Re: [WISPA] What are your customers worth?
The valuation of WISP user vs Cell user are a little funky. These numbers came off the top of my head and may not be anywhere near resembling reality. I am basing them on what I have made/lost in the WISP business in the past 5 years, and what I have spent/seen others spend on cell phone service for the past 10 years. Some of these numbers are purely speculative. . Typical wisp user revenue: $40/mo - $100/mo Typical wireless phone user revenue: $79/mo - $199/mo Typical install/CPE: take a $150-$200 loss on truck roll, CPE costs, labor, etc Typical cell phone sale/contract: make $100-$200 and give customer a free car charger than costs you $0.99 in bulk. NO TRUCK ROLLS Typical WISP customer problem: $50 truck roll + CPE replacement, cable re-run, POE replacement, 2 hr troubleshooting, etc Typical cell cust prob: sell them a new phone. Make $100, and make them come in to buy it. Typical WISP user cancellation: Pay a tech $50 to go by and uninstall the CPE Typical cell cancellation: CHARGE THEM $200/line to CANCEL Typical WISP customer install with bad credit: Be a nice guy, let them pay out the $200 install over 4 months, never collect anything but the first $50 and get screwed on the rest Typical cell with bad credt: Make them put down a $500 deposit, or get on a pay-as-you-go plan where they pay $0.20/min vs $0.05/min x 2000 min/mo. Typical WISP customer: unlimited email, unlimited downloads, unlimited uploads, unlimited P2P, unlimited complaining if a speed test ever shows 1/bit/sec slower than advertised speed. Typical cell user: $0.05/sms text message, $0.10/bit for downloading crap, $0.99/ea to download ringers. Drop the call/lose the ringer, etc. too bad.. try it again Typical WISP AP: rent the tower for $0-$500/mo and put up a $1000 AP for 40 to 100 subs Tower costs of $5/mo/sub roughly. Typical Cell tower: rent the land for $500/mo, build the tower/equipment for $90k, support 1000+ subs Amortize $90k for 10 years at $750/mo + interest, so the tower costs $12/mo/sub roughly. Now, with that said, do you want to buy a WISP, or do you want to buy a cell phone company? pd Blake Bowers wrote: Kind of rough to figure out what exactly they are paying per subscriber, the system may have a lot of revenue from other sources, such as co-locating. Put another cell carrier on the tower and you can add another 200K or more to the value of the tower. IE, if you have a cellular carrier on your tower, and want to sell, you can expect 8 -9 -10 times yearly revenue, or in some cases even more if you want to sell that tower. (Yep, I'm buying!) Even at the low end of valuation, with just 100 of their towers having a co-locator (And that is a low number for them) thats another 14.5 million dollars of value to Verizon. 15 to 25 percent of the total value of the deal may be coming from other income sources. - Original Message - From: John Scrivner [EMAIL PROTECTED] To: WISPA General List wireless@wispa.org Sent: Monday, July 30, 2007 4:10 PM Subject: [WISPA] What are your customers worth? This astounds me. Read the dollar amounts and customer counts below: Verizon agrees to buy Rural Cellular http://r.smartbrief.com/resp/hCfcixdgyzwWwZCibGluwtpU?format=standard Verizon Wireless is snapping up Rural Cellular in a deal valued at $2.67 billion. The deal will boost Verizon's subscriber numbers by more than 700,000. The Washington Post/Reuters A bit of quick math says that they are paying over $3,000.00 per customer for this company. Obviously WISPs are not able to command such valuations but it is interesting to see what the bigger guys will value top end wireless companies Scriv 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/
Re: [WISPA] What are your customers worth?
