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Woohoo

@qwest.net

[Equipment] Wisp

Hello, I am new to the WISP business and I want to start a WISP.

Right now I live in a town with 22,000 residents and about 5,500 houses. Currently there is only one option for Internet, CenturyLink, they charge $45/m for 12Mbps. There is also Satilitte Internet but that is extremely costly and almost nobody around here has it.

My plan is to start offering Internet at speeds of 10Mbps-20Mbps for $30/m. I will lease fiber to connect Cambium Canopy and than wirelessly connect my customers homes. I am thinking I will need 1Gbps for my fiber connection, what would be a good price on this? I live like 30 miles from Minneapolis, where Charter has a hub.

Also, has anyone used the Canopy? Would you recommend them?

Thanks for the help.


battleop

join:2005-09-28
00000
How do you plan on paying for that 1Gbps circuit during the start up phase and where do you plan to get it from?
--
I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

Chele

join:2003-07-23
kudos:1
reply to Woohoo
Woohoo

The equipment will be the least of your problems:( Fortunately, there are a fair deal of options, equipment wise. The bigger issues(to my way of thinking), as mentioned above, is BW and equally important=POP locations. You don't know where to get or how much BW is going to cost you and you already have a price point for your BW! Some people here are paying well over $200 per mbps, hopefully, you won't be in a territory where those prices are the norm.
Look through older posts and you'll find common obstacles, and benefits, to this "hobby" we all call WISPs:)

jcremin

join:2009-12-22
Siren, WI
kudos:3
reply to Woohoo
said by Woohoo :

Right now I live in a town with 22,000 residents and about 5,500 houses. Currently there is only one option for Internet, CenturyLink, they charge $45/m for 12Mbps. My plan is to start offering Internet at speeds of 10Mbps-20Mbps for $30/m.

That might be tough to compete with. That's a pretty good speed for the price. I operate my WISP where you're lucky to get 1 meg for $40/mo (before all the extra taxes, fees, forced phone line, etc. My plans top out at 2 megs, so I'll let someone else offer advise on how to handle selling 10+ meg plans.

I will comment on the fact that Centurylink is your ILEC. They are the primary LEC around here too, with a couple small local phone companies mixed in here and there. I can tell you one thing and that is a lot of people HATE CL. I have plenty of customers who pay me more for slower plans because we are local with much better customer service and offer consistent plans. If those 12 meg lines fluctuate a ton and might drop significantly in speed during peak times, you'll find you can sell slower plans for the same price assuming they perform consistently. The hard part is cutting through the marketing BS that CL does, since a lot of people don't know the difference and just assume the numbers on the ad are correct.

said by Woohoo :

I will lease fiber to connect Cambium Canopy and than wirelessly connect my customers homes. I live like 30 miles from Minneapolis, where Charter has a hub.

Who were you planning on leasing fiber from? And which city are you located in? If you are only 30 miles from Minneapolis, your best long-term bet is probably to get fiber transport to the 511 building where you can get wholesale bandwidth from tier1 ISPs like Level3 or Cogent (just to name a couple of many options). I can get you a few contacts that would be able to help you with that.

said by Woohoo :

I am thinking I will need 1Gbps for my fiber connection, what would be a good price on this?

I wouldn't start with a gig. You're throwing money away for a LONG time. Start with as little as they will let you purchase, with a technology that will make it easy to upgrade as you need it. If you are leasing a dedicated fiber line from someone, they will most likely force you to start at 100 megs with an upgrade to 1 gig usually costing about about 25% more, but until you need more than that initial 100 megs, you'd be wasting money on the gigabit connection.

I'm a lot more rural than you, but being in Centurylink territory, they are my only "affordable" option for fiber transport. Last quote I got from them was about $3500/mo for 100 megs and about $4500 for a gig of transport down to the 511 building in MPLS, plus bandwidth and other cross connect fees. I have a better deal from a neighboring WISP, so I still use them as my provider even though I wish I could afford fiber right to my network.


readmore

@ucc-net.ca
reply to Woohoo
You're going to need to use PMP450 / 430 to get 10 - 20Mb down. Remember that each 430 access point can only do 50Mb/s per sector @ 20MHz, 24Mb/s @ 10MHz and 10Mb @ 5Mhz. These are all best case numbers meaning you'll need to have all clients connected at 3x. You don't need 1gb starting out. The price is totally going to be determined on your location and who is in the area.

