Client Situation
A regional wireless business in the U.S. was looking for strategic advice on expanding into residential broadband via fixed wireless technology, identifying geographies with high potential, and developing a business case to support spectrum acquisition and bidding for funding from the industry’s regulator (FCC).
3HA Approach
Leveraging its prior experience and knowledgebase, 3HA was able to define the use cases and geographic applicability for these services. Alongside the client team, the specific product offering and roadmap were defined in the context of competitive offerings which enabled the team to dimension the required network. Subsequently, a detailed valuation approach was developed wherein unserved or under-served households were delineated by circumscribing urban and dense suburban areas. Finally, detailed assumptions for capex and opex costs, customer-level recurring revenue, and market penetration were used to compute the NPV at a granular county level. The team built two different scenarios to account for the potential of winning subsidies from the FCC to serve these under-served geographies.
Findings & Outcomes
Our analysis determined that a stand-alone fixed wireless business had a positive NPV only in 5 of 78 counties in question, without FCC subsidies. Including the subsidies improved the business case and 19 of 78 counties had a positive NPV. Potential synergies with existing businesses were subsequently incorporated. The project was completed on a quick turn and helped the client pinpoint valuation upside to spectrum from additional use cases. This in turn allowed them to update their bid strategy and bid limits in an ongoing auction to win spectrum in their priority markets.