Re: [WISPA] CPE - who buys it?
I do #1 now. I'd imagine if I had more growth, I'd do #2. I have other things limiting my growth at this time. - Mike Hammett Intelligent Computing Solutions http://www.ics-il.com -- From: Chuck Hogg ch...@shelbybb.com Sent: Sunday, November 08, 2009 9:35 PM To: WISPA General List wireless@wispa.org Subject: Re: [WISPA] CPE - who buys it? Let me ask you this though... Would you rather 1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ --- - 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/ WISPA Wants You! Join today! http://signup.wispa.org
Re: [WISPA] CPE - who buys it?
give some flexibilty to the business owner on how they account for their business. Its not always black and white. So to answer your question. Do you pay tax on every screw and Bolt? Well, that depends on how you postiion your claim. If it were me, I would not not record it as property. I'd argue that all hardware (mounts, counduit, cable, bolts) become property of the building or home owner in which it is installed into. I can back this up with some of my contracts, that state the Conduit and Masts becomes property of the building owner, and should not be removed to preserve structural integrity of the building walls. Thus an argued expense, not an asset of mine anymore. Which will allow me to deduct full cost of the item year it was purchased. You could also argue, what about gifts to customers? For example, maybe you did not sell CPE to the end user, and just give a all incompassed install fee, but maybe your contract says that after one year of service, that CPE becomes the property of the home owner? Meaning, they had to fullfil a 1 year term before they paid enough to gain ownership of such. In that case it could be argued that the ISP pays Property tax on 1/4 the property value (depreciation class of 4 years) for that item for one year, but thereafter not pay tax, because ownership transfers to the customer. For me what it boils down to is, what do I have the ability to easily track, and what is the return on investment to attempt to reduce over-taxations and have more accuracy? If someone would only save $500 in PPT by recording exact details related in accurate taxation, it might not be worth doing it, if it had a $3000 cost to perform that tracking. Sometimes you say, its an insignificant amount, and not worth worrying about, and not likely any auditor or county official would ever worry about it either. it can be hard to track what is owed in Property Tax in accounting systems, because tracking for Income and financial statements might be different than needs of Property Tax, so I track my property for Property tax seperately in a spreadsheet. I wonder how larger companies deal with this, but I assume as companies grow larger, they probably have to work with a set of assumption to better automate their tracking. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband - Original Message - From: RickG rgunder...@gmail.com To: WISPA General List wireless@wispa.org Sent: Tuesday, November 10, 2009 11:12 PM Subject: Re: [WISPA] CPE - who buys it? Tom, Your reply is the the info I was looking for. Thanks for your reply. I do believe you are correct but I'll double-check with my county and CPA. I've moved so many times around the country that I cant keep up! Just a note, we have been paying our property taxes by default because of our lessor passes it on to us. The reason I'm inquiring is in preparation for when our lease is paid off (early next year). With that said, I have an additional question: Do you pay property taxes on every screw, nut, bolt? -RickG On Tue, Nov 10, 2009 at 1:36 PM, Tom DeReggi wirelessn...@rapiddsl.netwrote: Rick, No your assumption is not true. Property Tax is applied on property. When you buy radio CPE it shows up on your financials as property, and if you TAX DEDUCT the cost of the CPE, which I sure hope you do for your benefit, you have claimed those purchases as property. A Auditor isn;t going to go look for a single small purchase. But I assure you CPEs, a line item which adds up to be a huge inaggregate cost, they will immediately see that property and recognize whether that property was declared, and property tax properly paid on it or not. As a matter of fact some counties will check you federal returns, to find your claimed deductions and depreciations, and automatically assess your property tax based on your Federal Tax Returns. SO IF your county charges Property Tax then your CPEs are TAXABLE PROPERTY UNLESS your county specifically has passsed a law to excemption radio equipment. Loudon County Virgina is one specific County that made Wireless CPE exempt from property tax to foster local investment in Broadband. I wish more counties were as insightful, because it was a very effective program. Property Tax is NOT just for large real estate. Its paid on EVERY TANGIBLE ASSET you own. That include an office chair, a computer, a telephone, a router, a CPE, what ever it is that you own. Mike, Just because nobody has been commming around asking for Property Tax on CPE does not make it not owed. Property Tax is self claimed, so the government doesn't know you have that property until they decide to audit you, or you tell them. But why do you pay any tax of any kind at all? After all, if you aren't audited you wont have to pay it? Because you know when you are audited, you'll be in big trouble if you didn't. The same applied
Re: [WISPA] CPE - who buys it?
Tom, great post! My responses inline below with your replies truncated for the clarity of this thread. On Wed, Nov 11, 2009 at 1:52 PM, Tom DeReggi wirelessn...@rapiddsl.netwrote: You only owe property tax on property that YOU own, until the time it is depreciated, and its paid the the State/County that the property is located in. So if you lease equipment or property, you are not obligated by law (Tax code) to pay property tax on the leased equipment. However, if you agreed under contract to pay your leassor's property tax, then that obligates you to pay the Leasor. (Note difference between Fair Market Value Lease and Lease to Own Lease which may have differences in law on whether the leased property is owned by the leasor or leasee for Property Tax purposes. That question I'll leave to your Accountant) Correct. I currently have a Fair Market Value lease and it requires me to pay the property taxes. There are Expenses, Cost of Goods, and then there are Assets. You as the business owner claim what purchases are COGS, expenses and assets, in line with Generally Accepted Accounting Practices. So, in your books, are you recording a Nut/bolt as an asset, expense, or COGS?... + So to answer your question. Do you pay tax on every screw and Bolt? Again, the reason for this post is to explore options if any. In business, it seems taxes control much of what we do. Therefore, I wonder if it makes sense to expense the radio like a screw bolt, if possible? Alternatively, maybe its better if you sell it to the customer or even give it away. it can be hard to track what is owed in Property Tax in accounting systems, because tracking for Income and financial statements might be different than needs of Property Tax, so I track my property for Property tax seperately in a spreadsheet. I wonder how larger companies deal with this, but I assume as companies grow larger, they probably have to work with a set of assumption to better automate their tracking. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband Another great question. Maybe that's why the satellite television companies give the equipment away? Thanks! -RickG 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] CPE - who buys it?