Lots of people have used Canopy. It's expensive, it works as performed. You need to put together a serious business plan and run the numbers. $30 a month is not very expensive and it's going to be a while to recoup your costs.

For example, a 430 with 1 access point 1 antenna and 25 10Mb/s SM's is just about $10,000. This doesn't include your monthly bandwidth, backhaul costs, tower costs, power costs, install costs, tech support, mounting hardware, install tools, etc. etc. etc.

Assuming you get all 25 instantly @ $30 a month that's only $750 a month. Just over a year ROI without including any other costs. I'm hoping you know how to do networking, running a business, marketing, tech support because else your costs go way up to hire someone else. That $10000 is cheap too because you usually need to cover more than just 90 degrees so you'll need 2 or 3 more access points, then keep adding your SM's every month for $7000 if you do 25.

Get your cash flow sheet together and put together a business plan. I think your monthly cost is way too low. My minimum packages start at $49.95 and go up to $130 a month. I can not imagine going cheaper and trying to support high bandwidth without a ton of customers to start.

Woohoo

join:2012-11-02
reply to jcremin
jcremin, I am in Elk River. What you saying is lease a fiber from someone to MPLS and than purchase bandwidth at a wholesale rate, correct? We currently have CenturyLink an our actual speed is more like 5Mbps.

People are saying $30 is way to low, what about matching there price at $40 or $45?

Also, I was talking with a retailer of the Canopy equipment and he offered me 10% off the units if I buy 25 or more. So for SMs that can do 10Mbps-20Mbps that would be $270. Should I make my customers pay for this? I was thinking having them buy the SM and don't have them on a contract.

And does anyone know who I would contact to lease a water tower for my equipment? Would that be the city?
Expand your moderator at work


Woohoo

@qwest.net
reply to jcremin

Re: [Equipment] Wisp

jcremin, are you saying thr I should run my own fiber to MPLS? I am located in Elk River and I was thinking of leasing from either CenturyLink, Intelletrace, or Charter. A guy from Intelletrace said I can get 20Mbps for $1500 plus $1000 for install. It would make sense to get more than 20Mbps right? I don't think I'd be anywhere near breaking even with just 20Mbps to sell.

Also, I was told I should have enough bandwidth for a 6:1 ratio. Does that mean if I have 60 customers and I want to offer 10Mbps that I would need 60Mbps?

Thanks for the help

jcremin

join:2009-12-22
Siren, WI
kudos:3
reply to Woohoo
said by Woohoo:

jcremin, I am in Elk River. What you saying is lease a fiber from someone to MPLS and than purchase bandwidth at a wholesale rate, correct?

That's correct. It eliminates you from being locked into a specific provider, or allows you to BGP to multiple providers in the future. PM me if you want more info about who I've talked to that might be able to help.

said by Woohoo:

We currently have CenturyLink an our actual speed is more like 5Mbps. People are saying $30 is way to low, what about matching there price at $40 or $45?

That makes it easier to compete, assuming that most people are in that same boat. You don't have to blow CL out of the water. You'll probably go out of business if you try. Just provide something better than them that people want. It doesn't have to be a faster speed, it doesn't have to be a lower price. But pick something and run with it. If $45 is the going rate for people to end up with 5 megs, do something like $40 for 5 megs and provide it consistently. Also, you should figure out your target prices and compare them with reality. Will you make money selling 5 megs for $40 once all the rest of the costs are figured in?

said by Woohoo:

Also, I was talking with a retailer of the Canopy equipment and he offered me 10% off the units if I buy 25 or more. So for SMs that can do 10Mbps-20Mbps that would be $270. Should I make my customers pay for this? I was thinking having them buy the SM and don't have them on a contract.

You have a few options. I started off selling customers the equipment at cost, and charging a small install fee. I changed my plan to simply loan them the equipment for free and charge a larger installation fee. It was much easier to have one up-front cost, and the advantage is that if someone cancels, you can go get that antenna and reuse it for the next install. Otherwise when people owned the equipment, I had to deal with blocking their antennas from the tower if they cancelled, and that became a bit of a nightmare. It was easier to just own the equipment and let them use it. Starting out, you may not be able to afford to do that without a loan that can cover the equipment costs until you get to the "break even" duration.

