New Windsor, NY – February 22, 2021 – Wireless 20/20, LLC (www.wireless2020.com), a broadband wireless networks consulting group and developer of the industry-leading WiROI™ Wireless Networks Business Case Analysis Tools, today announced the introduction of a new portfolio of software tools to assist investors, considering funding winners of the RDOF auction, perform cost and ROI analyses.
The FCC concluded the Rural Digital Opportunity Fund (RDOF) Reverse Auction in December 2020, which assigned $9.2 Billion to 180 bid winners who plan to build broadband networks for 5.2 million rural households and businesses in America. These winners are now seeking funding, including letters of credit from banks and investors, to fund these network buildouts and qualify for the FCC subsidy.
On average, the RDOF subsidy amounted to $1,746 per location over ten years or $174 per year for ten years. Of the 5.2 million rural households and businesses, 4.5 million were bid at the Gigabit speed tier. In a 2019 study, the Fiber Broadband Association estimated the cost for deploying fiber, often measured by the "cost-per-household passed”, to be approximately $3,656 in rural areas, which typically has lower household densities per km of fiber.
"Averages could be deceiving," said Haig Sarkissian, Principal Consultant at Wireless 20/20. "On the surface, it may appear that receiving 50% subsidy should yield an attractive business case and ROI."
But a closer examination shows that $/Location subsidy distribution varied greatly between markets and bidders. The subsidy level was less than $1,000 for 56% of locations and less than $500 for 22% of the locations.
"Because the cost of building fiber varies significantly from one area to another, subsidy levels alone are not enough to estimate ROI. Investors need expertise in local buildout costs as well. To truly understand which locations and census blocks will yield an attractive or even an acceptable ROI, a business case needs to be developed for each census block, county, and state, to evaluate the cost of building the networks," added Haig Sarkissian.
Wireless 20/20's new suite of tools, designed to analyze the recent RDOF Reverse Auction results, include these three critical components:
- RDOF Results Analysis Dashboard - This tool allows a user to evaluate the results for all 180 bid winners, including the assigned funding, the number of locations, and the service levels they have committed to deploy. The results can be evaluated overall or by state. The interactive dashboard enables an investor to assess the critical award-dollars per location metrics for each winner and market, forming the starting point of a due diligence process.
- WiROI™ db RDOF Mapping Tool – This mapping tool consists of a custom Google Earth and QGIS mapping file for each winner. The tool shows the location of each of the CBGs where a bidder was awarded. By evaluating the topographies of the award areas and the number of locations per square kilometer, the user can further assess the award winners' prospects to deploying cost-effective networks.
- WiROI™ RDOF Business Case Analysis Tool – This is a comprehensive, custom-developed business case tool with an interactive GUI, which allows investors to easily evaluate the cost and revenue of fiber and broadband wireless networks. The tool considers the anticipated FCC RDOF funding over time and generates revenue, OpEx and CapEx. Key input assumptions can be modified in real-time to facilitate easy what-if scenario planning and ROI calculations.
By providing these comprehensive business case analysis and mapping tools, Wireless 20/20's goal is to encourage investors and winners to undertake thorough due diligence by evaluating their markets and prioritizing their network buildouts. At the same time, this will enable winners to identify markets with high costs and low subsidies, and therefore consider returning these winnings to the FCC so that additional funds can be allocated in subsequent phases of RDOF.
To learn more, visit: WiROI™ RDOF Lite Business Case Analysis Tool.
To schedule a private demonstration of the Wireless 20/20 WiROI™ Broadband Networks Business Case Analysis Tools, visit www.wireless2020.com.
WiROI™ is a trademark of Wireless 20/20, LLC.