At 12:45 AM 6/21/03 -0700, you wrote:
>p.s., (question of public Wi-Fi profitability)
>
>Yahoo Japan, an aggressive ADSL access provider that you can see their
>sales staffs at every street corners, says its break-even point is
>2 mln subscribers. they now have 2.7 mln customers at the monthly
>fee of USD 20.
>
>I know there are a lot of ways one can operate a hot-spot network, but
>does anyone know any break-even point calculations?
If it's just the standard break-even calculation you are after it's:
Break-even = (All Fixed Costs / (Unit Price - Variable Unit Cost))
A break-even analysis simply looks at the relationship between fixed and
variable costs in the context of sales volume. It is used to determine
what sales volume is required for a firm to generate a profit of zero
(i.e, break-even) thus recovering both the variable
_and_ the fixed costs of producing the product or service.
So to apply this to b-e analysis for a hot spot network you have to
determine the fixed costs (numerous ways to calculate and determine
these) as well as the variable costs (again, numerous ways to calculate
and determine these). Gets more complicated if you have multiple
products/services,
etc. so you would use, for example, a weighted break-even analysis.
-- James
Received on Sun Jun 22 08:17:43 2003