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Decades plural? You're off by an order of magnitude. Upfront Investment: $140 billion Yearly revenue per Subscriber: $70 month * 12 months/year * .97 operatin

Decades plural? You're off by an order of magnitude. Upfront Investment: $140 billion Yearly revenue per Subscriber: $70 month * 12 months/year * .97 operating margin = $815 Households in US: 110 million. Households in US w/ broadband: 102 million. So let's say 50 million fiber subscribers 140 billion / 50 million subscribers / $815 revenue per subscriber per year = 3.4 years Three and a half years to recoup? Not bad! Installing fiber in dense neighborhoods with a high subscriber rate should recoup very quickly. It'd take a little longer in rural areas and poor areas. But there is absolutely no good reason for every metropolitan area in the US to not have gigabit fiber.

walshemj 10y ago
what's the average cost of connecting a sub in this model and what % will pay $70 a month
rayiner 10y ago
Let's look at actual numbers rather than fantasy. > Upfront Investment: $140 billion It cost Verizon at least $26 billion,[1] to wire up 7 million subscribers, or about $3,700 per subscriber. Verizon's network is in dense northeastern/midatlantic states, so in reality much more than that once you start wiring up the rest of the country. Chattanooga's network was about $5,500 per subscriber. > Yearly revenue per Subscriber: $70 month * 12 months/year * .97 operating margin = $815 The gross operating margin for Chattanooga's gigabit system is under 40%.[2] So $336 per year. > 140 billion / 50 million subscribers / $815 revenue per subscriber per year = 3.4 years $3,700 per subscriber / $336 revenue per subscriber per year = 11 years. You've broken even just in time for the next around of upgrades! > Installing fiber in dense neighborhoods with a high subscriber rate should recoup very quickly Verizon only averages about 33% uptake rate, and that's by avoiding low-income inner cities or sparse rural areas. [1] The reports are $23 billion through 2010. Don't have records after that, but e.g. it spent $3 billion in NYC alone since then. The subscriber count is 2016. [2] Verizon's margin is quite a bit less than that (single digits), but let's assume in this hypothetical that you're not maintaining a legacy POTS network and don't have a unionized workforce.
- rayiner 10y ago
  I should point out that the above assumes you're content making no profit during that 10 years. If you want to eke out a 5% annual return on your $3,700 investment, your pay-off time is 24 years.

walshemj 10y ago

what's the average cost of connecting a sub in this model and what % will pay $70 a month

rayiner 10y ago

Let's look at actual numbers rather than fantasy. > Upfront Investment: $140 billion It cost Verizon at least $26 billion,[1] to wire up 7 million subscribers, or about $3,700 per subscriber. Verizon's network is in dense northeastern/midatlantic states, so in reality much more than that once you start wiring up the rest of the country. Chattanooga's network was about $5,500 per subscriber. > Yearly revenue per Subscriber: $70 month * 12 months/year * .97 operating margin = $815 The gross operating margin for Chattanooga's gigabit system is under 40%.[2] So $336 per year. > 140 billion / 50 million subscribers / $815 revenue per subscriber per year = 3.4 years $3,700 per subscriber / $336 revenue per subscriber per year = 11 years. You've broken even just in time for the next around of upgrades! > Installing fiber in dense neighborhoods with a high subscriber rate should recoup very quickly Verizon only averages about 33% uptake rate, and that's by avoiding low-income inner cities or sparse rural areas. [1] The reports are $23 billion through 2010. Don't have records after that, but e.g. it spent $3 billion in NYC alone since then. The subscriber count is 2016. [2] Verizon's margin is quite a bit less than that (single digits), but let's assume in this hypothetical that you're not maintaining a legacy POTS network and don't have a unionized workforce.

rayiner 10y ago
I should point out that the above assumes you're content making no profit during that 10 years. If you want to eke out a 5% annual return on your $3,700 investment, your pay-off time is 24 years.