaza, and La May was anxious to get a competitive advantage in those markets.

The deal Coward signed with Celaero calls for free installation of a Wi-Fi system essentially, a series of small radio transmitters attached to an internet connection throughout the hotel.

In exchange, Celaero gets a cut of customers' sign-up fees $4.95 an hour, $9.95 a day.While the precise cut of the revenue varies with each deal, the company usually starts talking about a 50-50 split.

Rathbun said potential customers ranging from RV parks to vacation resorts are strongly interested in Celaero's package.

And that presents a dilemma to the little company: On one hand, Rathbun said, Celaero wants to nail down as much market share as possible as the wireless business takes off.

Nationwide, the Gartner Group estimates more than 5,000 locations will offer Wi-Fi service by 2005.

"We're a fast-moving company.We want to get as many locations set as possible," he said.

On the other hand, Meldrum and Rathbun recognize that every new

location requires a healthy upfront investment in equipment and labor an investment that will be paid back over time.

That means, they said, that the young company needs to balance its desire for fast growth with the need for caution to insure it doesn't outrun its owners' resources.

So far,Meldrum and Rathbun have financed Celaero themselves.

They're no strangers to building internet companies.

Both were executives of CyberHighway of Nevada, an internet service provider in the Winnemucca and Elko areas, and both have launched Wi-Fi services in northeastern Nevada.

Meldrum and Rathbun also have launched FiberHigway LLC, a nationwide dial-up internet service provider.

It's operational in 49 states.