In order to answer what ROI one is looking for, one must first define what
costs need to be recouped.
In higher end markets, the aquisition cots are much higher than that of the
equipment itself.
The majority of the customer revenue the first year may go to get the ROI on
Aquisition costs.
"Aquisition" defined as cost to obtain customer, not gear.
So one must determine how much of the monthly fee is allocated toward
getting an ROI on equipment.
For example, if the monthly fee is $300/mon to subscriber, and it is assumed
2/3 of it should go towards recovering "Customer Aquisition" costs,
then only $100 of the monthly gets allocated for recovering ROI on
equipment. Thus if one wanted a 6 month ROI, it would mean, They could pay
up to $600 for a CPE, to obtain it.
My point is the Radio is not the only cost. Thus not the full monthly cash
should be considered for equipment ROI. What makes "equipment" any more
important to recover costs on, than the oher many things that occur cost?
Why isn't the question... How long an ROI does one expect, to recover its
marketing costs, to determine how much they can spend on marketing? Why does
equipment come first?
I agree with the lease folks... ROI is not best determined in number of
months sinse start date. Instead I like to look at it as, over three years,
what percentage of the monthly fee can I afford to ahve go towards
equipment. Can I afford 10%, 20%, or 30% of the monthly over 3 years to go
to equipment? This enables a business owner to make a plan that reflects
his own market conditions.
In high arpu markets, the day of 6month ROI is over for hardware. We can buy
a $1000 peice of equipment, that can deliver 20mbps, worth $2000 a month in
revenue. The last mile link, in that case, is expected to be a fraction of
the cost of one month's revenue. The cost of the hardware starts to be
insignificant. The larger cost, are the costs of the complete business model
of operation and ability to delivery solution.
I believe we are getting close to the day where the question is getting
turned around. Not "what equipment model will enable an ISP to attract
customers and be profitable", but instead "what ISP models and providers
will enable the sales of radios from manufacturers". The falicy I had when
starting out was.... " If I could get teh best product, I could be more
competitive". But what I'm learning is that the success is driven by myself
and how lucrative my strategies are. If my strategies are good, I could
insert any product into the equation, and it could work. The most
successfull manufacturers will be the ones that find away to entice the
largest number of insightful providers, to add value to their hardware
solutions.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: "Marty Dougherty" <[EMAIL PROTECTED]>
To: "WISPA General List" <wireless@wispa.org>
Cc: "WISPA General List" <wireless@wispa.org>
Sent: Thursday, November 29, 2007 8:43 PM
Subject: Re: [WISPA] What basic ROI do you target?
That's what happens when you leave one out near children.. They can't
help but play. I have to hide it :)
This message was sent from my Iphone
--------------------------------
Marty Dougherty
CEO
Roadstar Internet Inc.
703-554-6620 (office)
[EMAIL PROTECTED]
On Nov 29, 2007, at 7:53 PM, "Mike Hammett" <[EMAIL PROTECTED]>
wrote:
That's an IPhone for ya... all show and no go!
-----
Mike Hammett
Intelligent Computing Solutions
http://www.ics-il.com
----- Original Message ----- From: "Marty Dougherty"
<[EMAIL PROTECTED]
>
To: "WISPA General List" <wireless@wispa.org>
Sent: Thursday, November 29, 2007 6:38 PM
Subject: Re: [WISPA] What basic ROI do you target?
This message was sent from my Iphone
--------------------------------
Marty Dougherty
CEO
Roadstar Internet Inc.
703-554-6620 (office)
[EMAIL PROTECTED]
On Nov 29, 2007, at 7:35 PM, "Patrick Leary"
<[EMAIL PROTECTED]
> wrote:
I am curious about how divergent the responses may be. In your answer,
include just the cost of the truck roll and CPE measured against any
set-up and service initiation fees charged with the monthly
subscription
fee.
Years ago, it was not uncommon for WISPs to say they need a 24-month
basic return per subscriber. These days I suspect most will say under
9
months.
Patrick Leary
AVP, Market Development
Alvarion, Inc.
o: 650.314.2628
c: 760.580.0080
[EMAIL PROTECTED]
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