Yes, gross profit for a small operation may be pretty high, but it is that
bottom line that counts. Earnings as a percentage of gross revenue is the
gauge. >20% and you are probably OK. Easy to fool yourself in a small
operation. I still fool myself.
Depreciation may be a paper only expense but if you really run a tight ship,
you have a depreciation reserve account or sinking fund with enough cash in it
to actually replace the equipment when time comes.
Pontificating a bit, not commenting about anyone in particular here;
I have created 37 businesses so far in my life. I am almost to the point where
I have a pretty good eye for income statements and balance sheets. Perfect
financials are the best tool any business has.
Ignoring fundamentals is a good way to stay chained to a low performance
company. Like they say on shark tank, some businesses need to be taken out
behind the woodshed and shot.
From: Ken Hohhof
Sent: Sunday, November 17, 2019 9:00 AM
To: 'AnimalFarm Microwave Users Group'
Subject: Re: [AFMUG] tired of entitled streamers
I think that’s a mistake WISPs often make, assuming you can apply 100% of
revenue to paying off equipment cost.
There’s labor, FCC licensing, insurance, bandwidth costs, tower rent, power,
equipment maintenance, G&A costs, and the cost of capital to buy that equipment
upfront. And we find ourselves replacing or upgrading equipment every 3-5
years, and there’s always the threat of subsidized overbuilding. So yeah, you
want to see a quick payback.
As a rule of thumb I usually use 50% of revenue in payback calculations.
Also, I don’t recall saying my customers have nowhere else to go.
From: AF <af-boun...@af.afmug.com> On Behalf Of Matt Hoppes
Sent: Sunday, November 17, 2019 9:48 AM
To: AnimalFarm Microwave Users Group <af@af.afmug.com>
Subject: Re: [AFMUG] tired of entitled streamers
We also have started feeding micro sites with licensed links.
A Ubiquiti 11ghz link runs about $5,000. Even over 10 subscribers that’s only
$500/subscriber or a break even on equipment after about a year if you are
charging $50 or more a month for service.
We have micro sites where I’ve got:
$5,000 in backhaul
$2,500 in utility pole and power
$5,000 in access equipment
To service 10-15 homes
I still break even in a year or just slightly longer and am providing 50
megabit service.
The 3ghz fed by licensed link sounds like an awesome money maker. But it will
take a year until you see it.
You have to have a running sheet of amortizations and expenses and plan.
You just said earlier: your customers have nowhere else to go to. Why not
provide excellent service at a reasonable cost?
On Nov 17, 2019, at 10:25 AM, Ken Hohhof <af...@kwisp.com> wrote:
If that’s all it costs you, kudos.
But we’re running out of spectrum at many towers (there are other WISPs
throughout our service area), plus we also have to add backhaul capacity, and
all that uses power so we need more batteries. We’re having to run backhauls
in licensed spectrum, even to micropops. And we’re having to add “small cells”
to get closer to customers. Because with all the streaming we can’t have
customers at low modulations, and to reach those customers who move to a low
spot surrounded by trees, and to deal with spectrum exhaustion. All this costs
a lot more than $300.
We have 3.65GHz sites fed via 11 GHz with 10 subscribers. The only way that
makes money is averaging over all our sites. And still we can’t build enough
micropops to get LOS to everyone who chooses to live down by a creek surrounded
by trees. Yesterday I checked photos from 3 of our towers to a prospective
customer and the only thing we could see was a little of the peak of a 40 ft
barn with big gaping holes in the roof that would be unsafe to walk on, and
that was on an old micropop where we’re out of backhaul capacity to sell 20+
Mbps speeds (it’s actually fed via an SM from another tower, something we don’t
do anymore). They apparently bought the house from an elderly couple, at their
previous house they had gigabit Metronet fiber. Well, that was pretty sweet,
maybe you shouldn’t have moved.
Honestly, I think the only real, long-term solution to rural broadband is
FTTH. The problem of course is money. And with several companies launching
thousands of LEO satellites promising broadband for everyone, I think that will
suppress even further any large investments in rural broadband. Investors
would also have to weigh how serious the mobile carriers are about rural fixed
wireless, is it just marketing hype and lobbying to regulators as it has been
in the past?
I do find it ironic that we have low flush toilets, energy efficient
appliances, LED light bulbs, alternate day lawn watering, and mandated fuel
efficiency for vehicles, yet conspicuous consumption of Internet bandwidth
seems to be our patriotic duty. With all the content moving to streaming
services like Disney+ and content being priced high to cable companies but
disruptively low for streaming, it’s clear there won’t be a choice, traditional
broadcast and cable TV is dying and everyone will have to get their TV via the
Internet. It’s like having to get a cellphone because there aren’t any
payphones anymore, the train is leaving and you either buy a ticket or get left
behind. For awhile though, people do have a choice, you can still put up a TV
antenna or get satellite TV. It’s becoming 500 channels of crap though.
Still, if you have gigabit fiber where you live now, maybe don’t move to
Green Acres unless you really like doing country stuff. Or at least cut down
some of the damn trees. Sheesh, miles and miles of open fields, and then 75
foot trees all around your house.
