Business Modeling
There are a variety of business models to consider when planning for a broadband network initiative, including open access, closed networks, municipally owned, and public/private partnerships (PPPs). The most appropriate approach will be reliant upon the core operating principles, organizational and governance strategies, budgetary considerations, and what the overall goals for the network are. We assist in navigating through the various options to derive the optimal ownership, organization, and operation model. If needed, we advise on creating the legal entity most appropriate for owning and governing the broadband network, including articles of incorporation, board structure, and by-laws. A complete set of commercial contracts are delivered for establishing partnerships with public and private sector bodies, and the terms of those relationships. These contracts include Use Agreements, SLAs, and In-kind Contributions.
To complete the business model, it is necessary to have a clear projection of the financial performance of the proposed broadband infrastructure, and further utilize to secure funding. We produce a comprehensive set of pro-forma financial models, of approximately 30 pages, projecting at least five years of the:
- Income Statement
- Balance Sheet
- Cash Flow Analysis
- Internal Rate of Return (IRR)
- Financial Charts and Graphs
- Market Assumptions
- Infrastructure Build Out Phases
- Project Implementation Budget
- Capital Expenditures
- Operating Expenditures
- Consumer Service Descriptions and Pricing Models
- Service Take Rates and Revenue Projections
- Average Revenue Per Customer
- Potential Funding Model and Cost of Capital
- Depreciation Schedule
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