So, you are considering to enter FTTx ISP’s and providers field in your area. While technology is important, and this is what we focus so much on our blog – you are after all in business, and here’s some thoughts we would like you to note.
First and foremost you’ll have to keep tabs on the services offered by other providers as well as your own, in case you happen to be a ISP. Let’s say you develop a system–how will the competition react?
Will they cut down prices? (or your fiber’s? OK, we are joking… but some countries there really was at some time fiber cut wars, when competitors damaged rivals fiber infrastructure.
Figure 1: Not really a competitor, but it does a damage for sure
We’ve witnessed competitors react by trimming down their pricing and/or possibly upgrading their services.
Figure 2: Will your competitors react with massive sale prices and race-to-the bottom will begin?
Another thing we have spotted is that some competitors will admit defeat, shut down their regional offices and respond to their falling subscriber numbers outside their offices.
Regardless of the reaction, you are up for some pleasant or negative changes. If you are based in a smaller area and your prospect rivals are a big communications company and cable handlers, and in case their regional unit isn’t new, their interest in competing against you won’t be high. On the contrary, if your area is appealing enough to their eyes, the may take the decision to stand firm and jump into the battlefield–and they will be armed with the necessary resources to achieve that. If you get yourself familiar with their managing team, you’ll gain an idea as to their most probable reaction to your business.
We have seen one case at the present in the initial phases of planning which anticipates to cover an unprivileged region.
There are a few tiny cable TV networks in some units of the suggested region paired with an old as dirt unit, who have shown some interest in joining the FTTH system. They perceive such thing as more cost-efficient than improving their outdated unit.
You should also aim to offer services to your subscribers that surpass those of your competitors, at an attractive cost, and that cost should cover the ROI you want.
Because there are many different factors that come into play, we will avoid for now to offer a copy/paste and impersonal guidance for your services and financial plan. Now, if you are unable to execute the models on your own, you should seek the services of a seasoned consultant who can give you a helping hand with your plan.
Initially, you’ll have to decide first about the services you are going to provide and a price for each so you can effectively compete with other suppliers, even if they respond by trimming down their pricing and upgrading their offers. Obviously, you will also need to come-up with a realistic evaluation of your own expenses to develop the network and potential penetration rates.
Doing client surveys to gain an improved insight of the amount of subs you are going to earn is also a great idea.
It is evident that you’ll have to perform accurate assessments of equipment and developing expenses, which differ from area to area, and based on the parts of the unit which will be placed underground or up in the air.
If you are planning for an aerial unit, evaluate how much “make-ready” you will require to begin the development. If you don’t possess any internal experience, you can hire someone else to do it. Remember the price of falls per subscriber. This can add up to your costs in developed regions.
You also want to jump in promptly in the greenfields while trenches are available so you can trim down the costs of falls and save money.
Your operational costs (a bit more on OPEX and CAPEX here) will not be as big as those of your competitors, due to the fact that a fiber unit is more cost-effective.
Of course, the costs won’t be null. Some folks are seen to trim fibers when putting down other cables and automobiles may crush on telephone poles and possibly zap cables.
Subscribers will also find it hard to figure out how the should use their tools and frequently anticipate help from their provider. This, of course, will rise the costs for hiring reps (in-house or under a contract) and repeat costs for maintaining web and telephone interconnection and video provision.
In extreme circumstances, equipment might get ruined. A constant source of gaps in the service equals to insufficiently cleared-up fiber optic links.