classified my products as computer related products which are allowed to be depreceiated over 3 years. Section 179 items, also get property taxed based on their equivellent of would have been depreciable life. My county ruled that my CPE equipment was telecommunication and radio like equipment which had to be depreciated over 4 years instead. So to accurately report, you'd have to calcualte tax on Nut and Bolts different than Radio CPE. I can pose another question, what if one took our a RUS loan, and was allowed to state the useful life of 11 years (which has been allowed), would that changed the length of period in which that item would be subject to property tax? Again, a question for the accountant. So this all boils down to, what you have to pay is based on YOUR RECORDS. You must provide accurate records with adequate justification for your rational on file. The Acccounting code does give some flexibilty to the business owner on how they account for their business. Its not always black and white. So to answer your question. Do you pay tax on every screw and Bolt? Well, that depends on how you postiion your claim. If it were me, I would not not record it as property. I'd argue that all hardware (mounts, counduit, cable, bolts) become property of the building or home owner in which it is installed into. I can back this up with some of my contracts, that state the Conduit and Masts becomes property of the building owner, and should not be removed to preserve structural integrity of the building walls. Thus an argued expense, not an asset of mine anymore. Which will allow me to deduct full cost of the item year it was purchased. You could also argue, what about gifts to customers? For example, maybe you did not sell CPE to the end user, and just give a all incompassed install fee, but maybe your contract says that after one year of service, that CPE becomes the property of the home owner? Meaning, they had to fullfil a 1 year term before they paid enough to gain ownership of such. In that case it could be argued that the ISP pays Property tax on 1/4 the property value (depreciation class of 4 years) for that item for one year, but thereafter not pay tax, because ownership transfers to the customer. For me what it boils down to is, what do I have the ability to easily track, and what is the return on investment to attempt to reduce over-taxations and have more accuracy? If someone would only save $500 in PPT by recording exact details related in accurate taxation, it might not be worth doing it, if it had a $3000 cost to perform that tracking. Sometimes you say, its an insignificant amount, and not worth worrying about, and not likely any auditor or county official would ever worry about it either. it can be hard to track what is owed in Property Tax in accounting systems, because tracking for Income and financial statements might be different than needs of Property Tax, so I track my property for Property tax seperately in a spreadsheet. I wonder how larger companies deal with this, but I assume as companies grow larger, they probably have to work with a set of assumption to better automate their tracking. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband - Original Message - From: RickG rgunder...@gmail.com To: WISPA General List wireless@wispa.org Sent: Tuesday, November 10, 2009 11:12 PM Subject: Re: [WISPA] CPE - who buys it? Tom, Your reply is the the info I was looking for. Thanks for your reply. I do believe you are correct but I'll double-check with my county and CPA. I've moved so many times around the country that I cant keep up! Just a note, we have been paying our property taxes by default because of our lessor passes it on to us. The reason I'm inquiring is in preparation for when our lease is paid off (early next year). With that said, I have an additional question: Do you pay property taxes on every screw, nut, bolt? -RickG On Tue, Nov 10, 2009 at 1:36 PM, Tom DeReggi wirelessn...@rapiddsl.netwrote: Rick, No your assumption is not true. Property Tax is applied on property. When you buy radio CPE it shows up on your financials as property, and if you TAX DEDUCT the cost of the CPE, which I sure hope you do for your benefit, you have claimed those purchases as property. A Auditor isn;t going to go look for a single small purchase. But I assure you CPEs, a line item which adds up to be a huge inaggregate cost, they will immediately see that property and recognize whether that property was declared, and property tax properly paid on it or not. As a matter of fact some counties will check you federal returns, to find your claimed deductions and depreciations, and automatically assess your property tax based on your Federal Tax Returns. SO IF your county charges Property Tax then your CPEs are TAXABLE
Re: [WISPA] CPE - who buys it?
companies invest in Broadband, but they were first in line to ask for $130 million in Federal grants to help pay for Broadband. In Summary, PPT was a big problem for me when I OVER PAID my PPtaxes, and the County actually owed me money. Just think how hard Tax Collectors will come after you if they learn you have not paid anything at all, and possibly guilty of Tax evading? If you haven;t paid to date, I wouldn;t recommend going back in time and bringing it up. But I'd highly recommend that you start reporting your current year property purchases, and establishing a method to track what would be owed on an on going basis. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband - Original Message - From: RickG rgunder...@gmail.com To: WISPA General List wireless@wispa.org Sent: Monday, November 09, 2009 10:58 PM Subject: Re: [WISPA] CPE - who buys it? Also note that many leases pass the property taxes on to leasee, so you may not escape it that way either. But, that takes me to another question (more likely for my CPA). Doesnt property taxes only apply to higher dollar items that are usually on a depreciation scheule? In other words, if you are expensing CPE straight off the books, then property tax does not apply? -RickG On Mon, Nov 9, 2009 at 4:32 PM, Tom DeReggi wirelessn...@rapiddsl.netwrote: It should be noted that if you buy CPE and keep ownership of CPE, you are likely open to pay Property Tax on it. In MD that equates to about 3% x 4 years. As well if you own it, it is not covered by the customer's home owner insurance if stolen or damaged by weather or other acts of god. (Not that Customers often are willing to claim it.) Having the customer own it, reduces a WISP's assets. Some lease types solve that problem, simply turning CPE into an expense. After the three years, if you bought it from the Leasor, you could list it on your books at depreciated value (near nothing) tax free, and could also list it on your balance sheeet, showing the retail value and depreceiated value, as an Asset that still has a perceived value, even if depreciated. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband 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/ 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] CPE - who buys it?
