Comment by capableweb
3 years ago
The actual price they are offering seems to be $55 or $79/month + ~$200 installation fee. Also missing in your calculation, is a $30/month subsidy from FCCs "Affordable Connectivity Program".
I didn't make the calculation myself, but a sub-10 year horizon for a project someone seems to do from the goodness of their heart, doesn't seem so bad.
Including the installation fee and $30/mo subsidy (I am assuming this means the price he receives is $30 higher than the one customers pay), my quick math shows it would take a bit over 71 months (almost 6 years) to hit $2.6M in total revenue. However, that assumes literally every customer chooses the $55/month plan, if everyone chose the $79/mo plan, it would take almost 51 months, or a bit over 4 years (obviously the number will be somewhere in between that).
Also, this math assumes no growth whatsoever in homes served or other revenue lines. I assume adding another home will be far cheaper than building out the core network, and the article itself notes other lines of business. To be honest, this doesn't seem like a terrible investment to me. There are certainly better ones in a pure ROI point of view, but for government investments? More of these please!
You are completely ignoring any operating costs. For all we know monthly profit could be negative, and not 100%.
You're also assuming a 100% conversion rate, in terms of homes being wired for access. That's a pretty big assumption!
He's serving 600 households afaik, not offering service to 600 households. So the assumption is that there's a 0% attrition rate. Pretty safe assumption for monopolies, or for local services with half the price and 5x the bandwidth of the other choices.
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