Actually, I wasn't trying to say that CPE prices would go down 50%, I don't think they will. Just pulling nice round numbers out the hat. That doesn't change my point though, that in a deflating economy, debt that is being taken on will be repaid with dollars that are worth more and/or are harder to come by, unless you are lucky enough to be in a sector of the economy that isn't affected (as much) by the deflationary cycle. I hope that we are in such a segment.
On Sat, January 3, 2009 3:01 pm, e...@wisp-router.com wrote: > Don't expect to see that price of the cpes will drop by 50%. At $60-$100 > there isn't much left to go lower. Especially considering shipping a cpe > with integrated antenna $5 to $10 from manufacturing plans in asia. > As well some semiconductor parts are currently going up instead of down as > plans are being closed left and right. At current rate electronics will be > up in price maybe as much as 20-30% in a year or two if things don't > change soon. > > /Eje > Sent via BlackBerry from T-Mobile > > -----Original Message----- > From: "J. Vogel" <jvo...@vogent.com> > > Date: Sat, 03 Jan 2009 14:44:48 > To: WISPA General List<wireless@wispa.org> > Subject: Re: [WISPA] Congress may help smaller ISPs grow > > > Another way of looking at it is that if deflation is occurring, and you > have committed to pay for the CPE via leasing, you will be using future > dollars that are worth more to pay for them, (e.g. at the time I commit > to paying $100 for a cpe, each of those $100 would purchase a loaf of > bread, but following the deflation of the dollar, each $dollar used to > pay the lease would have purchased TWO loaves of bread.) so the real > cost of those CPE is higher. That is even without figuring deflation on > the CPE themselves. If deflation hits the CPE market as well, committing > to pay $100 for CPE that 6 months from now will only cost $50 may not be > a good position to be in. > > In any case, in a generally deflating market, pressure will be high to > reduce prices, including subscription prices for Internet Access, so > there may be fewer dollars available to pay those lease commitments, > even though the dollars you do have are worth more. > > John > > Brian Webster wrote: >> Tom, >> >> <snip> ... If however you bought all of that >> equipment using credit and they deflate the dollar you have actually >> hedged >> against the deflation because your cash did not get deflated, yet you >> are >> still producing revenue on the other people's money you used. If you can >> get >> good credit terms and can make the numbers work I would personally >> borrow >> like crazy and expand to ramp up cash flow. The numbers will work if the >> government doesn't cause deflation, but if they do it works out even >> better. >> >> People who have loans always make out better in deflationary times over >> people who have hard cash assets. If you don't have assets they don't >> lose >> value. The person who built their business on cash or personal assets >> loses >> out twice. First the value of everything they already paid for >> depreciated >> in a big way and then the cash flow they are producing is buying less >> because of inflation. Hope that makes sense...... >> >> >> >> Thank You, >> Brian Webster >> >> -----Original Message----- >> From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org]on >> Behalf Of Tom DeReggi >> Sent: Saturday, January 03, 2009 3:23 PM >> To: WISPA General List >> Subject: Re: [WISPA] Congress may help smaller ISPs grow >> >> >> Chuck, I will contact you offlist. I have some question. >> I have not tried SBA recently, and its time that I probably should, >> before I >> critisize the program. >> >> My point was... In past experience.... SBA enabled guaranteeing very low >> rates, but SBA could sometimes be harder to get than traditional loans, >> as >> SBA required more documentation. Very few SBA loans get defaulted on, >> because they have such strong requirements. I found the same thing with >> RUS >> loans. The misconception by many is that SBA gives loans, which is not >> the >> case. SBA guarantees other bank loans. So those banks are giving loans >> at >> lower interest than they normally do, because of the SBA's guarantee. >> But >> the SBA still wants to cover themselves similar to any other lender. It >> does >> not get the borrower off the hook for proving credit worthiness, by >> traditional industry methods. What I always found Ironic was that to get >> the >> SBA loan, one had to prove they were turned down by other lenders. But >> then >> the SBA potentially would turn down applicants for the same reasons. >> >> All loans have the same requirement, proving 1) ability to pay back >> (pre-existing consistent cashflow and profit from revenue stream), 2) >> proven >> credit worthiness, 3) colateral. >> Getting a lower interest, just makes the lenders look more closely to >> prove >> the above. >> >> There are very few lenders that will lend based on a potential of a >> "business plan" (that does not have pre-existing good cash flow to back >> it >> up), or simply based on the merit of the business. I find that >> borrowers >> that don't have problems getting loans are borrowers who have had a past >> life that had already established their high credit worthiness, usually >> via >> personal assets, or by having multiple officers to guarantee the loans. >> >> The big problem that I ran into was... I sold most of my traditional >> assets >> to fund my network build outs. And then invested all profit back into >> the >> business to build out the network, there fore increasing potential. And >> then >> Banks did not look at those network assets with a value, the same as >> they >> would if it was still real estate, so to speak, that was recognized as a >> safe liquitable asset. >> >> I have found that obtaining finance requires long term planning and >> preperation, to position oneself to look good to financers by their >> standards. I have found that being more or less debt free, and owning a >> network, had no value to the lenders that I have talked to. >> >> Even with RUS matching fund loans, it seemed similar. They were more >> interested in what new money I'd put in, for them to match, and did not >> value the money already put in and spent.. >> >> My company is growing, and my financials are improving to be loan >> worthy, so >> I won't have a finance problem to much longer. But it was a long road, >> and I >> do not wish the same experience to other new start ups, and small >> providers >> that grow to the same point. >> >> Tom DeReggi >> RapidDSL & Wireless, Inc >> IntAirNet- Fixed Wireless Broadband >> >> >> ----- Original Message ----- >> From: "Chuck Bartosch" <ch...@clarityconnect.com> >> To: "WISPA General List" <wireless@wispa.org> >> Sent: Saturday, January 03, 2009 1:25 AM >> Subject: Re: [WISPA] Congress may help smaller ISPs grow >> >> >> >>> On Jan 2, 2009, at 12:13 PM, Tom DeReggi wrote: >>> >>> >>>> What I'd like to see is a SBA Broadband Lease guarantee program, >>>> that is easier to qualify for than traditional SBA guarantees, to >>>> help open up lending to the WISP market. There is tons of money out >>>> their, But its harder than said for most to prove themselves "credit >>>> worthy". >>>> >>> I haven't seen access to money to be that much of a problem. I'm a >>> relatively small operator (compared to Travis, for example), but I got >>> a $285K SBA loan last year with no trouble at all. Took just a few >>> weeks. The rates weren't bad at the time (8.25%), but they are lower >>> now I think. Have you actually *tried* the regular SBA route? In our >>> case it was authorized both for "pop" build out as well as inventory >>> (and a small percentage could even be used for working capital if we >>> wanted) and it sure didn't seem hard to qualify for. >>> >>> Chuck >>> >>> >>> >>>> I'm seeing high risk lenders being more open to 1 yr leases. But >>>> lenders are still concerned about 3yr leases, when they realize 3 >>>> yrs is a long time, and plenty of time for a WISP to loose their >>>> custoemrs to Comcast or FIOS. Expecially when grant programs are >>>> talked about that might subsidize Fiber Optic deployment growth. >>>> >>>> Tom DeReggi >>>> RapidDSL & Wireless, Inc >>>> IntAirNet- Fixed Wireless Broadband >>>> >>>> >>>> ----- Original Message ----- >>>> From: Travis Johnson >>>> To: WISPA General List >>>> Sent: Thursday, January 01, 2009 11:47 PM >>>> Subject: Re: [WISPA] Congress may help smaller ISPs grow >>>> >>>> >>>> We have been charging the same for internet service for almost 5 >>>> years.... and just two days ago, we got double the new sign-ups on a >>>> single day of what we can do for installs. Business is booming in >>>> our area and our industry. Just looking at our 2008 financials, our >>>> gross revenues are up 15.2% and our Net Profit is up 10.3%. >>>> >>>> And I'll take the bet on being able to lease or finance equipment >>>> in 6 months. How much shall we throw on the table? I have lease >>>> companies calling me daily wanting to give me money... seriously... >>>> I get 3-4 calls PER WEEK from all different leasing companies. They >>>> all have money and want "credit worthy" companies to use it, because >>>> that's how they make money. >>>> >>>> So again, how much shall we bet on this? :) >>>> >>>> Travis >>>> Microserv >>>> >>>> rea...@muddyfrogwater.us wrote: >>>> ++++++++++++++++++++++++++++++++ >>>> <insert witty tagline here> >>>> >>>> ----- Original Message ----- >>>> From: "Travis Johnson" <t...