Ahem...
Let's talk about what it costs us to build just one tower.
A simple 12m tower that can be purchased "off the self" at companies like Miro will cost you R50K for the tower and another R30K to get standing. If you end up with dodgy soil, the engineers may demand large amounts of concrete. For example, we have a 14m mast that is held in place by 102 tons of concrete. Not a cheap exercise.
Then you need to be very careful as to the location of a site. Both in terms of line of site, and landlord. Select the wrong site and the land owner will make your life a living hell once the tower's standing. He or she will blackmail you, block access to the site, switch the power off if speedtest isn't what's expected - all because everyone else in the house is streaming and their 100Mb is being used up.
Next there's the rental of that site.
Yes, you literally dig your money into another person's land and you then get to pay them monthly to use the infrastructure that you own. Those rentals aren't R500 a month. The days of saying; "I'll give you free internet if you let me build a tower here" are also long gone. It's not uncommon to pay R15K a month rental on a tower that cost you R150K to build. In other words, often you are paying the landlord the capital cost of the tower every 10 months.
So now the tower's standing and the land lease is secured.
You need to get internet to the tower. Realistically there is only one way, and that's fibre. It's all well and fine installing 1Gb, 5Gb or 10Gb wireless backhauls, but the rain fade means that is not always a good option - unless you're in the middle of the Kalahari. So you do what I've been doing since 2009 and you apply for wayleaves and you dig. Digging isn't cheap. Some councils want a R1M bond posted before you can put a pick in the ground. Others require more. Some don't want a bond. They want cold hard cash. Some councils now also want you to pay rent on your ducts. Yes.... You bought the pipes and manholes, dug them in, restored everything, got signoff from half a dozen different council agencies and then you still have to rent the infrastucture you built.
But, that tower can't just have one backhaul. You need at least two. Maybe three or four. Thus, apart from the cost to build fibre, or rent fibre to the site from DFA, Openserve, Liquid etc, you are still going to have to install either more fibre, or a wireless backhaul or two. Another couple of hundred thousand Rand gone.
Now you need to connect customers. One medium Mikrotik CCR will cost you about R20K. You probably need two. One for routing and one for customer authentication. Add to that a POE switch, an out of band management system, a secure network cabinet and an alarm system and another R100K gone.
These days WISPs use highly directional horn antennas to connect clients. Let's say you have 180' coverage, you are not going to cater for cambium or other brands and you are only going to provide service to Mikrotik or Ubiquiti clients. It works out about R8K per antenna. Cambium, Radwin and Tarana cost much more.
180' divided by 30' is 6 antennas. 6 for Mikrotik and 6 for Ubiquiti. There isn't much change for R100K.
But now we have to remember that we're financing tik koppe and people who want to start their own WISPs using their FTTH connection at home. So you need n+1, because customers become very grumpy if their internet's down for two days because some thief broke in and stole the antennas they connect to.
Take the router price, the backhaul radio price and the antenna price and multiply by two.
Where are we now? About half a million Rand up front and anything between R8K and R22K a month in fixed costs before the first client is connected.
Remember, I ran the first FTTH connection in South Africa in Somerset West in 2009. Back then people laughed at me.
Today, the clients on those couple of hundred kilometers of fibre that I own, subsidize the wireless clients.
Because wireless services are competing against cheap FTTH services, you need to price accordingly:
HEATZONE by Cape Connect provides high speed wireless internet connections in the Cape Town area.
heatzone.cc
50% Tower capacity will equate to 15 clients per horn x 12 horns. That's 180 clients (very wishful thinking - because, as DARoodt said "wisps rip people off" we are the service provider of last resort). Let's say the mythical 180 clients all take 20Mb. That's a gross income of R71,100 a month.
If you borrow R500K at 15% to repay over 10 years, you're looking around R9K a month.
Your fixed expenses on that tower will be in the region of R35K a month by the time site rental and backhauls are factored in.
They will steal your stuff. So budget 25% of the capital price for replenishing the backup kit. That's about R10,500 a month.
Now we're up to R45K a month. The remaining R38K has to cover, bad debts (major problem), pro rata for office rent or bond, staff salaries, vehicle payments, data centre space, IP transit, AFRINIC, IX membership fees, office expenses - anything from tea bags to computers, ongoing staff training, fuel for cars and bank charges for when the clients deposit cash into an ATM - to name a few.
If you look at this, you'll quickly realize the numbers don't work. You're better off investing the money in Tyme bank and not having 180 people screaming at you when the backhaul is stolen, the site batteries are stolen, or the landlord gets a bee in his bonnet, shuts power down and the batteries run out.
For us, wireless internet service provision is a labour of love, providing people who have no other options a decent connection at heavily subsidized prices. If I was selling a 20Mb wireless for R850, I'd be making enough to be able to replace a vehicle when it breaks.
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