From: AF <af-boun...@af.afmug.com> On Behalf Of Matt Hoppes
Sent: Sunday, November 17, 2019 8:43 AM
To: AnimalFarm Microwave Users Group <af@af.afmug.com>
Subject: Re: [AFMUG] tired of entitled streamers
I get that. But my point is - if this is truly a rural environment it costs
maybe $300 to add another access point for capacity.
I just don’t see the point in penalizing customers when the cost to add
capacity is so low.
On Nov 17, 2019, at 8:55 AM, Adam Moffett <dmmoff...@gmail.com> wrote:
I would say it more nicely, but IMO there's a very valid point here.
Having been at both a 100% rural WISP and an urban WISP running side by side
with cable I can say that it's less stressful for you if the unsatisfied
customers have a real option to leave. It forces you to stay on top of your
game, but also allows a pressure valve to release the customers you can never
satisfy. And wouldn't we all like to have only the low to median usage and
non-complaining customers? I don't see anything wrong with trying to
strategically dis-incentivize the ones you don't want.
In Darin's shoes the thing I'd try to remember is that the GB values are
going to be a moving target trending ever upwards. You'll have to evaluate and
probably raise those GB allowances every year to keep the median customers
satisfied and maintain that balance.
-Adam
On 11/16/2019 3:07 PM, Darin Steffl wrote:
Matt,
You can simply go away. We have competitor wisp's and many have poor
reviews. We simply do it best and have the highest Facebook ratings of any ISP.
We simply want to make heavy users pay more. Why should we raise prices
for all customers when only a small percentage are the ones driving us to
upgrade things? I'll take 5 average customers at 200gb per month over one
customer using 1TB.
You may be a tech guy but not understand business very well. The point of
this is to drive away bad customers and keep good ones. Good customers will not
be penalized with these plans. Fewer customers with the same amount of revenue
means higher profit, plain and simple.
On Sat, Nov 16, 2019, 1:52 PM Matt Hoppes
<mattli...@rivervalleyinternet.net> wrote:
Wow. Yikes. If I was in your area you’d be driving me to start a
competing ISP with you.
You’ll drive your users away.
Seriously. It doesn’t cost that much to upgrade a tower or backhaul to
support more capacity.
On Nov 16, 2019, at 2:18 PM, Darin Steffl <darin.ste...@mnwifi.com>
wrote:
We're moving away from "truly unlimited" plans and going to unlimited
with X amount of high-speed data between noon and midnight.
For example, we'll have plans with high-speed data amounts of 65,
300, 600, 900, 1200, 1800GB a month with that data only being counted 12 hours
each day. Outside noon to midnight, the data will not count to encourage them
to shift large downloads to our off peak times. If they insist on streaming on
4 devices during peak and using 100GB per day like some homes, their bill will
be well over $250 a month. Here is our rural pricing for these proposed plans.
Once they hit their threshold, they slow down to 1 mbps. We will never have
overage charges so they're in full control of their cost. Either they lower
their usage or pay more to continue the high usage.
What I call abusive usage continues to increase and I feel we need to
have plans like these to make heavy users pay for the cost of us upgrading our
gear earlier than planned for. These plans are also still way better than any
satellite plan in terms of caps and latency.
35 Meg/65GB - $65
25 Meg/300GB - $90 35 Meg/600GB - $110
45 Meg/900GB - $130
55 Meg/1,200GB - $150
55-100 Meg/1,800GB - $200
On Sat, Nov 16, 2019, 11:50 AM Nate Burke <n...@blastcomm.com> wrote:
Give them what you sell them. If they call in more than 3 times
complaining then say 'you obviously can't provide them the experience they're
expecting, and that you'll be out in a few days to remove the equipment.' That
should either silence them, or push them to hughesnet and they can see what
being rural really means.
On 11/16/2019 11:31 AM, Ken Hohhof wrote:
Anybody else losing their patience with streamers?
The people who just moved from somewhere they had gigabit fiber
to the middle of nowhere in a low spot surrounded by tons of trees, and say
they stream all their TV on 3-4 screens at the same time.
I want to yell at them, if you had affordable blazing fast
Internet, and it’s that important to you, why did you move? And if you had to
move, why didn’t you move to a nice suburb with fiber or at least cable? And
why do you have to stream everything? You could get satellite TV. Yes, it’s
expensive, get over it. You could put up a TV antenna. You could get DVDs by
mail. Or if moving to the country was so important, you could go out on the
ATV or horse or snowmobile, or go hunting, or feed the chickens and mini goats.
If they’re streaming all the time, I have to suspect the reason for moving to
Green Acres was to save on property taxes, and the reason for streaming is to
avoid paying $200/month to DirecTV or DISH.
It’s gotten so bad, a significant number of prospective
customers say they only want Internet to stream, anything else they can do on
their phone. And when a streaming subscription is sub $10 (or free with Amazon
Prime), they’re thinking Internet is like shipping, it shouldn’t cost more than
the item being delivered.
I know, “OK boomer”.
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