Metricom's Ricochet Network Will Go Dark

cloudscout writes "According to this blurb at Go2Mac, the end is finally here for Metricom's Ricochet Network. Employees are being given one week severance. Now who is going to fill this vacuum? CDPD just doesn't cut it."

Comments

The Metrocom Model

[borcharc]

On the note of the value and profitability of the Ricochet network one can review the form 8-K filed July 20, 2001 (http://biz.yahoo.com/e/010720/mcomq.html).

Usually seven poletop radios are installed per square mile, one wired access point every ten square miles, and one network interface facility per 600 miles. They list a approximate cost of $2,000 per poletop radio. $180,000 per wired access point, and $550,000 per network interface facility. With a average cost per square mile of approximately $33,000.

The above facilities operating cost is approximately $10/mo per poletop radio, $2,000/mo per wired access point, and $10,000/mo per network interface facility. With wired communication costing approximately $900/mo per wired access point and $12,000/mo per network interface facility. Giving a approximate operating cost of $400/mo per square mile.

Metrocom receives approximately $25/mo in revenue per subscriber. They need 16 subscribers per square mile to cover the operating costs, and 44 subscribers per square mile to cover its operating and equipment costs.

The business model calls for a eight to one ratio of paying subscribers to active subscribers. This is based on ~12% of subscribers using the network at once, and each subscriber averaging 500 mb's a month of transfer.

I believe that the model is good but the main issue is with outsourceing the internet service. People I have talked to at WWC state that they are getting raises, and the outlook is good. If Metrocom had done its own internet service and received double the revenue I believe that would presently be on its way to profitability.