Quick Clarification As far as I know Personal Property Tax is a County Tax, and taxation is under the jurisdiction of the County Code, so its possible some states or Counties might not have a Personal Property Tax on anything. However, in our case the State collect Property Tax on behalf of the Counties. Many Counties get the majority of their income from Property Tax. With the Housing market crash, and falling property values, Counties have lost a huge percentage of their income, and usually in somewhat of a budget crisis because of it. For this reason it very possible that they might have their auditors look harder to areas other than Real Estate, to look for unreported taxable property. Just something to be concious about. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband - Original Message - From: Tom DeReggi wirelessn...@rapiddsl.net To: WISPA General List wireless@wispa.org Sent: Tuesday, November 10, 2009 1:36 PM Subject: Re: [WISPA] CPE - who buys it? Rick, No your assumption is not true. Property Tax is applied on property. When you buy radio CPE it shows up on your financials as property, and if you TAX DEDUCT the cost of the CPE, which I sure hope you do for your benefit, you have claimed those purchases as property. A Auditor isn;t going to go look for a single small purchase. But I assure you CPEs, a line item which adds up to be a huge inaggregate cost, they will immediately see that property and recognize whether that property was declared, and property tax properly paid on it or not. As a matter of fact some counties will check you federal returns, to find your claimed deductions and depreciations, and automatically assess your property tax based on your Federal Tax Returns. SO IF your county charges Property Tax then your CPEs are TAXABLE PROPERTY UNLESS your county specifically has passsed a law to excemption radio equipment. Loudon County Virgina is one specific County that made Wireless CPE exempt from property tax to foster local investment in Broadband. I wish more counties were as insightful, because it was a very effective program. Property Tax is NOT just for large real estate. Its paid on EVERY TANGIBLE ASSET you own. That include an office chair, a computer, a telephone, a router, a CPE, what ever it is that you own. Mike, Just because nobody has been commming around asking for Property Tax on CPE does not make it not owed. Property Tax is self claimed, so the government doesn't know you have that property until they decide to audit you, or you tell them. But why do you pay any tax of any kind at all? After all, if you aren't audited you wont have to pay it? Because you know when you are audited, you'll be in big trouble if you didn't. The same applied to Property Tax. The burden is on the Property Owner to know the law and properly report Tax, or it is illegal TAX Evading, if the owner does not report it. Yes, I've fully qualified the above with attorneys and accountants. I learned this the hard way. I originally over paid my property taxes, because I didn't know the laws. When I learned I over paid, I stopped reporting and paying Property tax. I got audited by the county, and they decided to estimate my Property Tax based on data reported on my income tax returns, which was about 10 times more than I actually owed. The way it work is, you pay everything the government claims, and then if you protest the amounts and win, they'll send you a refund. I made the mistake of fighting the process, and when I didn't pay the wrong amounts, they simply immediately cancelled my corporate status, reported it to credit agencies, and made it impossible for me to get a LOAN for over 1.5 years. I couldn't even renew my ARIN IP, until I got it cleared up. The reason you report Property Tax on CPE is so you can report the correct amounts. The government does not have access to the fact to assess a correct amount and will always grossly over estimate. You should also include a letter explaining anything that might look odd. This is the thing Property Tax is paid to the State that the property is located and installed in. So if you are a Pennsylvania business, and buy equipment from California, and install the CPE into Maryland, you pay Property Tax on that CPE to Maryland. The problem here is that most WISPs dont track where they will install a CPE at the time they buy bulk CPE, so there is usually not a good record of where to pay tax to. SO... IF you buy 100 CPEs and Pay Tax on 100 CPEs to your State, and then isntall 30 of those CPEs in another State, you owe that second State Property Tax for 30 CPEs. This means that you are at risk of paying Tax TWICE, if you do not properly track where property resides and break tax payments down appropriately to match. This is one of the reasons I am against tracking an ISP's end user
Re: [WISPA] CPE - who buys it?