Those are some very good comparisons... if taken very lightly in the manner you intended... but to look at some real numbers... My local cell phone company just announced a $59/month unlimited minutes plan. You can then get unlimited SMS, web, pictures, etc. for like another $35/month if you want. $0 for the phone, 2 year contract, no setup fee. They are in debt with every new customer for at least the first few months (phone, sales commissions, overhead, etc.) In my current coverage area, we have a total of 60 towers. They have 105 towers in that same area. Mine each cost me less than $5k for everything, while they spend around $50k average per tower. Their tower techs (not climbers, just the techs) each have new trucks, and make $50k a year salary. My installers make $30k a year, and that is paid from the install fee we charge so they don't cost me anything. They have to use certified tower climbers that get paid $50/hour from the time they leave the office until they get back. We climb our own towers. Their main voice switch cost them almost $2 million about a year ago. My entire NOC (including hosting servers, routers, fiber, etc.) would cost me less than $100k to replace today. I have two offices... they have over 20 offices (not just agents or authorized dealers, actual offices owned by the corporation) with 10+ people in each office. This is just in my small corner of Idaho. So the real question is, are the cell phone companies _really_ making any money, or are they just going farther and farther into debt to produce a quarterly PL that looks good on paper? How do you spend $2 million on a switch that will have to be upgraded in 3-5 years? Oh, and let's not forget the part about being regulated by the FCC. Meaning quarterly reports, filings, hearings, negotiations with LEC's, etc. I'm happy in WISP land. :) Travis Microserv Pete Davis wrote: The valuation of WISP user vs Cell user are a little funky. These numbers came off the top of my head and may not be anywhere near resembling reality. I am basing them on what I have made/lost in the WISP business in the past 5 years, and what I have spent/seen others spend on cell phone service for the past 10 years. Some of these numbers are purely speculative. . Typical wisp user revenue: $40/mo - $100/mo Typical wireless phone user revenue: $79/mo - $199/mo Typical install/CPE: take a $150-$200 loss on truck roll, CPE costs, labor, etc Typical cell phone sale/contract: make $100-$200 and give customer a free car charger than costs you $0.99 in bulk. NO TRUCK ROLLS Typical WISP customer problem: $50 truck roll + CPE replacement, cable re-run, POE replacement, 2 hr troubleshooting, etc Typical cell cust prob: sell them a new phone. Make $100, and make them come in to buy it. Typical WISP user cancellation: Pay a tech $50 to go by and uninstall the CPE Typical cell cancellation: CHARGE THEM $200/line to CANCEL Typical WISP customer install with bad credit: Be a nice guy, let them pay out the $200 install over 4 months, never collect anything but the first $50 and get screwed on the rest Typical cell with bad credt: Make them put down a $500 deposit, or get on a pay-as-you-go plan where they pay $0.20/min vs $0.05/min x 2000 min/mo. Typical WISP customer: unlimited email, unlimited downloads, unlimited uploads, unlimited P2P, unlimited complaining if a speed test ever shows 1/bit/sec slower than advertised speed. Typical cell user: $0.05/sms text message, $0.10/bit for downloading crap, $0.99/ea to download ringers. Drop the call/lose the ringer, etc. too bad.. try it again Typical WISP AP: rent the tower for $0-$500/mo and put up a $1000 AP for 40 to 100 subs Tower costs of $5/mo/sub roughly. Typical Cell tower: rent the land for $500/mo, build the tower/equipment for $90k, support 1000+ subs Amortize $90k for 10 years at $750/mo + interest, so the tower costs $12/mo/sub roughly. Now, with that said, do you want to buy a WISP, or do you want to buy a cell phone company? pd Blake Bowers wrote: Kind of rough to figure out what exactly they are paying per subscriber, the system may have a lot of revenue from other sources, such as co-locating. Put another cell carrier on the tower and you can add another 200K or more to the value of the tower. IE, if you have a cellular carrier on your tower, and want to sell, you can expect 8 -9 -10 times yearly revenue, or in some cases even more if you want to sell that tower. (Yep, I'm buying!) Even at the low end of valuation, with just 100 of their towers having a co-locator (And that is a low number for them) thats another 14.5 million dollars of value to Verizon. 15 to 25 percent of the total value of the deal may be coming from other income sources. - Original Message - From: John Scrivner [EMAIL PROTECTED] To: WISPA General List wireless@wispa.org Sent: Monday, July 30, 2007 4:10 PM Subject: [WISPA] What are your customers
Re: [WISPA] What are your customers worth?
