Optimizing ROI When Delivering Business Services

By Amanda Kowalik   July 19, 2014

Delivering connectivity to small and medium-sized businesses is one of the fastest growing and most profitable sources of new business for network operators, specifically wireless broadband service providers. Of course, it is also the most competitive area with the most demanding customers, behooving participants to get smart about SMB services.

I’m defining business services as typically 10 – 100 Mbps symmetrical services with defined service level agreements for availability. This service might be deployed with a two-year agreement and may or may not include an upfront installation charge. Price points for these services are dictated by market forces primarily driven by whether or not alternative technologies or providers are available.

Let’s take a look at a very simple ROI model and example. For a customer paying $300/month with a $300 installation charge will yield $7,500 revenue over the initial two year agreement. This “budget” can be allocated into roughly equal thirds: the first third for equipment and installation costs, the second third for on-going maintenance and bandwidth costs, and the final third for profit. This split yields the network operator a 33 percent margin and a simple payback period of less than 16 months.

The biggest variables in this model for the operator are the initial cost of the equipment and on-going support costs. The network operator can optimize ROI by selecting the solution that delivers the lowest total cost of ownership while meeting the service level agreements required to satisfy the end customer.

This week, Cambium Networks released two new products, the PTP 650L and the PTP 450. These are point-to-point (PTP) wireless broadband solutions that deliver business-class service levels including symmetrical data rates, low latency and high availability. Both solutions also offer complete monitoring and management solutions to enable reporting on service levels (using SNMP, syslog or Cambium’s Wireless Manager element management system).

By having a wide range of solutions at hand, the network operator can select the right equipment at the right functionality to price point ratio to tailor business services around an optimized return on investment.

We would like to hear your best practices for delivering business services and how we can help you optimize your return on investment, and invite you to do so on our forum or Facebook.