investment. If you cant find one, Contact your County and point them to the fine example that Loudon County Virginia has made to help make their County one of the most advanced Broadband Counties in the Country, and ask them to follow in their foot steps. It was funny, when I contacted my County about Property Tax and that I'd likely be applying for a BTOP grant bringing in a large amount of new property, the first thing they saw was Dollar signs, and it was inferred they had no intentions of waiving the Property Tax. I found it extremely hippocritical, that they'd not waive property tax to help private companies invest in Broadband, but they were first in line to ask for $130 million in Federal grants to help pay for Broadband. In Summary, PPT was a big problem for me when I OVER PAID my PPtaxes, and the County actually owed me money. Just think how hard Tax Collectors will come after you if they learn you have not paid anything at all, and possibly guilty of Tax evading? If you haven;t paid to date, I wouldn;t recommend going back in time and bringing it up. But I'd highly recommend that you start reporting your current year property purchases, and establishing a method to track what would be owed on an on going basis. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband - Original Message - From: RickG rgunder...@gmail.com To: WISPA General List wireless@wispa.org Sent: Monday, November 09, 2009 10:58 PM Subject: Re: [WISPA] CPE - who buys it? Also note that many leases pass the property taxes on to leasee, so you may not escape it that way either. But, that takes me to another question (more likely for my CPA). Doesnt property taxes only apply to higher dollar items that are usually on a depreciation scheule? In other words, if you are expensing CPE straight off the books, then property tax does not apply? -RickG On Mon, Nov 9, 2009 at 4:32 PM, Tom DeReggi wirelessn...@rapiddsl.netwrote: It should be noted that if you buy CPE and keep ownership of CPE, you are likely open to pay Property Tax on it. In MD that equates to about 3% x 4 years. As well if you own it, it is not covered by the customer's home owner insurance if stolen or damaged by weather or other acts of god. (Not that Customers often are willing to claim it.) Having the customer own it, reduces a WISP's assets. Some lease types solve that problem, simply turning CPE into an expense. After the three years, if you bought it from the Leasor, you could list it on your books at depreciated value (near nothing) tax free, and could also list it on your balance sheeet, showing the retail value and depreceiated value, as an Asset that still has a perceived value, even if depreciated. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband 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/ 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/
Re: [WISPA] CPE - who buys it?
Good points... 1. Economy can go bad, and you could end up with a negative cash flow, however this is a lease over 12 months, your subs are putting $20 into your pocket, and $30 to pay a lease. We make people pay $150 for a 2 yr contract, $175 for a 1yr contract, $200 for no contract. This pays for the labor and potential early cancelation. From the start, you are making money. The 100 subs at $150 an install bring in an additional $15,000 in revenue. We would need 2 - 2 person crews (at $12.50/hr) to do 100 installs, which is roughly $8,000 in labor. That put's $7,000 into your pocket to build out. 2. Fork lift upgrade - Let's hope you aren't fork lift upgrading within 12 months... 3. Mass storm = Insurance Claim. Now, I'm not reaching this model 100%, but I am having troubles finding issues with this gameplan. I have found a few leasing companies that will lease to us at 3-5%. It just kind of makes sense at this rate, while at 5-10% I would question it, and at 10-20% (Agility) I probably would stay away from it. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 11:48 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Normally, I'd choose door #2. In addition, the lease payment is full tax deduction. I like many aspects of leasing. But, you better have a good business plan because if you lose subs or service pricing goes down you could be caught in an negative cash flow very quickly. Also, what if you need to forklift upgrade before the lease is up? Or you have a mass amount of equipment go bad because of something like a lightning storm? Depending on where things are with the company and the economy debt free may be best at the time. Not arguing, just asking :) -RickG On Sun, Nov 8, 2009 at 10:35 PM, Chuck Hogg ch...@shelbybb.com wrote: Let me ask you this though... Would you rather 1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG WISPA Wants You! Join today! http://signup.wispa.org
Re: [WISPA] CPE - who buys it?
We own the CPE radio in 95% of our installs and the router in probably 80%. Nobody wants finger pointing when things stop working. If we think it's the CPE causing an outage, we just replace it no questions asked, no fussing over who's fault it or coordinating amongst the customer and their hired techs. Our customers can replace our routers with their own or specify they don't need a router, but we can only provide the settings they need and it limits the extent of the tech support we can provide if we can't ping their router, etc... For instance if a customer has voip with us and uses our provided router, we can log into the router remotely, setup a port forward, login into their ATA if needed. We have a few seasonal customers that chose to own their own radio so they wouldn't have an off-season fee to pay. They bought them from us, we configured and installed them just like any other customer's radio. If the radio dies, they can either pony up for a new one, or sign a new contract with us where we own the radio, and we typically try to upgrade them to a newer technology if one is available. If they upgrade or leave, we let them know their purchased radio is useless unless they bring it for a factory reset or let us reset it remotely before they take it down. If someone wants WIFI AP in their house, we encourage them to do it without us. We did it for a while, and tech support is a nightmare with all the laptop drivers and different wifi products, coverage problems, OS problems, etc... Customers can not differentiate between less than ideal internal wifi and their wireless broadband fixed service. On Sun, Nov 08, 2009 at 03:24:27PM -0500, RickG wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ -- /* Jason Philbrook | Midcoast Internet Solutions - Wireless and DSL KB1IOJ| Broadband Internet Access, Dialup, and Hosting http://f64.nu/ | for Midcoast Mainehttp://www.midcoast.com/ */ 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] CPE - who buys it?
1. Wow, 12 months! Now thats a winner! 2. While probably not a forklift upgrade, I can see a major upgrade coming in 2010. 3. If it was really bad, I'd claim it on insurance but I woudl hate to because your rates will go up. I'm more concerned lightning strikes that take out a few dozen every few weeks during spring/summer. I'm sure others will chime in with good thoughts... -RickG On Mon, Nov 9, 2009 at 8:37 AM, Chuck Hogg ch...@shelbybb.com wrote: Good points... 1. Economy can go bad, and you could end up with a negative cash flow, however this is a lease over 12 months, your subs are putting $20 into your pocket, and $30 to pay a lease. We make people pay $150 for a 2 yr contract, $175 for a 1yr contract, $200 for no contract. This pays for the labor and potential early cancelation. From the start, you are making money. The 100 subs at $150 an install bring in an additional $15,000 in revenue. We would need 2 - 2 person crews (at $12.50/hr) to do 100 installs, which is roughly $8,000 in labor. That put's $7,000 into your pocket to build out. 2. Fork lift upgrade - Let's hope you aren't fork lift upgrading within 12 months... 3. Mass storm = Insurance Claim. Now, I'm not reaching this model 100%, but I am having troubles finding issues with this gameplan. I have found a few leasing companies that will lease to us at 3-5%. It just kind of makes sense at this rate, while at 5-10% I would question it, and at 10-20% (Agility) I probably would stay away from it. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 11:48 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Normally, I'd choose door #2. In addition, the lease payment is full tax deduction. I like many aspects of leasing. But, you better have a good business plan because if you lose subs or service pricing goes down you could be caught in an negative cash flow very quickly. Also, what if you need to forklift upgrade before the lease is up? Or you have a mass amount of equipment go bad because of something like a lightning storm? Depending on where things are with the company and the economy debt free may be best at the time. Not arguing, just asking :) -RickG On Sun, Nov 8, 2009 at 10:35 PM, Chuck Hogg ch...@shelbybb.com wrote: Let me ask you this though... Would you rather 1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards
Re: [WISPA] CPE - who buys it?