Very good point. I had only thought about the extra revenue from co-location, but your point is very valid. - Original Message - From: Mike Hammett [EMAIL PROTECTED] To: WISPA General List wireless@wispa.org Sent: Monday, July 30, 2007 5:10 PM Subject: Re: [WISPA] What are your customers worth? The reduced costs are big in cellular when you factor in roaming. They said in the article, they could have over $1B in savings due to roaming alone. That takes it down to under $2400 per customer. Say $50/month (I wish I only paid that!), that's a 4 year repayment. Not a bad long-term investment. rchives: http://lists.wispa.org/pipermail/wireless/ Would you like to see your advertisement here? Let the WISPA Board know your feelings about allowing advertisements on the free WISPA lists. The current Board is taking this under consideration at this time. We want to know your thoughts. -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
Re: [WISPA] What are your customers worth?
Kind of rough to figure out what exactly they are paying per subscriber, the system may have a lot of revenue from other sources, such as co-locating. Put another cell carrier on the tower and you can add another 200K or more to the value of the tower. IE, if you have a cellular carrier on your tower, and want to sell, you can expect 8 -9 -10 times yearly revenue, or in some cases even more if you want to sell that tower. (Yep, I'm buying!) Even at the low end of valuation, with just 100 of their towers having a co-locator (And that is a low number for them) thats another 14.5 million dollars of value to Verizon. 15 to 25 percent of the total value of the deal may be coming from other income sources. - Original Message - From: John Scrivner [EMAIL PROTECTED] To: WISPA General List wireless@wispa.org Sent: Monday, July 30, 2007 4:10 PM Subject: [WISPA] What are your customers worth? This astounds me. Read the dollar amounts and customer counts below: Verizon agrees to buy Rural Cellular http://r.smartbrief.com/resp/hCfcixdgyzwWwZCibGluwtpU?format=standard Verizon Wireless is snapping up Rural Cellular in a deal valued at $2.67 billion. The deal will boost Verizon's subscriber numbers by more than 700,000. The Washington Post/Reuters A bit of quick math says that they are paying over $3,000.00 per customer for this company. Obviously WISPs are not able to command such valuations but it is interesting to see what the bigger guys will value top end wireless companies Scriv Would you like to see your advertisement here? Let the WISPA Board know your feelings about allowing advertisements on the free WISPA lists. The current Board is taking this under consideration at this time. We want to know your thoughts. -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/ Would you like to see your advertisement here? Let the WISPA Board know your feelings about allowing advertisements on the free WISPA lists. The current Board is taking this under consideration at this time. We want to know your thoughts. -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
Re: [WISPA] What are your customers worth?
The reduced costs are big in cellular when you factor in roaming. They said in the article, they could have over $1B in savings due to roaming alone. That takes it down to under $2400 per customer. Say $50/month (I wish I only paid that!), that's a 4 year repayment. Not a bad long-term investment. - Mike Hammett Intelligent Computing Solutions http://www.ics-il.com - Original Message - From: John Scrivner [EMAIL PROTECTED] To: WISPA General List wireless@wispa.org Sent: Monday, July 30, 2007 4:10 PM Subject: [WISPA] What are your customers worth? This astounds me. Read the dollar amounts and customer counts below: Verizon agrees to buy Rural Cellular http://r.smartbrief.com/resp/hCfcixdgyzwWwZCibGluwtpU?format=standard Verizon Wireless is snapping up Rural Cellular in a deal valued at $2.67 billion. The deal will boost Verizon's subscriber numbers by more than 700,000. The Washington Post/Reuters A bit of quick math says that they are paying over $3,000.00 per customer for this company. Obviously WISPs are not able to command such valuations but it is interesting to see what the bigger guys will value top end wireless companies Scriv Would you like to see your advertisement here? Let the WISPA Board know your feelings about allowing advertisements on the free WISPA lists. The current Board is taking this under consideration at this time. We want to know your thoughts. -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/ Would you like to see your advertisement here? Let the WISPA Board know your feelings about allowing advertisements on the free WISPA lists. The current Board is taking this under consideration at this time. We want to know your thoughts. -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