I personally do $100 for the install (just lowered it from $150 because I have an excess of inventory right now and it will make me more from paying accounts than sitting on the shelf. I do make people sign a 1 year contract, and it is rarely a problem. I just explain that the equipment is really expensive and that way I know I will have the account long enough to not lose money on the cost of purchasing it.

said by Woohoo:

And does anyone know who I would contact to lease a water tower for my equipment? Would that be the city?

Yea, probably the city. If there are any cell phone antennas up there, be prepared for some sticker shock on what they expect you to pay them. It depends a lot on the previously set precedent. I've approached and walked away from a few villages that wanted upwards of $1000/mo. And others were fine with $50/mo. One was willing to trade services, free internet at the village buildings for space on the tower. It really varies and can be all over the board.


WHT

join:2010-03-26
Rosston, TX
kudos:5

1 edit
reply to Woohoo
Woohoo...

The problem is that you won't have a product to sell that would have any perceived additional or better value.

OK...So you want to deliver 10 to 20 Mbps compared to the incumbent 12 Mbps. The wireless infrastructure to support those speeds would be so expensive, a subscriber end point of only $30 would never reach a ROI. Let's take that end point price off the table.

So...Now you match the incumbent's $45 per month that has a near zero cost to deploy. The copper plant is already in place, DSLAMs are active...so the only cost to the telephone company is the bulk order $20 or so price of a DSL modem. The self-install eliminates a truck roll and installation labor. Let's say you eat 60% of the installation and make it up in reoccurring monthly revenue.

But you still don't have a product that has any perceived additional or better value value. A DSL 12 Mbps line is adequate for say..oh, 90% of the existing users, and they are likely happy with the service and not likely to change.

So the question is...what method or process will you have to put in place to provide a significantly a superior product above and beyond a simple perception.

You have 5,500 homes. If they don't already have DSL or satellite, then they won't have any need for your service either - figure 10%. Now we're at less the 5,000. Figure on you might get 5% from typical churn from DSL and another 5% from being the new kid on the block. Now we're at 500 users. 500 users....

Opinions vary by project analysts and deployment landscape - the estimates range from that if you don't have 1,000 users by the end of two years or 1,000 users by the end of six months, you're not likely going to grow past that point. If there is a zero chance of any other provider coming in to town, you could use the two year end point. On the other hand, if the need is great enough for *you* to have a go at it, then there *will* be new competitors.

But this is based on a 1,000 user uptake and you may only see half of that. That is going to pretty much limit your project as a full time hobby.

/edited for spelling


TomS_
Git-r-done
Premium,MVM
join:2002-07-19
London, UK
kudos:5
reply to Woohoo
said by Woohoo:

jcremin, are you saying thr I should run my own fiber to MPLS?

You dont run anything to MPLS, its a networking technology that allows for a form of "IP network virtualisation". MPLS is ... if you will ... "the cloud" for IP routing. It can also be used as a means to provide transport like services over an existing IP network.

I think what jcremin is talking about is obtaining an MPLS based service with access ports in two locations, 1 in a POP somewhere in a large town where you have access to a large number of transit providers at a lower cost, and the other in a POP close to where you are servicing your clients.

Where MPLS comes in is that it provides you with your own virtual routed IP link between those two places (and more as required), but while allowing you to choose your own transit providers for access to the greater internet. Alternatively, the provider may use MPLS and related technologies to provide a layer 2 like cross connect between those two locations, such that it appears like a really long ethernet cable (i.e. totally transparent to you.)

jcremin

join:2009-12-22
Siren, WI
kudos:3
said by TomS_:

You dont run anything to MPLS

I knew I might create a problem just after I typed that. MPLS is also a regional abbreviation used for people (like me) who are somtimes too lazy to type out Minneapolis, Minnesota. Sorry for the confusion.


TomS_
Git-r-done
Premium,MVM
join:2002-07-19
London, UK
kudos:5
Ah ha!

jcremin

join:2009-12-22
Siren, WI
kudos:3
Either way, that was still a great and simple explanation of MPLS (the technology) and (if available to him) might be a better and cheaper alternative than leasing a dedicated point to point fiber.