Well, any metric can be sheep's wool, Tom.
EBITA comes to mind immediately. It isn't even an accounting standard.
But Wall St. likes it, even though no 2 companies calculate it the same
way. (It isn't a standard so they don't have to). As long as they
consistent calculate it the same way year after year.
ARPU on the same network can be a good indicator. If I have a MOTO
network and my ARPU is $99 and your MOTO network has $399. Unless you
have lots of overhead and pay high leases, you should be more profitable.
In the case of CLECs: when I see one that is focused, with a true target
market, selling a limited catalogue of services, with an ARPU upwards of
$600, I see a model CLEC. Considering most other CLECs have about 25k
customers after 10 years and a couple of acquisitions and have much
lower ARPU, there are lessons to be learned from the higher ARPU company.
Take DSL. Most ISPs have the same costs associated with it. Maybe one
pays more for IP or labor, but the telecom costs are the same (ATM & DSL
loops). So when I see one ISP with DSL ARPU at $100+ and another at
$50-60, who do you think is probably doing better?
Plus the less profitable customers you have, the better off you are.
It's not like you can make it up in volume, since growth and scale
actually eat at profit.
Profit in telecom is hardly ever talked about. It would scare away any
investors :)
- Peter
Tom DeReggi wrote:
Or they measure in ARPU to mask profitabilty. A higher ARPU subs is
not always more profitable.
Average ARPU also does not show retention rate.
Having an average ARPU of $700 buck does not do any good if they are
only a customer for 6 months, if they end up being disatisfied after
the fact.
Nor is a higher ARPU that much better if the world has to be given
away to get the $700 ARPU.
Getting an ARPU of $700 for a T1 speed line is pretty darn
impressive. But not neessarilly so, if 20mbps links need to be given
away to get it, meaning less growth possibilty. And a reoccurring
cost following the ARPU longer.
(Not that I'm saying high ARPU is not good.)
I think their are more important factors like,
Time till ROI?
Profit during that time, and anticipated profit per year after that
time (ROI).
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message ----- From: "Peter R." <[EMAIL PROTECTED]>
To: "WISPA General List" <wireless@wispa.org>
Sent: Tuesday, May 30, 2006 6:12 PM
Subject: Re: [WISPA] This is HUGE!
Because number of subs is the measuring stick.
Revenue is more important; but profit is the most important.
Not many can speak to profit, so they measure in subs.
- Peter
--
WISPA Wireless List: wireless@wispa.org
Subscribe/Unsubscribe:
http://lists.wispa.org/mailman/listinfo/wireless
Archives: http://lists.wispa.org/pipermail/wireless/
