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market share. With Sky Pilot cost estimate, we project that a 47% market share <br />(reduced from 52%) is required for break even. cash flow. Given the lower cost <br />of Sky -Pilot it may be an attractive alternative. Please note that we are not <br />recommending. any particular radio vendor, Tropos and Sky Pilot are just <br />examples. We recommend that a Request for Bid process be used for vendor <br />selection. <br />Section 6 provides additional detail on the key assumptions and their sensitivity to <br />the financial projections. Exhibit I provides detailed schedules of cash flows, <br />income statements, and all assumptions. <br />Service pricing key assumptions include: <br />• Customers have the option of either buying customer premises equipment <br />for $165 or leasing it for $5.00 per month. We assume that half of <br />customers will buy CPE and half will lease. Encouraging customers to buy <br />CPE rather than lease it will help to shift cash flow to the beginning of the <br />forecast period, when cash flow is likely to be lower. <br />• Standard 4 Internet is offered at $24.95 per month, plus wireless bridge <br />(lease or purchase). <br />• Deluxe 3 Internet is offered at $29.95 per month, plus wireless bridge <br />(lease or purchase). <br />• 70% of residences and 30% of businesses will subscribe to the Standard <br />Internet package, while 30% of residences and 70% of businesses will <br />subscribe to the Deluxe Internet package. <br />Funding <br />We estimate that a 5 -year bond of $525,000 and a 20 -year bond of $50,000 are <br />required to fund implementation costs. An additional $200,000 internal loan is <br />required to fund initial operation costs. <br />Given that the Customer Premises Equipment (CPE) accounts for over 30% of the <br />wireless implementation costs, the actual subscription rates will impact the <br />financing requirements. <br />Other financing such as leasing and vendor underwriting was considered. <br />However, given the status of the product development and market conditions, we <br />feel these options will have. few if any takers or require much higher rates than a <br />General Obligation .(GO) bond. <br />3 1 Mbps (up and down), 5 email accounts, dynamic IP address, and allows for 2 active devices. <br />4 The initial service offering is at 1 Mbps (up and down). This is expandable to 3 to 4 Mbps without <br />hardware changes. <br />5 2 Mbps (up and down), 10 email accounts, dynamic IP address, .and allows for 3 active devices. <br />1-4 Colwnbla <br />6.0 t ...i <br />