It should be noted that if you buy CPE and keep ownership of CPE, you are likely open to pay Property Tax on it. In MD that equates to about 3% x 4 years. As well if you own it, it is not covered by the customer's home owner insurance if stolen or damaged by weather or other acts of god. (Not that Customers often are willing to claim it.) Having the customer own it, reduces a WISP's assets. Some lease types solve that problem, simply turning CPE into an expense. After the three years, if you bought it from the Leasor, you could list it on your books at depreciated value (near nothing) tax free, and could also list it on your balance sheeet, showing the retail value and depreceiated value, as an Asset that still has a perceived value, even if depreciated. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband 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] CPE - who buys it?
Also note that many leases pass the property taxes on to leasee, so you may not escape it that way either. But, that takes me to another question (more likely for my CPA). Doesnt property taxes only apply to higher dollar items that are usually on a depreciation scheule? In other words, if you are expensing CPE straight off the books, then property tax does not apply? -RickG On Mon, Nov 9, 2009 at 4:32 PM, Tom DeReggi wirelessn...@rapiddsl.netwrote: It should be noted that if you buy CPE and keep ownership of CPE, you are likely open to pay Property Tax on it. In MD that equates to about 3% x 4 years. As well if you own it, it is not covered by the customer's home owner insurance if stolen or damaged by weather or other acts of god. (Not that Customers often are willing to claim it.) Having the customer own it, reduces a WISP's assets. Some lease types solve that problem, simply turning CPE into an expense. After the three years, if you bought it from the Leasor, you could list it on your books at depreciated value (near nothing) tax free, and could also list it on your balance sheeet, showing the retail value and depreceiated value, as an Asset that still has a perceived value, even if depreciated. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband 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/
Re: [WISPA] CPE - who buys it?
Rick: Maybe rural existence has its advantages; I've never been taxed by the county on anything but towers. And I'm not asking any questions either! Mike At 09:58 PM 11/9/2009, you wrote: Also note that many leases pass the property taxes on to leasee, so you may not escape it that way either. But, that takes me to another question (more likely for my CPA). Doesnt property taxes only apply to higher dollar items that are usually on a depreciation scheule? In other words, if you are expensing CPE straight off the books, then property tax does not apply? -RickG On Mon, Nov 9, 2009 at 4:32 PM, Tom DeReggi wirelessn...@rapiddsl.netwrote: It should be noted that if you buy CPE and keep ownership of CPE, you are likely open to pay Property Tax on it. In MD that equates to about 3% x 4 years. As well if you own it, it is not covered by the customer's home owner insurance if stolen or damaged by weather or other acts of god. (Not that Customers often are willing to claim it.) Having the customer own it, reduces a WISP's assets. Some lease types solve that problem, simply turning CPE into an expense. After the three years, if you bought it from the Leasor, you could list it on your books at depreciated value (near nothing) tax free, and could also list it on your balance sheeet, showing the retail value and depreceiated value, as an Asset that still has a perceived value, even if depreciated. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband 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/ 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] CPE - who buys it?
Only drawback I've seen to them buying it is that if you have confidential configuration information in it, and the customer demands access to it since they bought it On Sun, Nov 8, 2009 at 1:24 PM, RickG rgunder...@gmail.com wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/
Re: [WISPA] CPE - who buys it?
Hello, Do not sell it to them, just charge a higher setup fee. Thanks -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 2:24 PM To: WISPA General List Subject: [WISPA] CPE - who buys it? I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/
Re: [WISPA] CPE - who buys it?
You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/
Re: [WISPA] CPE - who buys it?
I made a decision when I founded this company that I wouldn't keep CPE on the books. I extract a capital fee on day one for the REAL cost of CPE and cabling, mount et al. I maintain ownership. It's like joining a health club; you pay an initiation fee. When you quit, you don't get to take the universal gym home with you. They comprehend this ideology and play along. I usually get them to sign a 2 year contract by telling them I can't raise their rates for 24 months. MIke At 02:24 PM 11/8/2009, you wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/
Re: [WISPA] CPE - who buys it?
