Friday, May 9, 2008

WIMAX SERVICE TARIFF PLANNING

Recently read that how you can plan your WiMax internet service tariff plans. You can go to few different ways to how to calculate it most affordable for your customers.

The per-line $ cost of WiMax is totally differrent from the Per-Line$ cost of ADSL. Yes, ADSL Costs have been recovered over 10's of years, and you dont have that much time for break-even, but WiMax per capita Capex is also very low.
- Make a 3 year model on the Capex recovery with 3 scenarios - Conservative, Realistic and Optimistic. Each model will have projected number of subscribers - at various price points. this will give you 2-3 key data points on which model looks most realist.
Once the data is right in front of you, just take a 20% dip in bandwidth costs over every year, and build data price.
Carriers also optimise throughput by reducing throttle bandwidth. Access might be 54mbps, but bandwidth is rarely close to that number, that can further optimise the OpEx.

Add a Delta of recovery exp - 20% - 40% of Opex. and see if the number is helpful.
The other disruptive way of doing it is - take a ridiculusly low price, say in a market which has 40$ per year fee, take 10$ per year. build projections on network, opex and subscribers - you might be surprised on the results.

WiMax for starter as you understand is far superior tech compared to ur adsl or other existing techs on the price front here the method i will apply to determine the price
1.what is total CAPEx involment with project (like 360 Wimax tower and other infrastructure required),
next is what is cost acquire the Bandwidth for delivery through the last mile (in this case Wimax)
now you have to price the product so that your not making loss on whole thing plus add profit in

2.Now,Bcoz ur using the the newest tech u hav many advantages over old legacy techs ,deployment is cheaper
like if u hav 360 tower u can very much cover a area of 25sq km

3.on the price there could be synergy be a premium player as ur tech is the best,target the niche market
and ask for premium payout or target the mass market and price it below asdl player and get get
paid by driving the volume and creating new market of users(this is what Indian mobile players did!)
on the pricing a lot will depend on the sourcing of your infrastructure and bandwidth.
Amortization of the cost of bandwidth + cost of BTS + cost of CPE + Marginal opex cost

Example -
- BTS (360 coverage) capacity - 'x' mbps
Wimax POP/ BTS(360 Coverage) Costs "y"
Per kbps cost = (x * 1024) / y

- Cost of CPE (if on Right to use/ Bundled model)
- CAPEX (network hardware, switching architecture, Tower, backhaul)
- Bandwidth cost - (shared model costing - typical to what ADSL does)
take all these into consideration and align your foretasted numbers with minimal margins in place to start with.

Tarrif models could have multiple variants.
To cover the capex spent on WIMAX
- One time Service charges - covers cost of CPE (if provided on rental)
- Recurring Wireless access charges - (Covers per kbps bandwidth usage cost & maintenance)

Bandwidth
- Clean bandwidth / bundled with CPE - High premium
- 1:4 , min and max throughput / bundled with CPE -

You can keep on subsidizing the price after adding bundles like VOIP and internet telephony.

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