While the overwhelming majority of today’s discussion about municipal wireless networks focuses on the technical aspects, also critical is working out the business models that detail how these networks will financially justify their existence. Whether we continually support these networks using public funds – thereby making them susceptible to political whims – or we turn over network operations to an outside entity, planners must invest a serious amount of thought into the financial aspects of these projects.
One relatively short article cannot address every aspect of these issues, but it can at least highlight the crucial fundamentals.
One point that must be stressed is that your network’s hard design specifications will dictate the revenue streams and services your network will achieve. If you build a network that has relatively low throughput and isn’t 100 percent reliable, you’ll see a direct correlation in the adoption rate, usefulness and return on investment.
Regardless of legal structure – public ownership, public-private partnership, private ownership, nonprofit or any other variations – there are two major financial categories that must be scrutinized. For the purposes of this discussion, I’ll define these categories as Government Cost Redirection and Revenue-Generating Services/Applications.
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(Lead for this story from Dewayne Hendricks posting to the Dewayne-net mailing list.)