We sell the CPE and lock the customer out as a condition of it being allowed on our network. There is some interesting precedents where people purchased cable modems and loaded their own config to get around speed limiting and were then prosecuted for theft of service. On Sun, Nov 8, 2009 at 2:31 PM, Jayson Baker jay...@spectrasurf.com wrote: Only drawback I've seen to them buying it is that if you have confidential configuration information in it, and the customer demands access to it since they bought it On Sun, Nov 8, 2009 at 1:24 PM, RickG rgunder...@gmail.com wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
Nathan, That is what we do now, charge a higher installation fee but there are many drawbacks to that. Why do you say not to sell it to them? On Sun, Nov 8, 2009 at 3:41 PM, Nathan Stooke nstooke...@wisperisp.comwrote: Hello, Do not sell it to them, just charge a higher setup fee. Thanks -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 2:24 PM To: WISPA General List Subject: [WISPA] CPE - who buys it? I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
Those are my exact thoughts. On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
What do you mean you dont keep CPE on the books? On Sun, Nov 8, 2009 at 4:12 PM, Mike m...@aweiowa.com wrote: I made a decision when I founded this company that I wouldn't keep CPE on the books. I extract a capital fee on day one for the REAL cost of CPE and cabling, mount et al. I maintain ownership. It's like joining a health club; you pay an initiation fee. When you quit, you don't get to take the universal gym home with you. They comprehend this ideology and play along. I usually get them to sign a 2 year contract by telling them I can't raise their rates for 24 months. MIke At 02:24 PM 11/8/2009, you wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
We've always sold the gear to the customers. We don't have to pay property tax on it that way. They pay for the upgrades, we don't have to. (Though a change from us that causes 2 year old cpe to quit working is a case where we'll replace the gear at no charge. That or something close to that...) We probably have fewer customers due to this but I think we have higher quality customers. Those that can't (or won't, really doesn't matter which) $200 to $300 won't value our $35 to $40 service either. So far, the low ball customers are often the ones that want everything for nothing anyway. marlon - Original Message - From: RickG rgunder...@gmail.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 12:24 PM Subject: [WISPA] CPE - who buys it? I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/
Re: [WISPA] CPE - who buys it?
We put THEIR password on all radios. They can move to a new company any time they want. It's a good sales thing for us actually. No contracts and they own the radio. The only reason for them to stay with us is that we're doing a good job. The customers out here eat that logic up! marlon - Original Message - From: Jayson Baker jay...@spectrasurf.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 12:31 PM Subject: Re: [WISPA] CPE - who buys it? Only drawback I've seen to them buying it is that if you have confidential configuration information in it, and the customer demands access to it since they bought it On Sun, Nov 8, 2009 at 1:24 PM, RickG rgunder...@gmail.com wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
Biggest Con: Competitor can now come in and take control of your equipment and say Call them and tell them you are with us now. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 3:24 PM To: WISPA General List Subject: [WISPA] CPE - who buys it? I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/
Re: [WISPA] CPE - who buys it?
Absolutely, because the customer is now not worth as much. Kind of the same thing when evaluating a network, a Canopy Network will draw much more $ than a Ubiquiti network if there is a sale. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 4:57 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/
Re: [WISPA] CPE - who buys it?
Yeah, till you have to forklift entire towers at a time. Then what? No more install fees, but you could easily have to replace thousands of dollars in hardware within week or months. marlon - Original Message - From: Mike m...@aweiowa.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 1:12 PM Subject: Re: [WISPA] CPE - who buys it? I made a decision when I founded this company that I wouldn't keep CPE on the books. I extract a capital fee on day one for the REAL cost of CPE and cabling, mount et al. I maintain ownership. It's like joining a health club; you pay an initiation fee. When you quit, you don't get to take the universal gym home with you. They comprehend this ideology and play along. I usually get them to sign a 2 year contract by telling them I can't raise their rates for 24 months. MIke At 02:24 PM 11/8/2009, you wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
Radio equipment is on an accelerated depreciation schedule. I don't capitalize customer equipment; it's a cost for them to join. Instead, it's taxable for the state, and doesn't appear on my books as equipment. It is NOT an expense for the company. Unless you count my initial startup costs which were borne in cash by the company, I incur no debt and am profitable. I deduct REAL capital expenditures (tools, APs, computers, routers ...) Mike At 03:52 PM 11/8/2009, you wrote: What do you mean you dont keep CPE on the books? On Sun, Nov 8, 2009 at 4:12 PM, Mike m...@aweiowa.com wrote: I made a decision when I founded this company that I wouldn't keep CPE on the books. I extract a capital fee on day one for the REAL cost of CPE and cabling, mount et al. I maintain ownership. It's like joining a health club; you pay an initiation fee. When you quit, you don't get to take the universal gym home with you. They comprehend this ideology and play along. I usually get them to sign a 2 year contract by telling them I can't raise their rates for 24 months. MIke At 02:24 PM 11/8/2009, you wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG - --- 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/ 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/
Re: [WISPA] CPE - who buys it?
Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/
Re: [WISPA] CPE - who buys it?
Huh? I do capitalize tower equipment; just NOT CPE. Mike At 08:43 PM 11/8/2009, you wrote: Yeah, till you have to forklift entire towers at a time. Then what? No more install fees, but you could easily have to replace thousands of dollars in hardware within week or months. marlon - Original Message - From: Mike m...@aweiowa.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 1:12 PM Subject: Re: [WISPA] CPE - who buys it? I made a decision when I founded this company that I wouldn't keep CPE on the books. I extract a capital fee on day one for the REAL cost of CPE and cabling, mount et al. I maintain ownership. It's like joining a health club; you pay an initiation fee. When you quit, you don't get to take the universal gym home with you. They comprehend this ideology and play along. I usually get them to sign a 2 year contract by telling them I can't raise their rates for 24 months. MIke At 02:24 PM 11/8/2009, you wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG -- -- 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/ 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/
Re: [WISPA] CPE - who buys it?
Let me ask you this though... Would you rather 1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ --- - 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/ 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] CPE - who buys it?
