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Business concept of NEOFast

By Shannon Sims,2015-01-14 17:35
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Business concept of NEOFast

    Business concept of NEOFast.Net

    Revenue generated from the sale of broadband wireless connections:

    All accounts are figured to be a minimum of 1Mbit throughput, designed (maximum) throughput of 2.

residential:

    1. $30/month, includes 1+any fraction gigs of transfer (use). Each gig over 2 (and fraction) and over is additional $6.

    2. $60/month, includes 7+any fraction gigs of transfer (use). Each gig over 8 (and fraction) and over is additional $3

    (the purpose of charging by the gig, is to stop the use of file sharing. file sharing eats bandwidth (and could cost me a fortune, as well as make the network badly overloaded). File sharing will be forbidden in the terms of service. If they want to do that, I want them to abuse someone else's network, not mine.

Business:

    1. $25/month, same terms as #1 above. May not run servers, must be at non-24 hr public business location (ie, close by 7 pm).

    2. $55/month, same terms as #2 above. May not run servers. 3. $300/month. includes 40 gigs of transfer. Includes multiple IP's, dedicated link, may run servers, but servers must be within TOS certain restrictions on content and type, no streaming, for instance. 4. $400/month. 4 Mbit dedicated link, involves installing carrier grade link to customer. Includes 40 gigs transfer, $1.75 gig over that. Customer pays for dedicated link hardware. Amortized over 2 years, FAR cheaper than a telco single T-1.

    (the initial startup is not capable of supporting Business type 3 accounts... that has to wait until certain upgrades)

Terms.

    Customer must pay actual cost of hardware (wholesale), no labor fees for install. Install ranges from ~120 for close in to ~700 for the very far out or difficult to reach (these will not have other broadband options).

Overhead at startup:

    Phone service: $80/mo cellular phone line. $40/mo for additional phone line via VOIP. (Only need the cellular to start, and it can start at a lower cost).

Land rent required for repeater location: $400 annual.

Rooftop rights at bandwidth provider: $75/month.

    Bandwidth cost: $1.50 per gig used. Minimum useage charge is 30 gigs.

    $5000 builds the initial link, 3 access points to reach about 3/5 of the targeted market area.

    Esimated cost to deploy to 90% of target markets immediately: $24,000.

    Sometime around year 2, I will switch providers to non-useage based charges, estimated monthly cost is $1500 / mo for 4-10 Mbit capacity. Current capacity is whatever I can backhaul - between 2 and 3.

    Depending on level, Customer 4 to 10 makes this cash flow positive. I presently do not have an office (out of my home), so no office costs. That could change. Office space available for ~400 a month plus misc expenses (phone line, etc).

    I plan that in 2 years, I will have between 30 and 75 customers, with 80% being the lowest price account. In two years, I should have my present home available for dedicated office space (moving out of it, owned free and clear by then).

    I do not have to take a regular paycheck of any kind for the next 2 years. I will plan on small (20% or less) take of the business's profits for the next 2 years to partially recover initial investment.

Assumptions used to arrive at market conclusion:

    Uptake over 2 years:

    10% of current broadband users in the market - This is MUCH cheaper than anyone else's broadband, and MUCH faster

    10% of current dialup users in the market - present local pricing varies from $15 to $25 for dialup, most are not unlimited time.

    2% of currently non-connected population, due to growth of net use

Total share of households; 3 - 7 percent.

    Between 15 and 40 percent of households have internet access of some kind. (varies by location)

    Total market population in households: Estimated (no definitive count of the rural population within coverage area is really possible, but good numbers have been obtained for all towns) at 1200.

    Most WISP operations tell me that my market penetration at 2 years should be vastly better than assumptions. Some say it's right on. I figure it is conservative.

    Normal access point capacity: 25 residential, I have about half that density planned for all access points. (makes cost of AP higher per customer, means very good quality of service) 75 Customers would share about 8-10 Access points, some populated more densely than others. Access points total cost can range from $3000 to $800.

Competition:

    About 20% of total market is covered by another WISP operator. Thier plans start at around $45 / mo for 384K.

    About 60% of the total market is covered by DSL. Their residential plans are ~$55/mo for 640K access.

    The other WISP has about $400 install cost (or $20/mo to finance), the DSL is anywhere from $35 residential (varies) to over $200 for high end business.

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