Will Woosh Survive?

Forums › New Zealand Broadband › Will Woosh Survive?

1 | 2 | 3

224 posts

Master Geek
Inactive user

#204540 31-Mar-2009 21:22

i used to have woosh and connected at about 500kbps. sure the speeds are slow compared to 3g but vodafone only give you a 3GB cap and woosh have a 20GB cap which is way bigger than vodafone.
i heard vodafone don't offer a 20GB cap for 3g usb modems because their network can't handle it, yet as you say, woosh is using a dud technology yet they can offer 20GB caps and vodafone can't.

sbiddle:
richgamer: if they can develop a usb modem that doesn't require a big antenna on the window and gets at least 80% reception then they could survive.

How? A USB modem doesn't make up for a network that reastically can't even deliver dialup speeds to most users. TDD-CDMA was just a dud technology.

scottjpalmer

6035 posts

Uber Geek
+1 received by user: 792

Moderator

ID Verified

Trusted

Lifetime subscriber

#204547 31-Mar-2009 21:54

richgamer: . . . i heard vodafone don't offer a 20GB cap for 3g usb modems because their network can't handle it . . .

What a load of cr@p. While a huge number of users pulling a lot of data through the network will obviously slow it down for each user, that is not the "network not handling it". I personally prefer it this way, rather than the opposite end of the scale with ADSL plans where too many users clog up not enough bandwidth.

Look at the price of 1GB and 3GB plans then do some simple maths and work out what a 20GB plan would cost. Do you think there would be any demand? No. That is why there isn't one. DO NOT take this OT by turning it into a Vodafone data price discussion.

ajobbins

5053 posts

Uber Geek
+1 received by user: 1279

Trusted

#204549 31-Mar-2009 22:07

alig:
adamj:
Would you? Vodafone are in the process of rolling out 3G coverage to 97% of the population (With the right device). Woosh coverage is extremely limited in comparison.
How are they supposed to make money by spending millions on infrastruction and then charging less than competitors? Not gonna happen

Wimax should be faster Voodafone's 3G (5 times?). Vast majority of broadband users already lives and works in the Woosh's coverage area, which will be expanded by Wimax installations. Charging less means more people, more people eventually means more money. Voodafone 3G is very expensive (Broadband Pro 3GB* 24 month term $69.95). Make it $20 for 15Gb Wimax plan and you double your client base in a couples of weeks.. and so on. (and costs of Voip calls are just a fraction of those additional Vodafone/Telecomm voice plans or even free in case of woosh to woosh or even sip to sip)

$20 for 15GB Hahahaha you have to be joking. Wimax would be more expensive to provide than fixed line DSL, and you pay double that for ADSL. Woosh would be making even more of a loss giving away 15GB of Wimax data for $20. Double your client base sure, and quadruple your losses.

johnr

19282 posts

Uber Geek
+1 received by user: 2526
Inactive user

#204551 31-Mar-2009 22:13

Clearly the above posters know the cost of deploying and keeping a network going fixed or mobile

Now where is the local pub I feel like a nice cold Tui

John

alig

56 posts

Master Geek

#204557 31-Mar-2009 22:44

adamj:
$20 for 15GB Hahahaha you have to be joking. Wimax would be more expensive to provide than fixed line DSL, and you pay double that for ADSL. Woosh would be making even more of a loss giving away 15GB of Wimax data for $20. Double your client base sure, and quadruple your losses.

