Doesn't it depend on your customer base? Did we hear that this is a small town? Your way of doing things is like mine. Show value and provide a good service and you will have very little churn in your customers. There are a number of small towns (1k-4k population) that I service, but once we went into the larger town (200k), we would have to give it away, longer ROI on the CPE, lower margin, etc. And the customers are more snobby when they are used to being overserved by the larger companies (telco & cable).
Being a small company, I have found that our initial focus is the best for us: small towns & rural area. We have a nice valley that (topographically-speaking) supports this well. We are members of the chambers of commerce, our kids have played sports together, see each other in the grocery store, etc. I have even gone so far as to work with the local hardware store to carry most of the general items that I use such as RJ45's, weatherproof tape, zip-ties, mounting screws & such. We charge $44.95 for a residential/mom & pop-type business with a $199 installation. We give a $25 credit to an existing customer who refers a new customer to us, and that new customer gets $25 off of their installation fee just for being referred. Works great. No contract...provide a good service and don't give people a reason to think about changing if they have a choice. This works for a small-town environment, but as I said, it all changes if you're going after a larger town/city/whatever. Then it's harder to sell your value at a higher price. You can do it, it just takes more. I believe that without a significant amount of funding available up front, a WISP would be crazy to try to come in at $25 per month. Consider that you may get 1 to 2 customers per month in the beginning until your advertising & word-of-mouth gets going (4-10 months depending on how much $$$ you sink into it). Then it will 'surge' to 4-6 customers per month. What I'm saying here is go conservative at first, make some $$$, then re-evaluate your cost/revenue model. If you overestimate, you'll be frustrated for a long, long time with the lack of funding you will have to do things. Now is a GREAT time to start a WISP. The major factor in expansion has always been CPE cost, CPE cost, CPE cost. When we started in 2001, it was like $600. Things went very, very, slowly because noone was willing to pay for the equipment. So unless we wanted to go further into debt, we had to grow at a snail's pace after we were covering our costs. I'm sure there's a spreadsheet that has been generated here for costs vs. revenue. Consider potential vs. reality & play it safe and you may not be disappointed. Mark Nash Network Engineer UnwiredOnline.Net 350 Holly Street Junction City, OR 97448 http://www.uwol.net 541-998-5555 541-998-5599 fax ----- Original Message ----- From: "JohnnyO" <[EMAIL PROTECTED]> To: "'WISPA General List'" <wireless@wispa.org> Sent: Friday, April 07, 2006 5:34 AM Subject: RE: [WISPA] Re: CPE Cost Ideas Needed > > I'm shooting at offering 1.5 Mbps service at around $24.95 and > > offering VOIP for another $24.95 if they so choose. So the > > competition hasn't a chance against me if I can get around that $350 > > CPE cost. > > > > IMNSHO - If you are trying to "compete" you will fall on your face in a > heartbeat. We charge more then the competition and we do so for a > reason. Our installs start at $250 for a 'basic' install. Our monthly > rates are atleast $10-$15/more then the DSL or Cable offerings in our > area. We avoid the bottom feeders this way. We could double or triple > our subscriber count within 12mos if we would drop down $15/mo for our > service but I refuse to do that. "Volume" of low end subscribers becomes > a very costly support decision. > > I refuse to compete on pricing - we are local - we hire local people - > we donate and support the local sports teams / associations. We shake > our subscribers hands in the stores / at gas pumps / baseball games. We > pump $$ into the local business's for our supplies, materials. > > $24.95/mo - If I were you - I would SERIOUSLY rethink your business > model. Oh - we also don't have contracts - We do have a TOS, but have > found there is really no reason to get subscribers to committ. If we do > our job - they will stay - if we fail to support them as we've promised > - they will bail. Kinda helps keep us on our toes :) > > JohnnyO > > -----Original Message----- > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On > Behalf Of Pete Davis > Sent: Friday, April 07, 2006 6:50 AM > To: WISPA General List > Subject: Re: [WISPA] Re: CPE Cost Ideas Needed > > > Joshua M. Andrews wrote: > > Cliff: > > > > Thank you for the information. The areas of DSL are very spotty and > > cable is very inexpensive and unreliable. Many people are upset at > > both situations. DSL is offered for about $30 per month with purchase > > > of a DSL "modem" at around $50 or so and a 1 year contract is > > required. Cable service rents you the modem for $10 per month and > > charges $40 per month for service on top of that ($50 per month total > > for those of you out there in other posts that think half-duplex is as > > > good a full-duplex). > > > > I'm shooting at offering 1.5 Mbps service at around $24.95 and > > offering VOIP for another $24.95 if they so choose. So the > > competition hasn't a chance against me if I can get around that $350 > > CPE cost. > > > > ---------- > > > > Pete: > > > > Thank you for the detailed response. I appreciate you taking the time > > to comment. I don't want to be rude but I took a look at your website > > > and it needs some work. :( > > In any case, I think you have a point. Could you elaborate more on > > what you meant by going with a 802.11b AP/CPE. Do you mean you are > > shooting a signal out to an area using WaveRider and then distributing > > > it via another 802.11b AP from there? I think your right about > > contracts and install fees and it sounds like your saying that I'm > > just going to have to eat the cost and extend my ROI per user. Thanks > > > again. > > > 900Mhz client to 802.11b AP to 802.11b client is one scenario, but I > would also put 802.11b APs on the main tower. If you put up a $300 AP > and 5 $150 CPE, you will be doing better ($220 average customer > equipment cost) than a purely Waverider network. You should be able to > do better than 5 clients per AP. > > Yes my website needs work, but we always have more installs that we > possibly have time to get to. When we get caught up on installs, we will > > revamp the website to bring more in. > > I wouldn't count on giving 1.5M to every customer on your network over > Waverider. I have played with every GOS setting I can come up with, and > cannot MAINTAIN over 1Mbps connectivity to multiple clients. > > I would also consider the thought that you don't have to be the cheapest > > ISP in town to be the busiest or the best.. Its gonna take a LOT more > $25/mo clients to get traction than at $40 or $50/mo. I wouldn't install > > any customer who will take 12 months to get CFP (cash flow positive, > paying for CPE and installation costs). Not starting out, anyway, unless > > I was DESPERATE to get market share. Desperation is almost never a good > position to be in. > I get $39/mo for residential service and $59/$99 for business service. > DSL is cheaper, and in one area, Cablemodem is cheaper. We still stay > busy with new customers, and we don't put in a new tower until the last > tower is CFP. More money coming in the door than going out is a big part > > (only part?) for successful business. ISP business is no exception. When > > you run out of money, you are out of business. > -- > WISPA Wireless List: wireless@wispa.org > > Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > -- > WISPA Wireless List: wireless@wispa.org > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