@ida.net> >>>> To: "WISPA General List" <wireless@wispa.org> >>>> Sent: Thursday, January 01, 2009 7:24 PM >>>> Subject: Re: [WISPA] Congress may help smaller ISPs grow >>>> >>>> >>>> You can not grow in large scales without financing... and I don't >>>> understand why people are against it. Our last equipment lease was >>>> under >>>> 10% interest, no personal guarantees, no money up front. We were >>>> able to >>>> purchase a large quantity of CPE units (thus saving us about 20% off >>>> the >>>> single unit price). So, in the end, it actually saves money and the >>>> "cost" >>>> of installing a new customer is $0 to you, because the $99 >>>> installation >>>> fee pays for the time, materials, etc. >>>> >>>> Example: >>>> single CPE = $190 each >>>> 460 CPE = $155 each >>>> >>>> 36 month lease on $71,300 = $2,300 per month x 36 months = $82,800 / >>>> 460 >>>> units = $180 each >>>> >>>> But in 36 months, you might be able to charge no more than 10 >>>> dollars / >>>> month per customer. That's the magic of deflation - which is already >>>> occurring. >>>> >>>> And it costs you $5 per month for 36 months for the equipment on that >>>> customer... that's pretty cheap even if you only charge $29 per >>>> month. :) >>>> >>>> Whatever happens in the future... It will NOT be the same as today. >>>> Inflation or deflation will happen. No way around it. Congress has >>>> already taken on more debt than can be serviced. Neither scenario >>>> will >>>> let you survive being in debt. >>>> >>>> Besides, don't expect to be able to lease equipment at any rate or >>>> terms >>>> within 6 months. >>>> >>>> >>>> Travis >>>> Microserv >>>> >>>> >>>> >>>> >>>> ------------------------------------------------------------------------- >>>> >> ------- >> >>>> WISPA Wants You! Join today! >>>> http://signup.wispa.org/ >>>> ------------------------------------------------------------------------- >>>> >> ------- >> >>>> WISPA Wireless List: wireless@wispa.org >>>> >>>> Subscribe/Unsubscribe: >>>> http://lists.wispa.org/mailman/listinfo/wireless >>>> >>>> Archives: http://lists.wispa.org/pipermail/wireless/ >>>> >>>> >>>> >>>> >>>> ------------------------------------------------------------------------- >>>> >> ----- >> >>>> >>>> >>>> >>>> ------------------------------------------------------------------------- >>>> >> ------- >> >>>> WISPA Wants You! Join today! >>>> http://signup.wispa.org/ >>>> >>>> ------------------------------------------------------------------------- >>>> >> ------- >> >>>> WISPA Wireless List: wireless@wispa.org >>>> >>>> Subscribe/Unsubscribe: >>>> http://lists.wispa.org/mailman/listinfo/wireless >>>> >>>> Archives: http://lists.wispa.org/pipermail/wireless/ >>>> >>>> >>>> ------------------------------------------------------------------------- >>>> >> ----- >> >>>> No virus found in this incoming message. >>>> Checked by AVG. >>>> Version: 7.5.552 / Virus Database: 270.10.1/1870 - Release Date: >>>> 12/31/2008 8:44 AM >>>> >>>> >>>> ------------------------------------------------------------------------- >>>> >> ------- >> >>>> WISPA Wants You! Join today! >>>> http://signup.wispa.org/ >>>> ------------------------------------------------------------------------- >>>> >> ------- >> >>>> WISPA Wireless List: wireless@wispa.org >>>> >>>> Subscribe/Unsubscribe: >>>> http://lists.wispa.org/mailman/listinfo/wireless >>>> >>>> Archives: http://lists.wispa.org/pipermail/wireless/ >>>> >>> -------------- >>> Chuck Bartosch >>> Clarity Connect, Inc. >>> 200 Pleasant Grove Road >>> Ithaca, NY 14850 >>> (607) 257-8268 >>> >>> If all is not lost, where is it? >>> >>> >>> >>> >>> >>> -------------------------------------------------------------------------- >>> >> ------ >> >>> WISPA Wants You! Join today! >>> http://signup.wispa.org/ >>> -------------------------------------------------------------------------- >>> >> ------ >> >>> WISPA Wireless List: wireless@wispa.org >>> >>> Subscribe/Unsubscribe: >>> http://lists.wispa.org/mailman/listinfo/wireless >>> >>> Archives: http://lists.wispa.org/pipermail/wireless/ >>> >>> >>> -- >>> No virus found in this incoming message. >>> Checked by AVG. >>> Version: 7.5.552 / Virus Database: 270.10.2/1871 - Release Date: >>> 1/1/2009 >>> 5:01 PM >>> >>> >>> >> >> >> >> ---------------------------------------------------------------------------- >> ---- >> WISPA Wants You! Join today! >> http://signup.wispa.org/ >> ---------------------------------------------------------------------------- >> ---- >> >> WISPA Wireless List: wireless@wispa.org >> >> Subscribe/Unsubscribe: >> http://lists.wispa.org/mailman/listinfo/wireless >> >> Archives: http://lists.wispa.org/pipermail/wireless/ >> >> >> >> -------------------------------------------------------------------------------- >> WISPA Wants You! Join today! >> http://signup.wispa.org/ >> -------------------------------------------------------------------------------- >> >> WISPA Wireless List: wireless@wispa.org >> >> Subscribe/Unsubscribe: >> http://lists.wispa.org/mailman/listinfo/wireless >> >> Archives: http://lists.wispa.org/pipermail/wireless/ >> >> > > > -- > > John Vogel - jvo...@vogent.net > http://www.vogent.net 620-754-3907 > Vogel Enterprises LLC > Information Services Provider serving S.E. Kansas > > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: wireless@wispa.org > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: wireless@wispa.org > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > -- John Vogel - jvo...@vogent.net http://www.vogent.net 620-754-3907 Vogel Enterprises LLC Information Services Provider serving S.E. 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