Quadruple sounds too pessimistic. Simple math: $40 X 10 clients = $20 X 20 clients (and it would be only the beginning of the Great Migration). After that it should be like $40 X 1 client vs $20 X 29 clients.
Your view reminds me most of the Trademe's auctions, where a lot of people think they might loose putting $1 reserve on a thing everybody needs...Although it helps $1 reserve traders a lot. ;-)
Wimax future even in the standard, like yours, market analysis just a little bit gloomier than wired ADSL:
http://www.strategies.nzl.com/wpapers/2007011.htm

ajobbins

5053 posts

Uber Geek
+1 received by user: 1279

Trusted

#204559 31-Mar-2009 22:49

alig:
Quadruple sounds too pessimistic. Simple math: $40 X 10 clients = $20 X 20 clients (and it would be only the beginning of the Great Migration). After that it should be like $40 X 1 client vs $20 X 29 clients.
Your view reminds me most of the Trademe's auctions, where a lot of people think they might loose putting $1 reserve on a thing everybody needs...Although it helps $1 reserve traders a lot. ;-)
Wimax future even in the standard, like yours, market analysis just a little bit gloomier than wired ADSL:
http://www.strategies.nzl.com/wpapers/2007011.htm

Your calculations only apply to revenue. Do you think providing a network and data is free?

If you are giving away 15GB of data for $20, you are making a loss, especially if you are talking mobile data (It's not an accident mobile data costs more than fixed line data you know). Cost > Revenue. Understand?

When costs exceed revenue, the more users you have the more money you loose not make!!!!

Seriously!

New World

Shop on-line at New World now for your groceries (affiliate link).

nate

6473 posts

Uber Geek
+1 received by user: 458

Retired Mod

Trusted

Lifetime subscriber

#204564 31-Mar-2009 23:04

alig: If Woosh could now implement WiMAX, it could not only survive but beat its competitors. With one condition - the access should be universal for one account and include both mobile and fixed Internet connectivity for one reasonable and comparable to other ISPs monthly price. It might bite off a chunk of the cellular market, as well.

From what I've been reading (example), it seems that WiMAX isn't as amazing as has been portrayed. Wasn't Callplus rolling out a WiMAX network??

Is there any wireless service that trumps wired (especially with latency)?

alig

56 posts

Master Geek

#204574 31-Mar-2009 23:17

Your calculations only apply to revenue. Do you think providing a network and data is free?
If you are giving away 15GB of data for $20, you are making a loss, especially if you are talking mobile data (It's not an accident mobile data costs more than fixed line data you know). Cost > Revenue. Understand?
When costs exceed revenue, the more users you have the more money you loose not make!!!!
Seriously!

Ok lets make it $29. $20 to the revenue and $9 for the mobile data. Revenue > Costs. Or you've got different classified numbers. Would be interesting to hear. Seriously!

alig

56 posts

Master Geek

#204579 31-Mar-2009 23:32

From what I've been reading (example), it seems that WiMAX isn't as amazing as has been portrayed. Wasn't Callplus rolling out a WiMAX network??
Is there any wireless service that trumps wired (especially with latency)?

Could be. But could be just a victim/traitor of the market war. Big money involved. Who Killed the Electric Car?

ajobbins

5053 posts

Uber Geek
+1 received by user: 1279

Trusted

#204610 1-Apr-2009 08:48

According to this article, Woosh has around 26,000 subscribers. To date they have acculated losses of $142.2 million.

Lets do some overly simlified maths:

142,200,000 / 26,000 = 5469. That means the average loss per customer of Woosh to date is $5,469.

Add to that the cost of deploying a WiMax network, now I have no idea about this but I am going to hazard a guess of $50 million.

We can add this 50mil onto the loss so far and call it 'costs not yet recovered'. Total is now $192.2 million, or $7392 per customer.

The current network makes a huge loss, so Woosh are going to want to decommission it once the new network is up and running. Now we need to move all of those 26,000 customers off our old network, which means new CPE for them (And why should the customer pay for these?).

So say Woosh get a super good deal and can source CPE at $100 a piece. Thats another 2.6 million on to our total (Now $7492 each).

Lets also be really really generous, and assume that the new network is so super awesome that 20 times more people want on the network, thats around another 500,000 new customers.

Lets assume that the cost of signing up these new customers is also $100 a piece (In reality its probably more). Thats for admin costs and subsidising a CPE. That's another $50,000,000 onto the bill (Total now $244,800,000) but we can now divide that by 526,000 customers which puts our 'costs not yet recovered' at $465 a head! Cool.

