For AP's it's ok if I pay them off in 3 to 4 years. I try to do 4 year
loans for all hardware.
For CPE this gets more complicated. Everyone wants to count gross income
from that customer to pay off the gear. That's really not right though as
every customer has a cost to them.
We use NET revenue to figure out payback times. I ran about a 20% margin
last year, it'll be higher than that this year but I don't have the numbers
yet so I'll stick with the easy number. At an average of $37.5 per sub we
figure it out at $8ish per sub per month. We loose $50 to $100 per
installation. It's a bit better than that right now as the hardware has
come down a bit but we're holding the installation costs up.
So I'm in the 7 to 13 month time frame to go cash flow positive on each
customer.
Our growth rates are running over 25% per year so this time lag can be a
real issue. In fact, it's probably THE hardest thing for us to manage.
laters,
marlon
----- Original Message -----
From: "Patrick Leary" <[EMAIL PROTECTED]>
To: "WISPA General List" <[email protected]>
Sent: Thursday, November 29, 2007 4:35 PM
Subject: [WISPA] What basic ROI do you target?
I am curious about how divergent the responses may be. In your answer,
include just the cost of the truck roll and CPE measured against any
set-up and service initiation fees charged with the monthly subscription
fee.
Years ago, it was not uncommon for WISPs to say they need a 24-month
basic return per subscriber. These days I suspect most will say under 9
months.
Patrick Leary
AVP, Market Development
Alvarion, Inc.
o: 650.314.2628
c: 760.580.0080
[EMAIL PROTECTED]
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