Marlon, I'm assuming that since you have metered billing, you dont have to worry about shaping their bandwidth at the CPE then? On Sun, Nov 8, 2009 at 9:37 PM, Marlon K. Schafer o...@odessaoffice.comwrote: We put THEIR password on all radios. They can move to a new company any time they want. It's a good sales thing for us actually. No contracts and they own the radio. The only reason for them to stay with us is that we're doing a good job. The customers out here eat that logic up! marlon - Original Message - From: Jayson Baker jay...@spectrasurf.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 12:31 PM Subject: Re: [WISPA] CPE - who buys it? Only drawback I've seen to them buying it is that if you have confidential configuration information in it, and the customer demands access to it since they bought it On Sun, Nov 8, 2009 at 1:24 PM, RickG rgunder...@gmail.com wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/
Re: [WISPA] CPE - who buys it?
IF you have competition of the WISP sort that is :) On Sun, Nov 8, 2009 at 9:37 PM, Chuck Hogg ch...@shelbybb.com wrote: Biggest Con: Competitor can now come in and take control of your equipment and say Call them and tell them you are with us now. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 3:24 PM To: WISPA General List Subject: [WISPA] CPE - who buys it? I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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] CPE - who buys it?
I agree with that on a Canopy system or other high dollar CPE WISP. But, what about a WISP using low dollar equipment. Does it matter then? On Sun, Nov 8, 2009 at 9:40 PM, Chuck Hogg ch...@shelbybb.com wrote: Absolutely, because the customer is now not worth as much. Kind of the same thing when evaluating a network, a Canopy Network will draw much more $ than a Ubiquiti network if there is a sale. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of RickG Sent: Sunday, November 08, 2009 4:57 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/ 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] CPE - who buys it?
I'm not a CPA by any means but the moment CPE became available for less than a couple hundred dollars, it made total sense to expense it. If I understand correctly, for tax purposes, capitol equipment utilizing a depreciation schedule was really meant for high dollar items that last years. If I understand your post correctly, you are expensing the equipment on day one which would be a direct tax deduction for the taxable year and it remains company property. Thats the way we are doing it. Unfortunately, depending on the state, you have to pay property tax on it. With lower CPE cost and lower life expectancy, at some point it may make more sense to either sell it or give it away as part of the service package with the customer. Then again, if you are planning to sell at some point, the equipment does add value to the company. Thats what I am exploring. -RickG On Sun, Nov 8, 2009 at 10:14 PM, Mike m...@aweiowa.com wrote: Radio equipment is on an accelerated depreciation schedule. I don't capitalize customer equipment; it's a cost for them to join. Instead, it's taxable for the state, and doesn't appear on my books as equipment. It is NOT an expense for the company. Unless you count my initial startup costs which were borne in cash by the company, I incur no debt and am profitable. I deduct REAL capital expenditures (tools, APs, computers, routers ...) Mike At 03:52 PM 11/8/2009, you wrote: What do you mean you dont keep CPE on the books? On Sun, Nov 8, 2009 at 4:12 PM, Mike m...@aweiowa.com wrote: I made a decision when I founded this company that I wouldn't keep CPE on the books. I extract a capital fee on day one for the REAL cost of CPE and cabling, mount et al. I maintain ownership. It's like joining a health club; you pay an initiation fee. When you quit, you don't get to take the universal gym home with you. They comprehend this ideology and play along. I usually get them to sign a 2 year contract by telling them I can't raise their rates for 24 months. MIke At 02:24 PM 11/8/2009, you wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG - --- 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/ 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/ 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] CPE - who buys it?
Mike, Fortunately our balance sheet looks awesome too. Let me ask the question a different way: Do you think your company would be more attractive to a buyer if the CPE was owned by the company? On Sun, Nov 8, 2009 at 10:15 PM, Mike m...@aweiowa.com wrote: Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/ 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] CPE - who buys it?
I don't think so. I could come up with some sort of number for value for CPE I suppose, but a buyer would look at tower assets, all mine, radio equipment, all mine and cash flow. The pencil would dwell on the cash flow. For me, this is the best route. This IS my retirement, so I'm not looking to build and sell. I want a steady income so I can age and enjoy gracefully. I have no illusions I will get rich at this; merely comfortable. Mike At 10:26 PM 11/8/2009, you wrote: Mike, Fortunately our balance sheet looks awesome too. Let me ask the question a different way: Do you think your company would be more attractive to a buyer if the CPE was owned by the company? On Sun, Nov 8, 2009 at 10:15 PM, Mike m...@aweiowa.com wrote: Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ - --- 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/ 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/
Re: [WISPA] CPE - who buys it?
My personal opinion is that it would be more attractive if I got the cpe as part of a purchase of a company no matter equipment. On another note I have never had anyone wanting to buy the CPE to get out of a 1 year contract. The only thing preventing people to signup is the 99 install fee is to high but generally all people come back after a few months with the $99 in hand because they couldn't get a better deal and none would consider to pay $200+ or so for install and cpe. /Eje Sent via BlackBerry from T-Mobile -Original Message- From: RickG rgunder...@gmail.com Date: Sun, 8 Nov 2009 23:26:45 To: WISPA General Listwireless@wispa.org Subject: Re: [WISPA] CPE - who buys it? Mike, Fortunately our balance sheet looks awesome too. Let me ask the question a different way: Do you think your company would be more attractive to a buyer if the CPE was owned by the company? On Sun, Nov 8, 2009 at 10:15 PM, Mike m...@aweiowa.com wrote: Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/ 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/
Re: [WISPA] CPE - who buys it?