Now being an ISP isn't a hugely lucrative business. Lets assume that Woosh can, on average, exceed costs with revenue by $10 per customer per month (Again, probably pretty generous). This means that each year, $63,120,000 profit would be made which can be added to 'costs not yet recovered'.

All of the above would mean that Woosh started provided a return to investors after 4 years. I'm guessing this is about the longest they will be willing to wait.

The above is a drastic over-simplisation (And assumes all remains equal), and is heavily weighted in Wooshes favour. In reality, customer numbers would never reach these levels, and costs would likely far exceed what I have suggested above.

Also note that OPEX for a WiMax network are going to be higher than a fixed line network, so you can't charge less than fixed line providers, or even the same, and still make $10 a month out of your customers. Higher prices than fixed line also mean less demand. If Woosh did go down this road I would be surprised if they made 100,000 customers. Guess how long it would take them to recover those costs then? (Try 17 years)

sbiddle

30853 posts

Uber Geek
+1 received by user: 9996

Retired Mod

Trusted

Biddle Corp

Lifetime subscriber

#204623 1-Apr-2009 10:07

Woosh's only asset so far has been it's losses which would have potentially suited it's owners over the years.

The problem these days is that they need significant capital for future investment and simply aren't going to get that - people suddenly now realise pumping money into debt ridden companies or companies with unsustainable losses and poor business models simply doesn't work.

Quic Broadband

Move to New Zealand's best fibre broadband service (affiliate link). Free setup code: R587125ERQ6VE. Note that to use Quic Broadband you must be comfortable with configuring your own router.

alig

56 posts

Master Geek

#204664 1-Apr-2009 13:19

So I guess, Woosh has no choice but to die or try to compete with Vodafone and Telecom for at least 500 000 customers... deploying mobile WiMAX

richgamer

224 posts

Master Geek
Inactive user

#204666 1-Apr-2009 13:25

scottjpalmer, why did you ask me a question (Do you think there would be any demand? No.) and answer it for me? lol. My answer would be yes i do think there will be demand. woosh is wireless and has thousands of subscribers so if vodafone offer 20GB i think people would go to vodafone for the better country wide coverage and portability of the usb modem.
and so what if there is no demand? it doesn't cost anything to have a 20GB plan does it? all vodafone have to do is make a new 20GB plan price and put the info on their website and let people signup and i'm sure that's what they pay their website admin for.

scottjpalmer:
richgamer: . . . i heard vodafone don't offer a 20GB cap for 3g usb modems because their network can't handle it . . .

What a load of cr@p. While a huge number of users pulling a lot of data through the network will obviously slow it down for each user, that is not the "network not handling it". I personally prefer it this way, rather than the opposite end of the scale with ADSL plans where too many users clog up not enough bandwidth.

Look at the price of 1GB and 3GB plans then do some simple maths and work out what a 20GB plan would cost. Do you think there would be any demand? No. That is why there isn't one. DO NOT take this OT by turning it into a Vodafone data price discussion.

gomez

84 posts

Master Geek

#204691 1-Apr-2009 14:29

Sadly, I doubt Woosh will survive this year due to the hefty loss they're at. Their investors won't want to keep injecting money only to get nothing back in this current economic turmoil.

Which would be rather sad because the people I used to work with there who are still with them will be hit the hardest, including their families.

The remainder of the damage will be those out in remote, rural locations that use their service (especially the Trango users down here in Southland).

"Of everything I've lost, I miss my mind the most"

nate

6473 posts

Uber Geek
+1 received by user: 458

Retired Mod

Trusted

Lifetime subscriber

#204695 1-Apr-2009 14:40

adamj: According to this article, Woosh has around 26,000 subscribers. To date they have acculated losses of $142.2 million...

Great post!

1 | 2 | 3