Based on information that I have been gathering, I think that this week will be dedicated to calculating the Return on Investment for building a WiMAX network in LATM.
The key here will be to identify revenue that would not have been earned with existing infrastructure. In other words, I will need to look at 1) the increase in ARPU from the WiMAX network and 2) all the revenue from new customers (these will likely be the fixed users.) Lastly, I will need to subtract any revenue lost to cannibalization. That is, I'll need to make some assumptions about how much less users will be talking if they are sending IMs.
I have a lot of data that will help me estimate these numbers - Laptop penetration, smartphone penetration, total population, diffusion patterns - but I will also need to make some assumptions. How much will these new markets increase spending on service if given access to broadband data services? How will they react as prices come down? How will competitors behave? How long until these networks become obsolete? And many more assumptions.
Because of the assumptions I need to make, I do not anticipate my forecasts to be the be-all-end-all to the financial calculations on this business model. Instead, my hope is that I will provide a suitible methodology so that others can refine my assumptions and form a more accurate financial picture of this business.
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