Interesting way to look at it Chuck. I have this simple aversion to acquiring debt. If the customer pays a capital fee up front to cover equipment costs, but never really owns it, I never have to pay lease charges. I own all of my towers so pay no rent there. I have not entertained leasing other equipment, but may a vehicle next year. APs and network equipment are cheap enough these days we just buy them and depreciate them on our Federal return. Of course, I may change my mind once everything has been depreciated and I end up paying more taxes. The hope is customer count will increase by then and that paying more taxes becomes a high class problem. Mike At 09:35 PM 11/8/2009, you wrote: Let me ask you this though... Would you rather 1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ --- - 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
Re: [WISPA] CPE - who buys it?
Normally, I'd choose door #2. In addition, the lease payment is full tax deduction. I like many aspects of leasing. But, you better have a good business plan because if you lose subs or service pricing goes down you could be caught in an negative cash flow very quickly. Also, what if you need to forklift upgrade before the lease is up? Or you have a mass amount of equipment go bad because of something like a lightning storm? Depending on where things are with the company and the economy debt free may be best at the time. Not arguing, just asking :) -RickG On Sun, Nov 8, 2009 at 10:35 PM, Chuck Hogg ch...@shelbybb.com wrote: Let me ask you this though... Would you rather 1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ --- - 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
Re: [WISPA] CPE - who buys it?
While our $200 install fee stops a few, it really hasnt been a big issue. I've seen several studies that indicated most would spend $200 for installation for broadband. On that note, the reason I'm inquiring about selling the customer the equipment is that would allow me to lower the install fee even though their out of pocket would be the same, they would feel they got something for it. -RickG On Sun, Nov 8, 2009 at 11:42 PM, e...@wisp-router.com wrote: My personal opinion is that it would be more attractive if I got the cpe as part of a purchase of a company no matter equipment. On another note I have never had anyone wanting to buy the CPE to get out of a 1 year contract. The only thing preventing people to signup is the 99 install fee is to high but generally all people come back after a few months with the $99 in hand because they couldn't get a better deal and none would consider to pay $200+ or so for install and cpe. /Eje Sent via BlackBerry from T-Mobile -Original Message- From: RickG rgunder...@gmail.com Date: Sun, 8 Nov 2009 23:26:45 To: WISPA General Listwireless@wispa.org Subject: Re: [WISPA] CPE - who buys it? Mike, Fortunately our balance sheet looks awesome too. Let me ask the question a different way: Do you think your company would be more attractive to a buyer if the CPE was owned by the company? On Sun, Nov 8, 2009 at 10:15 PM, Mike m...@aweiowa.com wrote: Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/ 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
Re: [WISPA] CPE - who buys it?
Yup... I've been saying this for almost 8 years... ;) The other thing to keep in mind is when you can buy 100 CPE at a time, the price is less... which actually offsets some of the interest rate of leasing. :) Travis Microserv Chuck Hogg wrote: Let me ask you this though... Would you rather 1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -Original Message- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: Do you feel it has a negative affect on your companies value if you dont own the CPE? On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird m...@tc3net.com wrote: You don't have to pay property tax on the CPE. You don't have to go pick up the device if the customer quits. You can charge the customer for replacement radios. You can offer a value add-on product such as modem insurance. Regards Michael Baird I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ --- - 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
Re: [WISPA] CPE - who buys it?
If you own all of the CPE the customer will expect the latest and greatest. When you upgrade the system you not only have to change out tower gear but you also have to change out the cpe. Oh yeah, you have to pay for both if you own the cpe. But you'll not get any install fees from people down the road. marlon - Original Message - From: Mike m...@aweiowa.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 7:24 PM Subject: Re: [WISPA] CPE - who buys it? Huh? I do capitalize tower equipment; just NOT CPE. Mike At 08:43 PM 11/8/2009, you wrote: Yeah, till you have to forklift entire towers at a time. Then what? No more install fees, but you could easily have to replace thousands of dollars in hardware within week or months. marlon - Original Message - From: Mike m...@aweiowa.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 1:12 PM Subject: Re: [WISPA] CPE - who buys it? I made a decision when I founded this company that I wouldn't keep CPE on the books. I extract a capital fee on day one for the REAL cost of CPE and cabling, mount et al. I maintain ownership. It's like joining a health club; you pay an initiation fee. When you quit, you don't get to take the universal gym home with you. They comprehend this ideology and play along. I usually get them to sign a 2 year contract by telling them I can't raise their rates for 24 months. MIke At 02:24 PM 11/8/2009, you wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG -- -- 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/ 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/ 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] CPE - who buys it?
That's correct. marlon - Original Message - From: RickG rgunder...@gmail.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 8:06 PM Subject: Re: [WISPA] CPE - who buys it? Marlon, I'm assuming that since you have metered billing, you dont have to worry about shaping their bandwidth at the CPE then? On Sun, Nov 8, 2009 at 9:37 PM, Marlon K. Schafer o...@odessaoffice.comwrote: We put THEIR password on all radios. They can move to a new company any time they want. It's a good sales thing for us actually. No contracts and they own the radio. The only reason for them to stay with us is that we're doing a good job. The customers out here eat that logic up! marlon - Original Message - From: Jayson Baker jay...@spectrasurf.com To: WISPA General List wireless@wispa.org Sent: Sunday, November 08, 2009 12:31 PM Subject: Re: [WISPA] CPE - who buys it? Only drawback I've seen to them buying it is that if you have confidential configuration information in it, and the customer demands access to it since they bought it On Sun, Nov 8, 2009 at 1:24 PM, RickG rgunder...@gmail.com wrote: I've always provided the CPE to the end user and retained ownership as part of the service. That was mostly due to the high cost of CPE in the past. With the advent of lower CPE cost, I'm considering changing that to where the customer buys their own CPE. I'd like to hear the pros and cons to this strategy. -RickG 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/ 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/ 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/
