Tuesday, June 26, 2018

FairlawnGig Claims 50% Take Rates for its Municipal Broadband Service

FairlawnGig, an open access internet access network serving the city of Fairlawn, near Akron, Ohio, now is poised to expand outside Fairlawn. The gigabit services is sold to consumers for $75 a month. Prior to FairlawnGig’s launch, the fastest available internet access speed sold in the area was 50 Mbps.

It appears take rates are highest for the 300-megabit speed package, costing $55 per month (boosted from the initial 150-Mbps level). Business services sell for $500 a month, with speeds up to 100 Gbps.

FairlawnGig says it gets a 50-percent “sign up” rate, which might mean the initial take rate is quite high, compared to most other new internet access services launched by a competitor in any U.S. market.

FairlawnGig also sells phone service for $25 a month.

The city has 3,579 houses, of which 3,320 are occupied. The city also counts about 800 businesses. Assuming it cost $10 million to build the network, that implies a cost of perhaps $2284 per location, if the full cost of the $10 million in debt raised by the city was used to build the network.

The addressable consumer market is about 3,320 locations, implying FairlawnGig could have as many as 1,660 paying consumer accounts (not including business accounts).

It is possible that the cost of activated drops is as much as $2,000 per consumer customer location in additional spending.

No comments:

Public Policy is Devilishly Hard Stuff

Public policy success always is harder than you might think, if only because the causal relationships between a policy and an intended out...